Learn the Basics of Homeowner’s Insurance When Buying a Home

One of the requirements for purchasing a house is to have a homeowner’s insurance policy. You will be required to have a policy in place before you can close on the property. Take the time to learn a few basics about this policy if you are a first-time home buyer.

1. Know as Much as Possible about Your Future Home

Have the seller’s disclosure and MLS listing in front of you when you contact the insurance companies. Depending on the company and where you live, you’ll be asked everything from the age of the home to the size to the type of roofing and siding on the home to the number of bathrooms. Not all insurance companies ask the same questions, but they will also want to know where it’s located and the age.

2. Compare at Least Three Quotes and Ask Your Lender

Insurance companies vary widely in how much a homeowner’s policy will cost. Don’t assume the company that gives you the lowest rate on car insurance will be the lowest on home insurance. Even with a multiple policy discount, you may find a cheaper policy elsewhere. If you’re not sure how much is a good price for this type of policy, ask your lender. They’ve worked with enough loans to know which auto insurance companies have the lowest rates. It’s also a good idea to contact an independent insurance company that offers multiple policies.

3. Get the Right Coverage

Insurance companies can offer a wide variety of coverage options, and lenders often have minimum requirements. Other than that, it’s up to you to decide how much coverage is enough. You would want the structure itself covered enough to rebuild if it was destroyed in a catastrophe. You also want your personal belongings covered and liability coverage in case someone is hurt on your property.

4. Know the Difference between Replacement Cost and Actual Cash Value

One of the major differences in homeowner’s policies is replacement cost and actual cash value of your personal items. This includes furniture, electronics and items such as clothing and linens. Replacement value is how much it would cost to replace these items if you had to go out and buy them today. Actual cash value is how much these items would be worth if they were sold today. The difference can be big in how much you are paid out in a claim and therefore, how much the policy costs you. Just remember that couch you’ve owned for 20 years might only be worth $100 today, but you couldn’t buy another one for that price.

Buying homeowner’s insurance shouldn’t be a decision you make in 10 minutes. You should get multiple quotes, compare what they offer as well as what they charge, and make a decision that is good for your budget and protects you if you should have to file a claim. You never want to regret the decisions you’ve made when the time comes for a payout.

ASA Insurance provides excellent coverage for car and home insurance in the Salt Lake City area with the lowest rates to the English and Spanish communities. Affordable rates and superior service for all home, auto and business/commercial insurance needs.

Asa Insurance provides excellent coverage for auto insurance in the Salt Lake City area with the lowest rates to the English and Spanish communities. Affordable rates and superior service for all home, auto and business/commercial insurance needs.