Have you decided to buy homeowners insurance but wondering what things you must consider when buying one? Well, you are in the right place, as this post will give you valuable insight into what aspects you must look at when shopping for an insurance policy.
Homeowners insurance is not compulsory, but lenders tend to make it a prerequisite for you to get a mortgage. That said, you do not have to get something very expensive to increase your chances of securing a home loan.
However, you must consider a couple of things no matter what type of homeowners insurance you go for.
5 Things to Consider When Buying Homeowners Insurance
Here are five main areas that you must look into when buying homeowners insurance.
1. Running a Comparison
Do not rush into buying the first quote presented to you. Even when a quote is within your budget, there are several components you must look into before signing the dotted line. The best thing you can do is to gather as many quotes as you can.
The next step for you would be to sit down and run a side-by-side comparison between all of the coverages. Always look at what some of the protection is each homeowners insurance costing you. You may be able to find an insurance policy that may cost you a little more and offer comprehensive coverage.
Do not think about them now; paying a couple of extra dollars per month in the present can help you save thousands, if not millions in the future.
2. Basic Coverage Must Have
The basic homeowners insurance must cover the cost of replacing your personal assets within the house. Plus, it should also be able to cover the replacement cost of your home in case it is partially or fully destroyed or damaged.
This becomes even more critical if you live in a high-risk area with frequent flooding, earthquake, and hurricane warnings.
3. Pick a Deductible You Can Afford
A deductible is an initial amount you have to pay every time you want to make a claim against your homeowners insurance policy. The policy’s benefits will only kick in once you have paid this amount. Therefore, always make sure that you only agree to a deductible that you can afford.
In case you are financially secure and would not mind paying high deductibles, you can opt for that. At times paying a higher deductible can help lower your monthly premiums. These deductibles can range from a thousand to several thousand dollars.
4. Beware of the Loopholes in the Coverage
Make sure that you only get the coverages you really need and do not take the insurance company’s word for it. If the peril is not on the list, it most likely is not a part of your coverage. Remember that all homeowners insurance coverages exclude damages due to floods and earthquakes. Most perils on the list will be smoke, fire, theft, and lightning.
In case you live in an area with a high-risk for flooding, hurricanes, or earthquakes, you may need to get additional coverages.
5. Check the Limits for Coverages
Each policy will have a limit to the cost of items they will cover. These include guns, jewelry, furniture, and other equipment. Therefore, always check these limits as they must cover the cost of the items you are securing.
For example, there is no point getting homeowners insurance covering a gold ring up to $1000 when your ring is worth more than that. Therefore, find the insurance policy offering the maximum cost coverage for all your possessions.
Tips for Buying Homeowners Insurance
Shopping for your new homeowners insurance on a yearly basis is a good strategy. However, you must only practice this if you are sure to get a lower premium with the same coverage from a new insurance provider.
Moreover, only switch the insurance company if you can get a substantial discount. There is no point going through the hassle of switch over for a $100 saving.
That said, you must straight away move to switch or upgrade your homeowners in case your circumstances change. For example, if you buy new jewelry, expensive appliances, or add a family member to the homeowners insurance policy.
While moving to a new policy every year may sound like a good idea, but you are less likely to qualify for better offers. The insurance company you stay with for years is more likely to offer you better rates over the years when you renew rather than buy new insurance from a different provider each year.
Buy With Velox Insurance
Whether you are a first-time homebuyer or an existing homeowner, you can get the best and economical homeowners insurance with Velox Insurance. Not only will they listen to your needs and individual circumstance, but also give you unbiased advice on the type of coverage you must go for.
With Velox Insurance, you can now get a quote within 60 seconds. Moreover, you can purchase homeowners insurance online or via phone with an agent.