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Protecting your home with proper insurance

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homeowners-insurance1Once you find the home you want to purchase and have a purchase agreement in place you will want to begin researching your home insurance options.

One way to start this process by getting a price quote from the company that handles your auto insurance — you generally get a discount on your auto and home insurance if you have both policies with the same company. If you have an auto insurance agent, find out whether he or she works for one company or is an independent agent who works with several companies. An independent agent can give you price quotes from several insurers. You may also want to contact a few big insurers separately, such as State Farm, which doesn’t sell through independent agents.  Each of these companies will offer you a discount if you will switch your auto insurance over to them as well.

But before you start comparing quotes, you’ll need to decide how much coverage to get.  A home’s insurance coverage is based on the cost to rebuild the house, not the market value.  Homeowner’s insurance normally automatically provides coverage for your possessions based on a certain percentage of your home’s insurance value — 75% is typical. So if your home is insured for $200,000, you’ll also have up to $150,000 of coverage for your possessions. But homeowners insurance policies usually have lower limits for certain kinds of items — such as $2,000 or $3,000 for all of your jewelry, for example. If you have any particularly valuable possessions — such as jewelry, artwork or special collections — you may want to get extra coverage for those items.

One good way to lower premium costs is to choose a higher deductible.  A higher deductible will reduce your premium and discourage you from filing small claims that would change your insurance risk factor and cause your insurance costs to increase.

Before you settle on an insurance company, check out the insurer’s complaint record through the National Association of Insurance Commissioners Consumer Information Source. Saving a few dollars in premiums can backfire if your insurer ends up hassling you about claims.

If you’re concerned about flooding, which is not covered by homeowners insurance, go to www.floodsmart.gov to see the home’s risk of flooding and get prices for flood coverage through the National Flood Insurance Program. You can buy flood insurance through most homeowners insurance agents. Although you will be required to obtain flood insurance for your home loan if you live in a high-risk area, but it may be worth considering flood coverage even if it’s not required.

When you move into your new home, it’s the perfect time to conduct an inventory, which will streamline the claims process if you have to file a claim in the future. Take photos or a video of every room, keep receipts for valuable items, and keep a copy of the file somewhere away from home so it’s easy to access if needed.

Call me today at 866.435.6553 and I will be happy to answer your home buying questions and help you get approved for the purchase of your new home.

 

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