Insuring your home seems like an easy task, but there’s more to consider than you might think.
For example, most people only look at the cost of homeowners insurance to see if it’s affordable.
Or they rely on their realtor’s opinion about what type of insurance they should have, or even whether or not their state requires homeowners insurance at all.
In reality, though, there are several other things you should consider before purchasing and/or renewing your homeowners insurance policy. Let’s take a closer look at five of them here.
5 Things to Consider Before Insuring Your Home
1) The value of your home
An insurance agent will want to know the approximate value of your home so they can calculate what kind of coverage you will need and how much that coverage will cost.
How old is your roof?
If you have a newer roof, it might not cost as much as if it’s an older roof. What is the condition of your appliances?
The better the condition, the lower the rate for insurance on them.
Does your house contain any lead-based paint? Lead-based paint is dangerous to adults, children and pets.
Is there any property on the property that needs coverage too like sheds or cars? If these items are insured under the same policy, this could save you money in premiums.
2) The age of your home
The age of your home is an important consideration when buying insurance because the older your home, the more likely it is to have a claim.
The older your home, the more likely you are going to need repairs or renovations.
You may want to increase your insurance coverage for those instances where a claim may be inevitable.
In addition, the age of your home can make a difference in how much you pay for premiums.
A 20-year-old home might cost you $1,000 less per year than a 30-year-old house.
Insurance companies take this into account and charge accordingly. The square footage of your property:
A major factor in determining how much homeowners insurance will cost is the size of your property.
If there’s nothing protecting other structures on the lot besides your house, then you’re going to pay less because there’s little chance that something could happen to them too.
3) The type of home you have
The type of home you have will determine how much coverage you need.
If you live in a high-rise apartment building, then the security and maintenance of the building will be the responsibility of the management company, so you won’t need to worry about it.
On the other hand, if you live in a single family home or condo, then securing your property is your responsibility.
You’ll want your insurance policy to cover damages that may occur from fire, natural disasters or vandalism.
Keep in mind that insuring your property is costly.
For example, $500,000 for homeowner’s insurance typically costs about $300 per year for a 30-year fixed mortgage with 10% down payment on an average priced home ($190 per month).
That price can vary depending on factors such as where you live, what type of house you have, the condition of your home, and other considerations.
Consider whether or not there are any nearby fault lines which could trigger earthquakes.
Is the exterior trim around your windows and doors in good shape?
4) The location of your home
It is important to consider where your home is located.
For example, if you live in a flood prone area, then you might want to get flood insurance. If your home is near a volcano, then you might want volcano insurance.
The point here is that if the event of a natural disaster occurs near your home, you are likely going to need special insurance coverage because the average homeowner’s policy will not cover those damages.
A property’s value: What is the total worth of your house?
Do you have any improvements on the property such as additions or upgrades?
If so, this can add to its value and make it more expensive to insure.
Be sure to take this into account when considering your homeowners insurance rates.
5) Coverage limits:
How much coverage do you want for each type of peril? You should check with your agent about how much coverage they offer for each type of peril.
You should also find out how large or old your home is before deciding what type of insurance policy is best for you.
6) Your personal belongings
The first thing you should think about when insuring your home is your belongings. If you don’t have a homeowner’s insurance policy, it’s important that you purchase one.
Some policies will cover any damage caused by fire or theft, while others are more general and may not cover as much.
Make sure you know what each policy covers before deciding on a plan.
You can also check with your local agent to see if they offer all risks coverage. All risks insurance provides coverage for everything in the house except liability
(i.e., injuries or damages done by guests) and loss of income, which means no matter what happens, you’re covered.
In most cases this type of insurance costs less than other types of homeowners’ insurance because you’re paying just for the things your policy doesn’t cover.
There are many different factors to consider when buying homeowner’s insurance so be sure to do some research before making a decision.
Be careful not to rely solely on an agent who isn’t licensed and approved in your state