Okay, you’ve worked hard to find your dream home, to get all those documentations to get your mortgage approved and you’re going to move pretty soon. Let’s consider these crazy good tips to buy your first homeowner insurance before you go on with preparing to your home entrance party. Whether you were renting a home or sharing a house, you had to deal with some kinds of insurances. Still, you’re more likely not to be informed about buildings’ insurance all in details. Here, we’ve picked up some valuable tips for you out there. So, now you need both buildings and contents insurance, which may be one of the conditions of your mortgage lender. These tips are for you to ensure you’ll be able to protect your largest investment!
Have several options to compare coverage
As we’d mentioned in one of our articles earlier, you really need to have in mind some comparisons when buying a house, choosing the right neighborhood and so on. Here is the same. You should check out at least three companies and compare their conditions. Now it’s so easy to get the whole information about any company just searching online. You can find price lists, coverage and what is more important – costumer reviews. Only after making sure you’re ok with all the info you got, you can purchase your home insurance. Remember, you’ll have to deal with your insurance company during disaster and that means panic, nerves and many other disturbing factors, so be sure there are awesome costumer service specialists. And, in the end, while trying to lower expenses, don’t underestimate the importance of coverage. You shouldn’t save on this.
Know the details of your insurance policy
HO1 – basic form
This covers basic pointed perils for direct damage to property. HO1 is rarely used, because homeowners demand more coverage. Due to its narrow list of perils, HO1 insurance policies are out of mainstream use today with the more common HO3 policy considered standard coverage.
HO2 – broad form
This policy is also a named-perils policy and covers only those points that are mentioned in the policy. It usually includes windstorm, lightning and fire. The weak point of this policy is that if any peril is not included, the insurance doesn’t cover it.
HO3 – special form
This is the minimum coverage required by the mortgage lender. So this policy is the most commonly purchased one. Special form is an open perils policy and covers any direct damage to the house. Still, here again the coverage for personal property is for named perils only.
HO 5 – comprehensive form
This is an open perils policy, but also includes direct damage or loss of personal property. Here any direct damage or loss to realty or personal property is covered, only if it is not specifically excluded.
HO 8 – modified coverage form
This policy is for older homes. Here they pay what it could cost to repair or replace damaged property. HO 8 also provides cheaper functional replacement.
HO 6 – unit-owners form
This is a modified HO 2 policy, which is designed for owners of condos or cooperatives.
HO 4 – contents board form
This is again a modified HO 2 for renters. Not only does this policy cover personal property, but it also includes insurance of at least $ 100.000 for damage to the property or for injuries to other people in the rented dwelling.
Be sure to ask many questions
Knowing all details of your homeowner’s insurance is as important as understanding other aspects of homeownership. If you don’t have any answers to even a single question, ask an insurance expert. Thus, real estate agents could be great at whatever is related to a home buying and home selling process, they may not be that great at insurance details. Here we should also mention, that many insurance companies have strong network of professionals, including real estate agents. In this case, your agent is the one who will answer all your questions. If you’re a first time home buyer, it’s really very important to find the right person to collaborate with. You should trust him or her to make your deal happen.
Understand your needs
Knowing details about homeowner insurance policy is important but not enough. You should also consider what you need out aside from those forms. Think about your future plans and understand your needs. Consider the specific aspects of your new house. Does it have a pool? Or is there a security system in the house? Do you need a special policy to cover possible flood? Or maybe your four legged friend is of certain breed, which will affect your insurance. All these questions are important to know beforehand and consider when buying your homeowner insurance. The sooner you start to shop for the insurance, the better you can understand your needs and the more time you will have to find the best option for you.
By: Hermine Aslanyan
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