Buying Home Insurance? Don’t Proceed Until You Read These Tips
Buying a home – and the insurance that comes with it – is one of the most exciting yet daunting chapters of someone’s life. There’s a lot to learn, and a lot of potential mistakes that might creep up.
Nervous about buying home insurance? We’ve got your back. Below are the best tips when buying home insurance.
Don’t Assume You’re Covered For Natural Disaster
Did you know floods are excluded from a standard homeowners policy? The same applies to earthquakes. Homeowner policies will differ from one company to the next, and it’s important to understand what is and isn’t covered. Most of the time, the company website will clearly list what the standard insurance covers. It’s important to read this and then decide if you need to purchase additional policies.
Check an Insurance Company’s Ratings
A company’s website might claim to offer certain guarantees and coverages, but how easy is it to get your claims approved and processed? You want to find a company that’s easy to work with and has solid customer support available. Consider reviewing both formal independent assessments (e.g. those conducted by AM Best or Demotech), and reviews generated from consumers like yourself. The ratings and comments will offer a more realistic insight into the day-to-day of the insurance company.
Take an Initial Home Inventory
Personal property coverage in a home insurance policy pays for the repair or replacement of personal goods — think furniture, clothing, jewelry, electronics, and so forth. But, here’s the thing. You might end up paying too little or too much for the amount of personal property coverage you need.
It’s always a good idea to take an initial home inventory to approximate how much your personal items cost. Plus, this home inventory list will come in handy in the future for speeding up and maximizing claims.
Buy Coverage that Absorbs a Spike in Repair Cost
The dwelling coverage in a homeowner’s insurance will pay for the repairs of a home if the cause of damage was covered in the policy. But, the cost of repairs is influenced by local rates for construction and labor costs. That’s the problem.
Natural disasters can be unpredictable. If a tornado storms your neighborhood and many houses are damaged, the construction and labor costs will spike up. This means the initial coverage suddenly becomes insufficient, and you’ll have to pay out of pocket. Avoid this scenario by choosing home insurance with extended or guaranteed replacement costs. These optional policies will absorb a spike in costs when necessary.