Learn the Basics of Home Insurance
Monday, September 16, 2019, 6:00 AM | Leave Comment
The day you buy your first home is a day to remember. Whether you plan on holding onto it or fix it up to sell later depends on your discretion.
Either way, something in your brain should tell you about the serious responsibilities ahead of you. This includes finding the right insurance coverage to protect your assets.
Getting home insurance is far different than buying insurance for your car.
Most home insurance plans are specialized to compensate for specific concerns. The location of your home, the possessions within, and additional living expenses may determine your coverage limits.
Insurance plans such as these may be purchased separately or in a bundle. But, it’s important to know it’s all for necessary reasons, so that you can go looking for Jacksonville homes for sale with sufficient insurance education in your head.
Here are some tips to guide you.
-
Insurability
When you meet with a home insurance agent, they’ll ask you some questions about the home’s age and components (roofing, electrical, plumbing, etc.). The agent will also want to know if it’s located in a disaster-prone area. If your home shows sign of potential hazards, then you might pay higher premiums or be denied coverage altogether.
Before you close on a home, check local records to see if you’re in a disaster zone. Make sure the property is within the range of a fire & emergency department. Run a CLUE (Comprehensive Loss Underwriting Exchange) report for a recorded history that’s suitable for presentation.
-
Deductibles
Each insurance policy you pay into will no doubt add onto your mortgage costs. Thus, it makes sense to save money on every deal you can make. Start by taking advantage of deductible discounts from your insurance providers.
Insurance companies typically offer discounts starting at $500. Deductibles vary based on how they’re calculated. The calculated rate remains fixed for the duration of your policy. Some deductibles can increase up to $1,000 depending on the amount of claims filed.
-
Replacement Cost Values
Whatever insurance policies you choose will cover the home and the property attached to it, not the land it’s on. Most providers allow for guaranteed reimbursements in the event of loss. These replacement cost values (RCVs) are the most expensive portion of any plan, but are necessary.
Premiums are high because your home’s RCV reflects the value your paying for the home minus depreciation. If your home suffered a substantial amount of damage, then the cost should be more than enough to rebuild. Insurers may try to sell you on a 200% RCV instead of the 175% since it provide double value.
-
Customization
It is possible to go overboard on home insurance. You only want a certain amount of coverage for what you have now. But things change, so you want to be able to customize your options.
As with RCVs, liability coverage is adjustable. Liability insurance is good for damages incurred on or near your property. Insurers can offer an “umbrella” policy for coverage up to $1 million per customer. Umbrella premiums can cost upwards of $500. The more money spent, the more coverage you get.
