Buying A Home? 3 Things To Know About Getting Insurance Coverage
When you purchase a new home, you are going to need to purchase an insurance policy to go with it. Not only is purchasing insurance a smart move, it is going to be required by your mortgage lender.
#1 Always Compare Coverage Between Companies
When you are shopping for home owner's insurance, never go with the first offer that you get. Always take the time to get quotes from at least three different insurance companies. You may be surprised at how much your premium can vary from one company to the next. Although there are general factors that most insurance companies use to come up with their premium prices, each insurance company has slightly different factors that they use to calculate premiums, and sometime those factors can make a big difference.
Different insurance companies may offer different benefits as well. It is worth it to compare prices and coverage between a few different companies to make sure that you get the best value for your money.
#2 Wrap Your Insurance Payments Up with Your Mortgage
Most mortgage companies will allow you to wrap your home insurance premium payments into your mortgage payment. Your lender will pay your insurance premium for you as well as your property taxes from your escrow account. You will have to put down the money for the first year's premium into the escrow account.
Many lenders prefer this set-up so that they can ensure that your insurance premium is paid. This also takes the stress off of you concerning paying your insurance premium every month.
#3 Make Sure You Get Enough Coverage
Make sure that you are getting enough coverage. You want to make sure that your insurance premium covers a wide list of named perils. Make sure that your deductible is at a rate that you can afford. If you live in a flood zone, make sure that your insurance covers floods. Flood coverage is often an extra rider on your insurance policy.
Make sure that your insurance policy offers personal property protection, liability coverage, paying for alternative housing if your home is damaged. Make sure that the insurance coverage is high enough to cover the replacement cost of your home as well as the value of all your personal belongings.
If you have any extra special personal belongings, such as expensive artwork or jewelry, you may need to get extra coverage for those items.
When purchasing insurance for your new home, see if you can get your lender to wrap paying your insurance into your mortgage payments. Be sure to compare coverage between multiple lenders. Make sure that you get enough coverage to cover all the necessary types of perils for your area and covers the value of all of your personal belongings.