Insurance Tips for First Time Home Buyers
Deciding to buy a new house is a big step in one’s life and obviously, we all want to get it right. What’s important is that we prepare ourselves from every aspect. It’s both an exciting and nerve wrecking time for an individual, especially for those going in for home loans as an aid to fulfill their dreams. One of the first things to do is to make sure that your home is insured. And this should be done before buying your house.
Choosing the right insurance is as important as choosing the right home. For all those people who want to know why here’s what insurance helps with. Insurance is basically coverage or safety net for you and your house in case anything unfortunate were to happen. It’s a plan that helps secured you in future. Here are a few things that could help you get yourself the right insurance and Insurance Tips for First Time Home Buyers.
- Get your priorities right (yes, this applies to insurance as well) – Make sure you understand your commodities and know what you want to be covered by the insurance. This will help you get the right insurance that you are looking for. And it’ll also help protect your important commodities.
- Your future home’s condition – Make sure you know every glitch that your future home might have. This is important as you need to know what to have coverage for when you’re moving into a new home.
- Know your locality – This is something not everyone would do for insurances purposes but this is key. This does affect the insurance you’d have to go for and also the kind of premium you’ll be paying. If it’s a locality prone to crimes and robberies you’d need a more secure insurance thus a higher premium.
- Research beforehand – This would require a great deal of planning because of you, first of all, have to be sure of the house you are going to buy and the location of it. After which you can do a research for your insurance, this would require you to analyze the location thus giving you a better idea of the premium you could get. The best place to start with is CLUE (comprehensive loss underwriting exchange), it’s a report of the property you cloud invest in, it gives you a better idea of the losses and claims on the house.
- Make sure you know your insurance – When you go in for a home loan, you’re most likely to get an insurance as well. Make sure you know the difference between replacement cost and market value. Replacement cost covers all the expenses in case you have to rebuild your house with the same kind of material whereas market value offers you only the amount that their house is worth in the current scenario which is likely to be much lesser than what it would take to rebuild the house with the same material.
- Bundling – Usually, when you go in for one insurance they would offer you with another insurance deal as a package, this is called bundling. Bundling helps save money overall on your premium, but this might not always be the case. Sometimes when your needs are specific it might not provide a complete coverage and may also inhibit you from discounts in future.
- Fill in gaps – Most insurance especially those you take for home loans come with exclusions. Thus it’s important to customize it and add your requirements based on either your location or demands. For example, if you live in an area prone to earthquakes, or other natural disasters you might want to insure your home from it.
- Stay on your tip toes – With insurance, it’s key to keep yourself updated. This is important because any changes in your home or location instantly affect your premium. Even if you upgrade your house you might want to get your insurance checked. And added security system would reduce your premium whereas an added room or garage would increase it.
- Talk to an expert – It is better to do get yourself someone who knows the business and also understands the locality you want to move into before buying a house or taking a home loan. This has a great impact on the kind of insurance you’d need to get and your premium as well, having a proper guide would help you through this.