As you prepare for your real estate purchase, there are a few things that I recommend you keep in mind when shopping for homeowner's insurance. They are as follows:
1. Remember you're a statistic.
To an insurer, you're not a person; you're a set of risks. An insurer bases its premium (or its decision to insure you at all) on your "risk factors," including your occupation, who you are, what you own, how you live, and now most importantly... you credit history.
2. Know your home's value.
Before you choose a policy, it is essential to establish your home's replacement cost. This is the amount that if would take to rebuild your home on your existing land. A local builder can provide the best estimate.
3. Insurers differ.
As with anything else you buy, what seems to be the same product can be priced differently by different companies. You can save money by comparison shopping.
4. Don't just look at price.
A low price is no bargain if an insurer takes forever to service your claim. Sometimes we have to remember that we get what we pay for. Research the insurer's record for claims service, as well as its financial stability. This is very important, especially when choosing a smaller, unknown company. Remember, you can always ask your real estate agent for recommendations.
5. Go beyond the basics.
A basic homeowners policy may not promise to entirely replace your home and/or personal property. Ask your insurance agent about adding riders to cover additional property if you need it. The additional cost should be nominal and would be used to cover items such as expensive jewelry, art, furs, etc.
6. Demand discounts. Insurers provide discounts to reward behavior that reduces risk. They also offer multi-policy discounts that reward you for having more than one type of policy with them. Ask for it because they don't all volunteer that discount. I once ready that Americans waste about $300 billion in discounts because they don't ask for them.
7. At claims time, remembre your insurer isn't necessarily your friend.
Your idea of fair compensation may not match that of your insurer. Your insurer's job is to restore you financially. Your job is to prove your losses so you get what you need.
8. Prepare before you have to file a claim.
Keep your policy updated, and reread it before you file a claim so there are no surprises.
I hope you find these tips helpful!
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