Shopping for homeowner’s insurance is arguably the least enjoyable part of the home-buying process, but it’s a necessary evil if you hope to close on the home of your dreams. If you want to avoid the panic and frustration of having to purchase a policy last minute, it’s best to start looking for homeowner’s insurance as soon as the seller accepts your purchase offer.
Here’s what you need to know about buying homeowner’s insurance:
Determine Insurability First
You’ll need to provide your insurance agent with an extensive amount of information about the home and property before you can receive quotes. Agents will need to know:
- When the home was built
- The home’s square footage
- The type of roof
- The age of the plumbing and electrical
- The home’s location
- The number of claims that have been filed over the last five years
Depending on the home and its location, you may have a hard time finding an insurer who will cover your home. For example, if the home is in a rural area with no nearby fire department or fire hydrant, insurance companies may refuse to insure it. In this case, you may have to find a specialty insurance company, and it may take longer to get coverage.
It’s Important to Shop Around for a Good Deal
You don’t have to choose the first insurance company that you find. If you want to get the best rate and coverage, shop around and compare premiums from different companies.
It also helps to do some research and understand the average costs to insure homes in your area. For example, knowing the average home insurance cost in Ontario will help you choose a company that’s offering a fair price and coverage.
One of the biggest mistakes you can make is underinsuring your home. Lack of coverage can be especially devastating if your home is damaged by a hurricane, earthquake, tornado, or wildfire.
Don’t assume that your coverage limits will automatically adjust to your home’s rising or falling market price.
Ask the insurance company for a personalized estimate of your home’s replacement cost, which should include construction details, its unique features, the age of the home and any costs associated with bringing the home up to new building-code requirements.
Reduce Your Risk to Save Money on Premiums
There are several things that you can do to reduce your risk and save money on your premiums, including:
- Deadbolt locks, smoke detectors, and burglar alarms can reduce premiums by 5%.
- Sprinkler systems that alert first responders can reduce premiums by 15-20%.
- Install storm shutters and hurricane-resistant siding.
- Install a code standard roof that can withstand winds of up to 130 mph.
- Impact and fire-resistant roofing materials, such as rubber, asphalt, cement, and metal, can get you an even greater discount.
- If you live in a hurricane-prone area, make sure that the frame of your home is properly bolted onto its foundation.
Homeowner’s insurance isn’t something that you should take lightly. Take the time to research your options, compare policies, and ensure that you have optimal coverage for all perils that may impact your home.