When buying your first home, it is both exciting and scary. First time home buyers can become overwhelmed with all the steps required to purchase a home. From mortgage approval, to making an offer, Going through home inspection, to paying closing costs, and also getting the right home insurance. Having a Realtor you can trust will help you through all these steps and make the process of home buying less stressful and more enjoyable.
It is important to understand home insurance terms for the home buyers to pick the right insurance policy, it is also important to understand the changes that you can make to your home to lower your insurance premium.
All Perils vs. Named Perils: A named perils policy provides protection against hazards or events, such as fire or vandalism, which are specifically listed on your policy. Named perils policies are usually less expensive, but you run the risk of getting struck by a calamity that isn't on your list. An all perils policy will cover you against everything expect perils that are specifically excluded in your policy. Check over your insurance policy to ensure that you have a adequate coverage, and consider taking safeguards, such as installing a sump pump, to prevent disasters that aren't included in your policy.
Contents Insurance: Your insurance policy will likely cover more than just your home, it will cover your possesions as well. There are two typical types of coverage that apply to the contents of your home: actual cash value or replacement cost. The actual cash value coverage will reimburse you for how much your possessions were worth when they were lost or damaged. For quickly depreciating items such as TVs or computers, you may not receive enough money from your insurance claim to actually replace the item that was lost. If you have many items that have depreciated quickly, but you would be forced to replace if disaster struck, you should consider a policy that covers the actual replacement cost of your possessions.
Loss Of Use: Make sure you understand the loss of use section of your insurance policy. It outlines the living expenses you'll receive should you be forced to leave your home because of a disaster. It often will cover your increase in cost of living while you are displaced from your home.
For more information or any questions, please don't hesitate to give me a call.