How Do I Buy Homeowners Insurance for a New House?

How Do I Buy Homeowners Insurance for a New House?

(And How Much Do I Really Need?)

When you're getting ready to buy a new house you're probably going to feel like you're signing enough paperwork to fill the Delaware. Even though it's never been proven, you're probably right! One of the most important pieces of paperwork you're going to fill out when you're getting your mortgage put together is the one for your homeowners insurance. Here's what you need to know about buying homeowners insurance the first time and how to make sure you're getting the best deal the first time, every time.

When You Sign for Your Mortgage

If you've ever taken out a loan before you know that banks are almost abnormally uptight about making sure their investments are protected by a sturdy insurance policy. Hence the number of people out there that pay almost as much for their auto insurance as they did for their car! This is good news for both of you, since a good homeowners insurance policy will make sure that you're never left with a house payment to pay and no house to live in!

Homeowners insurance claims are meant to help you cover repairs to the house that you would never be able to afford on your own, and let's face it-how diligent are you going to be about paying a bill for an asset that you're no longer in possession of? That's why when you sign your mortgage you're going to find paperwork in there requiring that your home be covered by a full homeowners insurance policy.

Many banks also work hand in hand with certain homeowners insurance companies, providing them with lead referrals in exchange for a kickback when you sign your policy. So don't be surprised if you find that in your paperwork!

Choosing an Insurer

Many lenders have a particular homeowners insurance provider they work with regularly and who provides them with certain benefits from making the sale. That company's name (along with the name of a title insurer, which should be confused with a home insurance provider) will be in with your paperwork. You are not required to work with this insurer! If you think you can get a better deal from another company don't be afraid to say "Thank you but no thank you" and take your business elsewhere.

When you're shopping around for a homeowners insurance provider there are a few things you want to look for.

1) Your homeowners insurance quote. Money isn't everything when you're talking about insurance, but the price of your premiums should definitely be considered before you sign on the dotted line.

2) What that homeowners insurance quote covers. You want to have cheap homeowners insurance, but you don't want cheap coverage. The last thing you want is to be left holding the bag for thousands of dollars in damages after your insurer has paid their share.

3) How well they work with you. You can learn a lot about a company from their customer service reps. Did the agent you spoke to when you were looking for a quote seem friendly and knowledgeable, or did you feel like you were jumping through hoops? When your home is damaged you want to know that your insurance company is going to be able to do their job, not leave you stranded to do it for them.

Choosing an Insurance Policy

How much homeowners insurance you need is a personal decision, and is going to be affected by the cost of your property, the cost of your possessions and what you feel is enough of a safety net if you're left facing a lawsuit due to accusations of neglect. (For example, if you neglected to post a sign telling your next door neighbor he wasn't allowed to sneak into your pool when you weren't at home.)

Shopping for insurance, and comparing homeowners insurance quotes, c an seem a little overwhelming the first time, but once you've got the hang of it you'll find out that it's easier than you think!

Related Articles

• How Do I Buy Homeowners Insurance for a New House? - Jul 6, 2009 - 3:54:19 PM