Tips to Follow When Buying Your First Home Insurance Policy
Deciding to purchase your first home can fill you with excitement since it could be the stepping stone to getting married or starting a family. In any event, investing money in a property, is always a sensible decision rather than spending money on rented properties. Apart from making the investment needed on the property, you will also have to purchase a home insurance policy as a safeguard against natural and man-made calamities.
Regardless of whether you are purchasing a house or a condo, you would want to find a home insurance policy which can protect your investment adequately along with your personal belongings while also saving you money. Therefore, you must begin your search for a home insurance company to understand the costs and the kind of savings you can make, even as you begin searching for the property you want. What are the things you need to consider when searching for your first home insurance policy?
The Costs of Your First Home Insurance Policy
Most insurers quote prices for home insurance policies, are in the region of $952 per year while some of the expensive states can stretch the prices up to $2000. You must bear in mind that the prices are reflecting the average rates for home insurance after taking into account factors like discounts which could be related to no claims discounts, loyalty discounts, and age-related discounts.
As a first-time homebuyer, you will not be eligible to receive any discounts and your best options would be to gather information about how you can get the best prices for your home insurance policy. The money you manage to save on the insurance policy could be diverted to pay the mortgage or even make home improvements. Having discussions with the home insurance professional before you purchase your home might make you aware of the problems which may exist related to high costs.
What Are The Reasons Which Could Be Your Home Insurance Policy Expensive
- If you have made claims on a previous policy which could even be a renters policy, you would be ineligible for a no claims discount causing you to pay much more for the home insurance.
- If you have never owned insurance earlier on a home or your insurance history reflects a gap.
- If you have defaulted on insurance payments and had a previous policy canceled by the insurance company. Insurers are very careful when it comes to this matter and will even take into account any car insurance policies which may have been canceled.
- The home insurance policy will be expensive if the property you intend to purchase is located in an area which is prone to problems or is lying in a flood zone.
Tips to Follow When Purchasing Your First Home Insurance Policy
Begin Your Search For the Home Insurance Policy Early
You are advised not to leave the purchase of the home insurance policy to the last minute because it will leave you with limited options in your hand. When you make poor decisions while purchasing home insurance, you could lose hundreds of dollars in the short term while the costs could increase by thousands in the long term.
You need to conduct a detailed research about the best home insurance available in your area and insurance companies are intelligent enough to target their products on the kind of risks they are likely to confront. Therefore, begin conducting your research early to have the best options for you after considering the area where you intend purchasing the property.
An Insurance Agent Can Sell You Home Insurance Cheaper Than The Mortgage Lender
You may be offered a home insurance policy by your mortgage lender or even your bank. They are doing so simply to ensure their risks are covered if something untoward happens to you.
However, the prices they charge are generally higher and will definitely cost you extra money. They may not consider some of the advantages you could be having over other people. Under the circumstances, you would be better off having a discussion with a financial advisor or an insurance agent before you confirm the deal.
Have An Established Insurance History
You can be eligible for claims discounts along with loyalty discounts if you have an established insurance history. The kind of savings you can generate from the discounts could be as high as 20%. You can either purchase a renters policy or even inquire with your insurance company to understand if they are willing to consider the insurance history of your parents if you have lived with them for some time and no claims were made.
Insurance companies accepting a history of this type is not guaranteed but, chances are that you could get lucky and they may consider the history of your parents to make you eligible for discounts.
Home Inspection Can Save You Money In the Long-Term
Getting the property you intend to purchase inspected by a home inspector will make you aware of any problems related to the property or the area. The home inspector may also provide some suggestions on the kind of improvements you need to make which can help in getting you some discounts on your home insurance policy.
Saving money by cutting down expenditure should be your main goal when you decide to invest in a property. Cutting down unnecessary expenditure on home insurance can save you a significant sum of money every year which you can use for other expenses.
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