Lessons Learned from Years with Home

March 17, 2019

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How to Buy Home Insurance

When buying a home, many people overlook the importance of shopping for home insurance. It’s an all so familiar scenario – title and/or escrow companies frantically calling insurance agents and requesting a home insurance binder. To avoid this complication, start looking for a suitable homeowner policy as soon as both parties have agreed on a price.

The following are helpful tips to guide you as you shop for homeowner’s insurance:

Insurability Factors

To quote you a policy at the best rate, your insurance agent needs to know certain details, such as when the house was built, how old the plumbing and electrical systems are, what type of roof is installed, the house’s square footage, the number of filed claims in the past 5 years, Location and so on.

If a property is located in a rural area without a fire department or even a fire hydrant on the street, an insurance company may deny coverage. If that is the case, you can approach a specialty or surplus-lines insurance company, but it usually takes longer to get a quote from them.

Deductible Amount

Yes, it’s true: you can save more money if you have a higher deductible on your insurance. Usually, you will get a discount if you go for a $500 deductible, and this will even increase if you raise your deductible. The highest deductible you can get with most companies is $10,000, but keep in mind that in most cases, you cannot get a deductible above $1,000. Make sure you and your lender are clear on this before you opt for a higher deductible.

Your Insurance Needs

Agents usually make use of a cost estimator to come up with a cost replacement estimate. This will make sure that your house is insured for the right amount. Remember that insurance firms do not insure dirt, so if you bought a house with a massive lawn, don’t be astonished when you learn that you are covered for a much smaller value compared to the price for which you bought the house. Only the house itself is covered, not the land.

Policy Options

You will actually be able to choose features for your home insurance policy, depending on what you want. For example, you can get liability insurance, which most homebuyers tend to forget about. This helps you in the event of claims to property damage or bodily injury. Let’s say you accidentally caused a fire on your neighbor’s property. You may have to move to another neighborhood, but your neighbors will be paid by your policy.


Finally, make sure you’re getting all of the discounts for which you are eligible. For example, you have a home alarm system that is monitored by a central station, this will probably fetch you up to a 10% discount. Ask your agent about discounts.

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