Are you thinking about buying your first home? Has the bank informed you that you’ll need homeowners insurance before the closing papers are signed? Picking the right insurance company and insurance plan can seem scary and confusing at first, but here are some tips to help get the right insurance coverage:
Don’t opt out of flood coverage: If your home sits in a flood plain, you’ll obviously want to be covered in the event of a flood. But what if your new home has a very low flood risk? In that case, you should still consider purchasing flood coverage. Your insurance company may consider any significant water damage to be a flood, regardless of where the water originated. For example, if a water main breaks outside your home and fills your basement with water, your insurance company may refuse to pay for damages if you don’t have any flood insurance. Fortunately, if you don’t live in an area with a high risk of flooding, adding flood insurance is unlikely to substantially increase your monthly premium.
Choose a high deductible: A homeowners insurance policy is best for things that you can’t pay out of pocket. If your roof blows off in a freak storm, you want to be covered for the damage. On the other hand, you probably don’t need coverage if one of your windows has a small chip from a rock sent flying by a lawnmower. Every claim you make on an insurance policy can raise your monthly insurance premium, sometimes by a significant amount. By having a high deductible in the first place, not only will your monthly premium be lower than with a low deductible, you’ll also help eliminate potential urges to make frivolous claims against your insurance policy.
Ask for discounts: Do you have car insurance? You may be able to save money on insurance by purchasing homeowners insurance from the same company. Some companies will also give you discounts for living within a certain radius of a fire station or if your potential home is in what they consider to be a low-crime area. If you’re planning on remodeling an antique home, your insurance company may decrease your premium if you have an electrician certify that the wiring is modern and up to code. Adding security doors or a home alarm system may also bring your monthly premium down. Some of these discounts are automatic, while you may need to ask about others. Don’t be afraid to question your insurance agent about what you can do to lower your payments.
Don’t opt out of flood coverage: If your home sits in a flood plain, you’ll obviously want to be covered in the event of a flood. But what if your new home has a very low flood risk? In that case, you should still consider purchasing flood coverage. Your insurance company may consider any significant water damage to be a flood, regardless of where the water originated. For example, if a water main breaks outside your home and fills your basement with water, your insurance company may refuse to pay for damages if you don’t have any flood insurance. Fortunately, if you don’t live in an area with a high risk of flooding, adding flood insurance is unlikely to substantially increase your monthly premium.
Choose a high deductible: A homeowners insurance policy is best for things that you can’t pay out of pocket. If your roof blows off in a freak storm, you want to be covered for the damage. On the other hand, you probably don’t need coverage if one of your windows has a small chip from a rock sent flying by a lawnmower. Every claim you make on an insurance policy can raise your monthly insurance premium, sometimes by a significant amount. By having a high deductible in the first place, not only will your monthly premium be lower than with a low deductible, you’ll also help eliminate potential urges to make frivolous claims against your insurance policy.
Ask for discounts: Do you have car insurance? You may be able to save money on insurance by purchasing homeowners insurance from the same company. Some companies will also give you discounts for living within a certain radius of a fire station or if your potential home is in what they consider to be a low-crime area. If you’re planning on remodeling an antique home, your insurance company may decrease your premium if you have an electrician certify that the wiring is modern and up to code. Adding security doors or a home alarm system may also bring your monthly premium down. Some of these discounts are automatic, while you may need to ask about others. Don’t be afraid to question your insurance agent about what you can do to lower your payments.
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