Home Insurance Tips
Here Exclusive Buyer Realty, Inc. gives you a valuable Homeowners Insurance Tips to help you navigate the home buying arena.
“Concerned about Homeowners Insurance?”
Your new home may be one the biggest investments you’ll ever make. If you’re serious about protecting that investment, your choice of insurance company is a very important decision. Many times in the rush to complete all of the requirements for the real estate closing, many homeowners simply choose the insurance company that quotes the cheapest price. In the long run, however, this can be a very costly mistake.
Make sure that your home is insured for at least 100% of its estimated replacement cost.
To determine your amount of homeowners coverage:
- Get an estimate of the replacement cost of your home, and
- Select the coverage amount that best fits your needs.
Understand the difference between market value and replacement cost for insurance purposes.
Market value is the amount you would pay to buy the home, including the land, regardless of how much it would cost to rebuild the home.
Replacement cost is NOT:
- The market value of the home.
- The home’s purchase price or the cost of the land.
- The outstanding amount of any mortgage loan.
When buying a new home, be sure to obtain a replacement cost estimate.
Before you purchase a new home, make sure that you determine the appropriate amount of coverage needed by:
- Asking if a replacement cost estimate is available when the home is appraised.
- Consulting with your local builder association or a reputable builder for an estimate.
- Checking with your Insurance Agent to help you with the process.
Determine Policy Coverages and Options
Insurance policies differ in the coverages and options provided. It’s important to discuss with your insurance agent ALL of your needs for coverage prior to purchase. Is Flood Insurance required or just a good idea? Earthquake? Personal Property Limits & Extensions? Supplemental Liability? All of these considerations, and more, should be taken into account in order to design the home insurance policy that is best for you.
Insurance Deductible
Since all home insurance policies have property deductibles, the amount of property loss you will assume yourself before the insurance company pays your claim, it is extremely important to choose that deductible based on your economic circumstances at this time. If finances are tight, in the event of a loss, a lower deductible may be necessary now. When cash flow and savings are better, however, a higher deductible will save you a considerable amount in the cost of insurance in the long run.
Long-Term View
You’ve done your homework, taken all the advice noted above, and you have a well-designed home insurance policy that meets your needs right now. That’s GREAT! However, don’t just put the papers in a drawer, never to be seen again. Be sure you annually review your situation. Just a few of the considerations may be:
- Have you remodeled or improved your home?
- Has the rate of inflation risen since your last appraisal?
- Have market conditions in your area impacted the amount it will cost to rebuild your home?
It’s important to revisit the coverage amounts, coverage changes, purchases you have made thru-out the year, etc. In this way you can truly have piece of mind that, in the event of a catastrophe, you’re financially prepared.
I would be happy to discuss your personal situation with you at any time. If any of the items noted above are of concern to you in the purchase of your new home, please contact my office as noted below.
Thomas R Gervais, CLU
State Farm Insurance & Financial Services
4124 West Henrietta Road
Rochester, NY 14623
(585) 359-4280
(585) 359-4891 fax