5 Insurance Facts for First-Timers
If You’re Buying Your First Home, Keep These Tips About Homeowner’s Insurance in Mind
Credit is Key
Of course you know your credit score is important when securing a good mortgage rate. I bet you didn’t know that your credit is also reflected in your home insurance rate. The higher your credit score, the lower a liability you are to an insurance company. Policyholders with a higher credit rating have historically proven to home insurance companies to be less likely to file claims.
It’s seldom wise to choose the first home insurance rate your offered. Rates and coverage vary from company to company, and the home insurance policies they offer change regularly. Each company uses their own algorithm to determine customer premiums. Get the best deal, and make sure you shop around.
Cover Your Bases
While you want to save money on home insurance, it’s important not to skimp on coverage. Standard home insurance policies typically offer protection from a variety of potential risks, ranging from liability to damage from weather-related perils. However, you may want to adjust or add coverage depending on your needs.
One matter you should pay close attention to is your amount of dwelling coverage — the part of your policy that protects the structure of your home. You should have enough dwelling coverage to rebuild completely in case the house is destroyed by a covered peril. That amount, however, is often different from the purchase price.
Save with a Bundle
Buying home and auto insurance from the same provider – most sell both – can save you as much as 20 percent on your annual premium. Do you have multiple vehicles? Or even a boat? You can often bundle all of these items with one carrier.
Know Your Risk
When you’re evaluating potential homes, consider the risk each proposes. Is the house in a high-risk flood plain? Standard home insurance doesn’t cover flooding. For this protection, homeowners must purchase a separate policy from the National Flood Insurance Program. Just a few inches of flood water can cause tens of thousands of dollars in damage.
Does one of the homes you’re considering have a swimming pool or trampoline on the property? Either factor can increase the amount you’ll pay for home insurance.
Remember, even veteran home buyers can get tripped up by the process. But take your time, ask plenty of questions and keep your eyes open for potential problems, and you’ll be well on the way to finding the perfect first home.