When shopping for a home, there are many things to consider: number of bedrooms, bathrooms, storage space, lot size and local amenities. One important item to add to your list is a good homeowner’s insurance policy. That’s because when you are in escrow, your mortgage lender will require you to purchase a policy before the sale is final.
It is important to understand the types of coverage available to you so that you can decide the kind and amount of insurance that is right for you. It is also helpful to be aware of insurability issues.
So, what type of coverage do you need for your home? A standard homeowners policy covers the dwelling, additional structures, personal property and loss should your home become uninhabitable due to a covered loss. It also provides you with some liability coverage should someone get hurt on your property. Talk with your insurance agent about the various types of homeowners policies available along with the different coverage and the premiums associated with them. You don’t want to be surprised in the event of an emergency that the coverage you have is not what you expected.
What’s most important to know, especially for homeowners on the Texas Gulf coast, is that most insurance polices do not cover losses from certain natural disasters, but government agencies such as FEMA or specialized insurance companies offer plans that may be worth considering or may be required depending on where you live.
Today, many insurance companies offer a multiple policy discount so it may be worthwhile to have both your homeowners and auto policy with the same company.
When insuring your home, insurance companies look at “acceptability criteria” when deciding whether or not to insure a home. Typically, the criteria include the type of construction (i.e. wood, stucco, etc.), the type of roof (shingle or tile) and the use of the dwelling (owner-occupied or rented). While these criteria may vary by insurer, many companies look at common factors as well. These could include the prior claims history of the applicant or any liability issues of the home such as a swimming pool.
Depending on the age of a house or its previous loss history, an insurance company may require a home inspection before a buyer can obtain a homeowners policy. If an inspection is required, the inspector may look for evidence of prior damage such as water or structural damage.
Even though buying a home gives you a lot of headaches, understanding the types of homeowners insurance and purchasing a good policy can bring peace of mind to the process.