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How To Select The Best Homeowners Insurance

Tuesday, June 28, 2022   /   by Kathryn Jones

How To Select The Best Homeowners Insurance

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As many of you know, there is so much research, time, and energy that is put into purchasing a home, from both you and your realtor. Because of the list of to do's surrounding your closing, buying a homeowners insurance policy is too often almost an afterthought - although required by all lenders. Selecting the ideal homeowner's insurance plan can be challenging. Homeowners must evaluate their risks and living conditions while also comparing insurance companies' pricing, customer support, and claim reimbursement effectiveness objectively. In honor of National Insurance Awareness Day, we pulled our top industry tips for selecting the best homeowners insurance policy for your family. Keep reading to get our tips...

1. Understand What Homeowner Insurance Is & What It Covers

In the event that your home or its contents are damaged by a fire, smoke, water, theft, vandalism, storm, or any occurrence specified in the policy, your home insurance policy will pay to restore or replace your home and its contents. "Perils" is what these are often referred to as. These common risks are covered by the policy's standard deductible, which is the annual sum (typically around $1,000) that the homeowner is responsible for paying out of pocket before insurance reimbursement covers the remaining costs.

In-house personal property that is damaged, stolen, or lost is also covered by homeowners insurance. Additionally, in the event that someone other than you or your family is hurt on your property, homeowners insurance will cover the medical and legal costs.

2. Select Your Coverage & Reimbursement Type 

The critical next step is deciding how, in the event that something were to happen to your home and possessions, you would like to be reimbursed. The insurance provider may compensate you for anything from the full cost of a like-new replacement to the depreciated value of the damaged portions of your home, depending on the type of reimbursement plan you select. If you have a cash value policy, your reimbursement will be based on the items' actual cash value after depreciation. For example, you will receive the cash value of a 5-year-old TV, not a new TV, if your 5-year-old TV is destroyed.

In contrast, a replacement cost coverage would pay you back at a rate depending on how much it would cost you to fix or replace the damaged property. The 5-year-old TV in the previous example might actually be replaced with a new TV because this rate is higher than the cash value rate. Be aware that some assets, including roofs and fences, are often only covered at a cash value rate when they need to be repaired or replaced.

It may be necessary to supplement your basic home insurance through additional, fee-based additions to the policy, sometimes known as endorsements or riders, depending on your circumstances, including the location of your home, the goods inside, and whether it's an older property. These differ by insurance company and coverage, but may need to be looked into based on your situation.

3. Compare More Than One Quote

We advise receiving insurance quotes from at least three firms, making sure that each one contains all the coverage options you require, whether they are included as basic coverage or as add-on options, because insurance costs can vary greatly depending on the specifics of your situation. It's also important to examine insurance providers' discounts in addition to their rates. The following discounts are offered by numerous insurance companies:

  • Multipolicy Discount: This is offered when you combine your homeowners insurance with another policy, such as your auto insurance.
  • New Customer Discount
  • First Time Home Buyer Discount

Additionally, you might receive a discount if your house has hurricane shutters, a sprinkler system, a security system, or any of these. You can frequently find quote tools on the websites of insurance companies. You only need to enter a few pieces of basic information about your house and its contents.

4. Understand Payment Options

Although, technically seperate items, Homeowners insurance, property taxes, and private mortgage insurance (PMI) are frequently paid through an escrow account set up by your lender. Your policy premium is virtually folded into your monthly mortgage payment when you choose to pay for your homeowner's insurance through an escrow account. The insurance company is subsequently paid by the escrow business on your behalf. It's important to note that the insurance provider must be paid directly if you don't have an escrow account.

We hope you took value from these homeowners insurance tips and that they make the home buying process that much easier for you. Whether you're a first time homebuyer or a home buying expert, let our team of realty experts take care of you! From getting you the best deal possible to ensuring the process is smooth and the smallest of details are met, like purchasing the right homeowners insurance, we will be there every step of the way. Contact us today at (512) - 888 - 9205 or by email at Russ@Russ-Phillips.com. 

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