Buying a home is an important purchase that comes with a long list of things to do before you can officially buy your home—submit financial documents to your lender, secure your mortgage, get an appraisal and a home inspection. If you are financing your home purchase, you’ll likely be required to also show proof of home insurance. With all of your other expenses, shopping around for the best insurance rate is common and recommended (just like with any insurance you buy!). Even if you own your home outright, the right home insurance can help you to protect your assets.
We recommend seeking at least three different home insurance quotes. The benefit of going through an independent home insurance agent means we will do all the price hunting for you! You can review several policies, their costs and coverages all in one office.
Things to keep in mind when comparing home mortgage companies and their policies:
While you need a policy within your budget, you also do not want your only determining factor to be the cost. The amount is billed annually but is usually collected monthly and saved in an escrow account for you by your lender to distribute to your insurance company when the time comes. For most people, the cost of insurance is included in their budget under their mortgage payment and the cost is easier to work around.
It is best to select coverage options that make sense for the home you are buying and evaluating the cost against your budget. If you live in an area that is not prone to earthquakes or sink holes, then coverage for these disasters can be left out. However, if your hometown may experience flooding or major storms like hurricanes or tornadoes, then including these coverages is a must.
Policy Coverage Verbiage
Each home insurance company may vary in the wording or allowances in their polices. Review each quote you receive in detail. Where one company may include select coverage options, others may consider it an elective coverage (and therefore, could increase your costs).
In addition, each home insurance company may set different maximum benefit limits. When comparing your home insurance policy options, make sure these amounts are similar—or take into account the better policy limits and how it affects the cost of the policy.
Compare Your Home Insurance Deductibles
A deductible is the out of pocket portion of repair costs you are responsible for before your policy will extend coverage—just like a medical deductible. It is common for many repairs or expenses to require the deductible to be met first, often as a percentage of the home worth that is insured. Make sure each quote has a similar standard deductible and that you are comfortable with that potential out of pocket expense. The lower you request your deductible to be, the higher the potential is for a more expensive policy.
Working with an independent home insurance agent at Magruder Agency enables you to receive several policy quotes for home insurance. We are not driven through commissions to recommend any one policy over another. The insurance companies all pay the same commission to us for a new enrollment—so you’ll get an honest opinion on what the best options for your home insurance needs really are.