First time homebuyers typically spend weeks carefully analyzing home inspectors, comparing mortgage rates, and researching neighborhoods and school systems. This due diligence, however, oftentimes is not applied when shopping for homeowners insurance. Jumping in too fast can be costly in the long run.
As independent insurance agents in CT that work with first time homebuyers regularly, we often see important factors overlooked during the homeowners insurance buying process. Here are some of the most valuable lessons we wish every new homeowner understood before closing day.
The Cheapest Policy Isn’t Always the Best Policy
Buying a home comes with a wide range of initial and long-term expenses, particularly these days. When it comes to shopping for homeowners insurance, it’s natural to look solely for the lowest price. This strategy, however, can lead to issues down the line. Cheaper plans usually have a catch including higher out-of-pocket deductibles or coverage limitations.
Independent insurance agents in CT know that taking the time to understand the specific coverage needs of the property can help avoid gaps in coverage that could be very costly in the event of a claim. Your independent insurance agent can help here. Because they represent multiple insurance carriers, independent agents can compare policies side by side and explain the differences in coverage, deductibles, endorsements, and pricing.
Your Home Is Probably Worth More to Rebuild Than You Think
One of the biggest first-time homebuyer misconceptions is that homeowners insurance will match the purchase price of the home. This is not always the case. Sale price includes factors like the land the home sits on, the neighborhood, school district, and local real estate market. Rebuilding costs, on the other hand, are based on construction materials, labor, permits, and the cost of replacing your home’s structure from the ground up.
Building materials and skilled labor costs have increased in recent years. If the homeowners insurance policy doesn’t provide the appropriate replacement coverage in the event of a fire or severe storm, homeowners can be out of pocket for a significant amount. Independent insurance agents in CT can help determine accurate replacement costs. They do so by evaluating the size of the home, the systems and finishes, construction type, current building costs, and more.
Standard Homeowners Insurance Doesn’t Cover Everything
Many first-time homebuyers are not aware of the limitations of standard homeowners insurance policies. Typical policies cover the structure, personal belongings, liability, and additional living expenses in the event of an issue.
What does homeowners insurance not cover? A standard policy is unlikely to protect against flooding, sewer backups and normal wear and tear. These issues often require separate coverage. In addition, expensive jewelry, collectibles, firearms, or home-based businesses may not be fully covered under a standard policy. Independent insurance agents in CT will take the time to understand your specific needs and can recommend additional protection where it makes sense.
Bundling Homeowners & Auto Insurance Can Save More Than Just Money
Homeowners today are typically aware of the fact that you can reduce your premiums by purchasing auto and homeowners insurance together with the same insurance carrier. The same goes for additional coverage such as boat or motor home insurance. Many, however, are unaware of the additional benefits that go along with bundling.
When all insurance products are bundled under one carrier, policy management is made simpler, renewals are easier, and homeowners will have a single point of contact for questions, advice and/or policy revisions.
Your Liability Coverage May Not Be Enough
Liability coverage provides financial protection if someone is injured while on property or if the homeowner is responsible for damaging someone else’s property. Visitors, or even a delivery driver, can slip and fall, or a pet can injure someone. Inadequate liability coverage can put homeowners on the line for expensive medical bills, legal fees, and other costs.
Independent insurance agents in CT will often recommend reviewing liability limits with an agent as part of the home buying process. Additional protection is often recommended in the form of an umbrella insurance policy. The umbrella provides additional liability coverage beyond the standard policy limits.
Look to Independent Insurance Agents in CT To Be Your Guide
Buying a first home is one of life’s biggest milestones. Choosing the right homeowners insurance should be just as important as choosing a mortgage company or security system supplier. Working with independent insurance agents in CT gives first time buyers access to a trusted resource during a stressful and complicated time. Working with the right insurance agency gives homeowners confidence that they have the right coverage in place at a competitive price.