Saving money when shopping for a homeowners insurance policy

When buying a home it would be easy to be overwhelmed with the endless questions and uncertainties. One of the necessities that needs careful planning and research is homeowners insurance coverage. Required by mortgage holders, policies will provide coverage for damage due to lightening, fires, falling objects, and theft of property. These same policies exclude, for the majority, flood and earthquake coverage.These must be purchased separately to add to the policy. Some lenders are actually requiring flood insurance and are passing the cost on to the purchaser who are surprised to find that they live in a flood zone. Earthquakes seem to have been more frequent in the most recent years and some of this has translated to high premiums for the buyer. However, anyone who has lost their home and possessions see this as a worthwhile investment.

 Most people, having taken on the huge commitment of a mortgage, are anxious to explore the most economical avenue in homeowners insurance. The most important first step is shopping around for the best deals. Contacting an independent agent is helpful in their ability to provide quotes from a wide base of sources. That way, the buyer has access to rates and possible discounts that the various companies offer. Of course, the agent might work with certain companies only but the benefits of multiple choices would outweigh this concern. In our internet driven age it is easier than ever to access agents and companies to find a place to start. Word of mouth can be helpful also for every potential purchaser knows someone who has traveled the same road in the search for home insurance. Avoiding their pitfalls and missteps can be invaluable for the buyer. If the choice has been an independent agent, inquires should be made to the insurance licensing and watchdog organizations. The Better Business Bureau would have record of any complaints and, if so, how they were resolved.

 Some companies have made changes in the treatment of deductibles. Basically, a higher deductible equals lower premiums. If a person were to go from a two hundred fifty dollar deductible to five hundred that would equate to a 12% saving, five hundred to one thousand 24%.  However, obviously, a person who has chosen a one thousand dollar deductible must be prepared to pay that amount in the event of a catastrophe. Percentage deductibles, from 1-5%, are now being substituted for the flat rate deductible. For example, if a home whose replacement value is $250,000 is destroyed, the deductible would be 1-5% (depending on the policy wording) of that amount. It is important to remember that cost to replace, not market values, will be the determining factor in these issues.

In the excitement of becoming a home owner the prudent buyer will have factored in the cost of insurance before making the purchase. Estimations should include cost to replace an older vs. a new home, materials needed for replacement, location, square footage and distance from a fire hydrant. The value of the land should not be included.

When looking into discounts, buyer be aware that most insurers look favorably on home security. An prospective owner should buy the most comprehensive coverage that he or she can afford. Letting the lender see the value placed on security is an important part of impressing them with the buyer’s intention of being responsible in this new commitment. Placing home insurance with the same company that holds the auto insurance is a wise move, also, as it usually translates to more savings for the buyer.

Unless there has been some difficulties, remaining with the same company for several years is an excellent idea. Most companies have loyality discounts that would equal yet another savings. Even if a buyer is very satisfied with the policy, it is advisable to check the policy provisions once a year. That way, there is no chance of surprise should a crisis occur. An example of this is the aforementioned percentage deductibles which can be included in the policy.

Buying a home and home insurance is an exciting and expensive proposition. However, careful shopping and calculations can provide the buyer with significant savings to enhance their purchasing experience. By following these suggestions the headaches can be minimized and the happiness magnified.