How to Buy Homeowners Insurance
Buying a home is an athletic endeavor. Although finding the right place (for the right price) takes work, the first few laps are mostly enjoyable. Getting from there to the finish line, however, can be grueling. In fact, many exhausted buyers leave important insurance decisions up to their mortgage companies—just to save themselves a few steps.
The downside of letting the lender do the work? Not only are you leaving money on the table today, but you’re also passing on a skillset you could use over and over again to safeguard your home, belongings, and your bank account well into the future.
Begin your homeowners insurance shopping journey by following these 7 easy steps and you’ll have your insurance policy, and the keys to your house, in no time.
Step One. Change Your Mindset
Insuring your home and belongings isn’t a “one and done” deal. Even if this is the only home you’ll ever buy, everyone’s life (and insurance needs) changes. And, the insurance business is quite competitive. There’s always someone out there who wants the chance to serve you better than your current provider. Learn how to shop now so you can take advantage of these opportunities and take care of what is yours.
Step Two. Keep Control in the House-Hunting Process
Many things related to the location and construction of your house can factor in insurance costs. Knowing this ahead of time can keep financial surprises (and stress) to a minimum. These factors include:
Quality and location to the fire department
Proximity to the coastline
Age of the home
Condition of the roof
Quality of construction
Risk of flooding
History of earthquakes
Swimming pool or other special feature
Step Three. Learn Some New Vocabulary
A lot of words get thrown around over the phone and across the desk. Having a basic understanding of vocabulary ahead of these conversations can keep you from becoming frustrated or having a misunderstanding. The Insurify home insurance blog is a good place to start your word-learning journey. Many individual insurance company websites include educational links as well. Take advantage of these!
When you’re shopping for quotes online or in-person, ask questions and keep your glossary of terms in mind.
Step Four. Familiarize Yourself with Policy Types
There are several different “types” of insurance coverage that you can buy. These different types cover your home (and in some cases, the contents of your home) in the event of different disasters or perils.
These policy types include:
Basic HO-1
Broad HO-2
Special HO-3
Renters HO-4
Condo/Co-op HO-6
Modified Coverage HO-8
What kind of policy will your future home require?
When discussing policy types, you’ll need to think in terms of what perils the policy covers. Perils range from fire, windstorms, smoke, and vandalism to and explosions, riots, and even volcanic eruptions.
Step Five. Understand Your Options
Homeowners insurance is a collection of several different coverages that are meant to protect you financially when unfortunate things happen. These coverages include:
Dwelling Coverage. Pays for damage to your house and to the structure of your home. This includes damage to fixtures, such as plumbing, electrical wiring, heating, and permanently installed air-conditioning systems.
Other Structures. Pays for damage to fences, tool sheds, freestanding garages, guest cottages, and other structures not attached to your house.
Personal Property. Reimburses you for the value of your personal belongings, including furniture, electronics, appliances, and clothing that is damaged or lost even when they aren’t on your property, such as those at an off-site storage locker or with your child at college.
Loss of Use. Pays some of your additional living expenses while your home is being repaired.
Personal Liability. Covers your financial loss if you are sued and found legally responsible for injuries or damages to someone else.
Medical Payments. Pays medical bills for people hurt on your property or hurt by your pets.
Replacement cost coverage after natural disasters may require supplemental insurance product add-ons to your policy. Carefully read your policy to fully understand the ins and outs of your coverage. Keep an accurate home inventory checklist with accurate replacement value to ensure the largest payout from an insurance claim.
Step Six. Head to Insurify
Now that you’re armed with the basics, it’s time to find the best insurance policy for you and your real estate. Not only are you aiming to purchase enough insurance to satisfy your mortgage company, but you also want to make sure that you have the most comprehensive policy you can afford at the best price. One that:
Covers your structure and belongings
Protects you additionally should you be displaced
Provides you with liability coverage should someone be injured at your home or on your premises
Protects you against perils that are common for homeowners (water damage, for example) and to your home’s geographic location (for example, if you live in a flood plain, flood insurance is recommended)
Is with a provider that can offer you the best combination of discounts, payment options, and services at your price point.
Now to the most important part of the insurance shopping process…leave the agents and manual searches in the 2010s where they belong!
Use Insurify to start comparing apples-to-apples quotes that are tailor-made to fit your preferences and needs. A few minutes are all that’s standing between you and a cheap home insurance policy that covers your dwelling and your family. That’s right— Insurify is your one-stop destination to compare, review, and buy your home insurance, 100 percent online.
Step Seven. Review and Update Coverage Consistently
Buying a homeowners policy isn’t like putting on a 20-year roof. You don’t just buy it once and wait.
Reviewing your policy often to keep coverage in sync with your lifestyle and your home protects you financially and can even help you find even more ways to save. According to the Insurance Information Institute, you should re-evaluate your coverage when any of these things are happening:
When your policy comes up for renewal
When you’ve made major purchases or improvements to your home or property (like adding a room or installing a hot tub)
When you’ve added safety features (things like adding a burglar alarm can sometimes qualify you for more discounts)
When your lifestyle changes dramatically (marriage, divorce, and starting a home business are some examples)
Even outside of these events, you can always be scouting discounts offered by insurance carriers as a means to reduce your monthly insurance premium. A common way to cut costs is to bundle home and auto insurance with the same company. (You can save big on car insurance too, y’know.)
