Home insurance is a requirement for most homeowners that can feel very much like an afterthought at the end of a home buying process. When a buyer has been so overwhelmed with everything from the down payment to the closing costs, the last thing they want to do is go through a complicated policy with a fine-toothed comb. However, home insurance is a serious purchase that buyers may want to understand more before they choose a particular level of coverage.
A home insurance company is going to look at the risk factors of the home before they decide how much to charge each client. They'll look at how many people are living in the home, whether it's freestanding, and the crime rates in the neighborhood. It's important for homeowners to be honest when answering questions about their home and what they plan to do with it.
For example, renting out the Saprae home will inevitably cause rates to go up because it's introducing an unknown element to the home. However, failing to provide this information may result in the insurance company denying coverage in the event of a claim. Buyers are encouraged to shop around and negotiate to get the best possible rates, but they are cautioned against buying their premium based strictly on price.
Homeowners have several options when it comes to the type of coverage they choose:
- Standard: A standard policy is limited to what's listed in the policy. If there are any events or property that fall outside the parameters of the policy, then homeowners will be financially responsible for the repairs.
- Comprehensive: This policy covers everything except named exclusions, and it's the highest level of coverage a homeowner can buy. This policy can be comforting because homeowners tend to know exactly what is and isn't covered under their policy.
- No-frills: As this name would suggest, this is the most basic level of coverage a homeowner can purchase. It's generally only given to homes that don't fit under the standard terms of home insurance, so buyers should consult with a real estate agent or insurance expert before choosing this policy.
- Broad: This option is a mix between comprehensive and standard. It essentially provides full coverage to the property itself but limited coverage to the contents within. This option can become complicated quickly, so homeowners should be prepared to ask questions before they sign.
Unexpected Vs. Predictable Events
Home insurance is meant to cover things like theft, fires, or other natural disasters. However, this does not mean that all unexpected events will be covered. Events like flooding or earthquakes may be excluded from the policy, which means that homeowners will need to purchase additional coverage against major damage.
Predictable events are not generally covered which is why homeowners need to be careful about what they do when they're in the house. For example, if large icicles form on the eaves of the roof and fall on top of the mailman, then their injuries will most likely not be covered. Finally, home buyers are encouraged to discuss and thoroughly understand the limits of their policy before making any major decisions.
Home insurance varies based on where a person lives, what company they choose, and how much they want to protect their property. Talking to a qualified real estate expert can make it easier to determine the best possible policy for each individual buyer.