Buying a house could be so daunting that it’s quite easy for some people to forget about homeowners insurance. However, in the unfortunate event that something bad happens to your home, your homeowner’s insurance policy would play a crucial role.
Before finalizing your insurance plan, let these three practical ways guide you:
1. Ensure that you’re getting sufficient coverage
Your coverage level is the most crucial component of your homeowner’s insurance plan. Don’t pay more than what you need. It’s vital that you know exactly what’s covered, however, so that you won’t have issues should you need to file a claim in the future. For instance, a standard insurance policy doesn’t cover earthquakes or floods, and you might want to get extra coverage for these or similar events if you reside in a flood or earthquake-prone area.
2. Consider putting your insurance payments in escrow with your mortgage payments
If you are like the majority of homeowners, you could track your insurance payments to your monthly mortgage payments. Your lender would pay your premiums — sometimes, even your property taxes — from your escrow account. According to Primary Residential Mortgage, Inc. and other mortgage brokers in Tempe, lenders like this option since it ensures that your insurance is paid every time and on time. This, in turn, assures them that their investment is safe. In most cases, you might have to pay a year’s worth of insurance premiums at closing.
3. Discuss your options with at least three insurance providers to compare quotes
Your mortgage lender might and could require that you have ample homeowner’s insurance coverage, but the insurance provider you choose is solely up to you. Check customer reviews and compare prices and coverage before you make a choice. Keep value in mind while shopping, and don’t just go with a company that offers you the lowest rate.
Make certain to understand exactly how your coverage level functions together with your homeowner’s insurance plan. Don’t be afraid to ask questions to make sure that you purchase the right coverage level at a price that you know you could pay off.