A Home Buyer’s Insurance Guide
Buying a home is one of the most exciting times of your life. After finding the property meant for you, it’s equally as important to protect such an investment. As a home buyer, not only do you need insurance to protect the property, but also for your personal and financial well-being. Below are several important factors to consider when discussing coverage with your agent.
What is Homeowners Insurance?
As a new homeowner, you’re responsible for the safety and upkeep of the property. But, we all know accidents happen. Homeowners’ coverage, also referred to as Hazard Insurance, goes beyond the structure and other structures of the location. Coverage joins with contents, loss of use, liability coverage, and medical payments coverage. The following are key questions to consider when speaking to an agent about coverage.
How Do I Know What’s Covered?
• Always Ask – a licensed agent will be able to talk you through coverages and give you options to buy coverages that your Homeowners policy doesn’t include.
• Homeowners Coverage – As mentioned above, there are multiple levels of coverage that come with a homeowner’s policy. These can include (but are not limited to):
- Other Structure
- Medical Payments
The above coverages come with exclusions and inclusions (most companies have different levels of coverage). Your agent should review and talk through these with you. Some typical exclusions are (but not limited to):
- Flood Insurance
- Excess Liability Insurance
- Valuable Articles Insurance
- Equipment Breakdown Insurance
- Water Back up coverage
*** Many of these coverage types can be endorsed onto your policy or written on a separate policy***
How Much Insurance Do You Need?
Since buying your property, obtaining appropriate insurance for your home with the level of coverages and additional coverages is vital to your investment. Most companies (always ask your agent) do offer “Guaranteed Replacement Cost” coverage on the dwelling coverage of the policy. Unless you are looking to save minimal premium and self-insure yourself, it is always recommended to find a policy with the GRC coverage.
Figuring Replacement Costs on Home & Contents
Every home is unique. So, there are different factors insurance companies use to determine a replacement cost value for the home structure. These can include:
- Square footage
- Building Materials (ex: brick, wood, roofing finishes)
- Building Finishing (ex: custom work, upgrades, built-ins, etc.)
Most companies will complete an external inspection (sometimes internal) that will help generate a replacement cost value. Guaranteed replacement cost coverage typically only applies when the home is insured value.
The homeowner’s policy includes contents coverage. However, you and your agent should review and determine this. You know more about how much you’ve invested in your content’s coverage (your clothes, furniture, anything you can carry out of your home if you moved etc.) Note: More valuable items (jewelry, paintings, antiques, etc.) should be discussed with your agent and insured more to be sure you have the best coverage.
The goal of replacement cost is to insure your investment accurately and adequately. Your Daigle & Travers insurance agent will discuss these factors with you to give you a reasonable replacement cost estimate.
Factors that Determine Your Insurance Rates
- Replacement Cost
- Deductible Amount
- Prior Losses
- Credit Rating
- Level of Coverage
Saving Money on Homeowners Insurance
Higher deductible – Having a higher deductible option can lower your overall premium. Check with your agent to see the levels of savings and affordability.
Security Systems – Installing an alarm system will not only save on your premium, but will be an extra level of protection. This can help to prevent losses and keep your property safe.
Multiple policies – Carrying multiple lines of coverage with the same company can reduce your premium. Consider insuring your cars and life with the same company for discounted rates.
Review and check available discounts the insurance companies offer (Some may offer AAA discounts, safe driver course credit, etc.)
One of the best ways to save money on home insurance is to talk to a licensed insurance agent/broker. Independent agents like Daigle & Travers have access to the best A.M. rated insurance companies, and these relationships can save you time and money. At Daigle & Travers our goal is not to only give you the best price, but the most adequate coverage to protect your home investment.
To find out the cost of insuring your home, give us a call at (203) 655-6974. The Daigle & Travers insurance experts are here to help you find the best policy to suit your needs.