Frequently Asked Insurance Questions For First-Time Homeowners – Are You A First Time Homeowner? – Part of the economic stimulus package was a large tax credit for new home buyers. This was attractive because it was an actual tax credit, and not a loan. It did not need to be repaid. So many people who had never owned a home, or who had not owned a home for a few years, could take advantage of this deal to purcthase their first house. Another benefit of the incentive, besides putting more people in homes, was to help the whole housing industry. Hopefully, in the end, more people will own a home and more people will have jobs.
Did You Attend New Home Buyers 101?
As a new homeowner, you probably had to go through a fairly complex process. You had to fill out loan applications, prove you were qualified and then settle on your payments. Your monthly bill may only include your principal and interest. Or it may be structured so you are actually paying your taxes and other costs too.
Homeowners Insurance is A Prerequisite
But you need to consider one more bill. You also need to purchase homeowners insurance. Almost all mortgage companies will require it, and they may require you to prove you have it before you can close on your loan. Besides, for most of us, our homes are our largest asset. We certainly want to do everything we can to protect that investment. So in addition to learning all about mortgages and property taxes, you must also learn something about homeowners insurance.
The whole process of purchasing your first policy does not have to be that complicated. Here are some answers to common questions that people ask before they buy a home.
When should I shop for homeowners insurance? You should start getting quotes while you are still shopping. Your premium can cost a few thousand dollars a year in some cases, and you will certainly want to know that so you ca budget for it.
How much coverage do I need? A qualified insurance agent can help you with specifics. But if you are just running online quotes, you can estimate. You want to cover your home for the rebuilding cost, and this may not be exactly the same as the sales price. It is easy enough to look online for average rebuilding costs in your area. Your real estate agent could also get your this information. These are usually quoted by square feet, so you can just multiply your home size by that figure.
Do I just need to insure the building? A homeowners insurance policy should include home contents insurance so your property is protected too. It should also have liability insurance in case a visitor makes a claim against you. Finally, some relocation coverage is a good thing to have. This will help you find another place to live while repairs are made if your home is very damaged.
What if the premiums are very high? You may be able to save some money by adjusting the deductible. The difference in price between a $250 deductible and a $1,000 deductible can be quite a lot. Keep in mind you will have to pay that extra amount if you do have to make a claim. Hopefully, you can set aside some of your savings in an emergency fund.
How can I get the best deal? You can also take advantage of discounts. A common one is the multiple policy discount for covering your vehicles and homes with the same company. An insurer may also give you a break for anti-theft devices or safety features. You should also shop around. Insurers are not all the same, and you may do better with another company.
How to Shop For Homeowners Insurance?
One simple way to compare policies is to use online insurance quote forms.