Buying homeowners insurance is just like buying peace of mind for what is probably your biggest investment. While it is optional if you are paying cash for your new home, its required if you are obtaining financing. In fact, your mortgage company won’t allow you to close on your new home until you have an insurance policy. Whether you are forced to have homeowners insurance or not do you know what you are actually buying? Below are just some of the things to consider when purchasing homeowners insurance.
Selecting an Insurance Carrier; All homeowners insurance companies are not created equal! Shopping around for homeowners insurance is much like shopping around for a mortgage. In order to get the best rate and coverage you will want to work with a local broker. Not just any broker though, one who has access to as many carriers as possible. If the broker is only able to write insurance though a few carriers your options will be limited and you may not be getting the best coverage for the rate.
Cheapest rate; Most people are inclined t go with the cheapest insurance policy thinking it’s all the same, but it’s not. What’s actually covered and who the insurance carrier is will greatly vary. In addition to the shopping rate always ask your agent to shop the quality of the carrier too. As the saying goes, you get what you pay for, sometimes the cheapest rate is not your best bet.
Investigate the carrier; Even when you are working with a reputable broker, you will still want to do your own investigation into the insurance carrier. Find out their financial rating with the state. You can also check the better business bureau along with insurance forums. Finding out their claims paying practices and financial stability is key.
Why? Because in a catastrophic scenario, like a hurricane, you will probably be one in thousands of policyholders calling the insurance company to file a claim. If the company has a history of bad claims practices you should be left in a ling line that’s going nowhere.
If the carrier is not financially solvent, which means they don’t have funds to pay your claim, you could be left with nothing.
Understanding Insurance Coverage; Do you know what you are getting when you buy homeowner’s insurance? When purchasing a new homeowner’s policy, it is important to understand the different types of coverage you are getting. Any good insurance agent will tell you how much coverage you need to protect your investment. They will also give you a brief overview of the other coverage options on the policy. You will have standard coverage along with some optional coverages.
Standard Coverages on Your Homeowners Insurance Policy;
Dwelling Protection; Covers damage to the home and attached structures such as a garage or fence attached to the home.
So before buying any kind of home insurance policy please follow the above tips. For more information about insurance please visit our website.
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