Top Home Insurance Buying Tips for Summer

Shopping for home insurance is one of those big home-buying details that can easily slip right through the cracks. It’s not unusual for insurance companies to get panicked phone calls at the last minute from escrow and title companies requesting a home insurance binder so they can complete the sale and close the deal. To avoid this, you want to start shopping for home insurance as soon as the other party accepts your purchase offer. The following tips will help save you money and time when you start shopping.

1. Determine Your Home’s Insurability

Any agent you contact will need a lot of information to give you a quote for the best policy rate. To determine how insurable your new home is, the insurance agent will usually ask:

• What is the location of the home?
• What year was the home built?
• How many claims have been filed on the home in the past five years?
• How old are the electrical and plumbing systems?
• What is the home’s square footage?
• What type of roof does the home have?

It’s important to note that if your home is in a rural area that isn’t close to a local fire department or there isn’t a fire hydrant on the street, some insurance entities won’t give you coverage. In this case, you might have to go to a surplus-line or specialty company, and your quote can take longer to get.

2. Increase Your Deductible to Save Money

Having a higher deductible on your home insurance policy is a quick way to save money upfront. Many insurance companies start handing out discounts at a $500 deductible, and they’ll increase the discount as the deductible goes up. You could get a deductible of up to $10,000 with some companies. However, you should be careful because a lot of mortgage companies cap their deductibles at $1,000. Check with your lender and see what your deductible options are.

3. Figure Out How Much Insurance You Need

Most insurance company agents utilize a cost estimator to figure out your replacement cost estimates. This can help ensure that your home gets insured for the correct amount. If you purchase a home on a large lot, don’t be surprised if you get a policy that is much lower than what you paid out for your home. Remember, you’re going to buy coverage for the home and not the land, and this can save you money.

Previously, there was replacement coverage called Guaranteed Replacement Cost. However, this doesn’t exist anymore. Today, you can get Replacement Cost Coverage. This means that your particular home insurance company sets aside a total percentage of additional coverage that exceeds your insured amount.

This coverage can help protect you as a homeowner if you suffer a loss from having to pay more construction costs out of your own pocket. It can cost more to rebuild your home to replace it because material prices went up or due to inflation. For example, say you have a $300,000 coverage policy. The company has a 125% replacement cost. You could get another $75,000. Most agents will usually recommend a 20% replacement cost coverage.

4. Customize Your Policy

Did you know that it’s possible to tailor aspects of your insurance policy? One large area that many people tend to overlook is liability insurance. This insurance will protect you against claims that come from property damage to others or bodily injury. Say your child had a friend over, and they went to play in the house. The child tripped, fell down the stairs, and broke their leg. Liability insurance can cover their medical bills since it happened on your property, even if it was purely an accident.

Each policy will differ from the maximum cap you have for your liability coverage. However, the more you go up, the more it can add to your premium price. If you exceed the cap, you might need to consider an umbrellas policy. This policy can give you additional liability coverage if you want it. However, it can add hundreds to your premium.

5. Check for Discounts

You want to make sure you’re getting all of the discounts you’re entitled to on your home insurance policy. If you have a home alarm system that reports to a central station, this can earn you a nice discount. If you are over the age of 50, this could be another discount. Companies have different discount opportunities with age preference policies, and they could be listed under mature policyholder discounts or senior discounts.

One of the most common is a multi-policy discount. This type of discount can save you money on your home and auto insurance. You will combine two policies within the same company to get a discount percentage on both of them. You do want to shop around because this discount percentage will vary.

6. Periodically Review Your Policies

At least once a year, sit down and go over your policy. You could even call an agent and have them go over the policy with you. Markets change, needs change, and your coverage can change. If you don’t review it, you could either miss out on needed coverage or not have enough if something happens. It’s a good idea to review your policy around renewal time each year. You could go over it twice a year or whenever you have a life event happen, but once a year is usually enough to ensure you have the correct insurance coverage.