2 Myths Holding Back Home BuyersFreddie Mac recently released a report entitled, “Perceptions of Down Payment Consumer Research.” Their research revealed
What Type of Insurance Do You Need?
Dated: October 11 2018
While you’re not required to
If you’re just starting the process of shopping for homeowners insurance, ask yourself these vital questions first, to help point you towards a homeowners insurance policy that’s right for you.
1. WHAT’S THE HISTORY OF THE HOME?
If your home has a previous owner, request a claims history report from the seller, also known as a CLUE report — this will detail prior home damage, such as floods, fires, or other incidents. CLUE reports can be obtained only by the owner of the
Try to gather as many details as possible to help gauge potential issues and keep in mind that a newer home is typically in better condition than an older one, so it could cost you less in premiums.
2. WHAT LEVEL OF COVERAGE DO I NEED?
First, determine the replacement cost of your home by having a home builder look at your home and provide an estimate of the cost to rebuild. Once you’ve determined your home’s replacement cost, you can decide what kind of coverage is the best fit. There are three levels to consider:
§ This covers your home along with the value of your belongings after deducting depreciation.
§ This is the actual cash value without accounting for depreciation, and assumes you’d repair or rebuild your home up to the original value.
§ This is the most comprehensive
You don’t want to run the risk of insuring your home just enough to cover your mortgage because that usually only covers 90% of your home’s total value. It’s a good idea to get coverage for more than your home is worth.
3. HOW MUCH OF A DEDUCTIBLE AM I COMFORTABLE WITH?
A deductible is
You should only use insurance to cover significant expenses. For example, if fixing some roof shingles will cost you $400, you should avoid filing a claim, just pay for it. The more claims you file, the higher your monthly premiums will be.
4. WHAT ARE MY PERSONAL BELONGINGS WORTH?
When protecting your possessions, you might want more coverage than a typical policy covers. If you have any items of exceptional financial worth, such a family heirloom, a piece of artwork, or jewelry, you should
There are two levels of coverage for possessions – actual cash value and replacement cost. The actual cash value covers what you’d receive if you sold it today, which is less than what you paid. Replacement cost covers the cost to buy a brand-new one like your old one.
5. IS YOUR HOME IN A HIGH-RISK ZONE?
If your home is located in a high-risk area like a flood, hurricane, tornado zone, or the closest fire station is several miles away you may have to add a rider to your insurance to cover these costs specifically. Sometimes a home that wasn’t in a flood zone originally is then changed to a flood zone- make sure you check- don’t take the owners word for it- they may not even know!
Once you decide what type of homeowners insurance is right for your home, shop around and get several quotes to offer you some leverage with negotiations. If you have auto insurance with a company that also provides homeowners insurance, you may be able to get a competitive rate with them since you’re an existing customer.
If you’re getting started looking for home insurance and looking for some insurers, get in touch, we can help you with everything from what to consider and make some recommendations for coverage, insurers, and more.
I am a Montgomery County, Maryland Realtor specializing in the Gaithersburg, Rockville, North Potomac and Germantown areas. Having lived in Montgomery County for over 25+ years, I understand the mark....
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