Any homeowner buying a home needs to consider a homeowner insurance policy to protect their investment. A policy can protect in cases of fire, flooding, vandalism and even earthquakes.
Looking for a good homeowner insurance policy does not need to be complicated. The best place to start is by shopping online.
Searching sites will take a few minutes. Be diligent and take into account all options. Read carefully all of the information. Many sites will provide an online chat with an agent for questions. Most big companies will have a toll free phone number. Get informed before purchasing any policy.
One benefit of an online search is that one can do a side by side comparison of more than one provider. They will compare prices, benefits and information regarding the policy. It is very advantageous to find a good carrier. Some people prefer to use a national company. This can be beneficial as the big companies are quick with handling any type of claim.
Looking for homeowner insurance need not be a daunting task. Being informed is the best practice so as not to get taken by a scam. There are scams on the Internet, so be prudent. Take time finding a good policy for your particular needs. If you need help with a reliable agent, contact us. We’ll be glad to offer you some names of insurance agents and insurance companies we’ve dealt with in the past which have good reputations.
In light of all the unfortunate flooding we’ve all been seeing on the news of late, you may be wondering, “What if this happened to me? How can I protect myself and my family?”
According to FloodSmart.gov (the official site of the National Flood Insurance Program), everyone is at risk of flooding. Floods can happen almost anywhere. In fact, floods are the most common natural disaster in the U.S. They can happen even if you don’t live in a high-risk area. For instance, a flood can happen during winter when temperatures rise suddenly and the frozen ground can’t absorb the melting snow.
Floods can be extremely costly. Over the last 10 years, the average flood claim has amounted to approximately $48,000. For instance, the cost of a 6-inch flood in a 1000- square foot home is about $20,000.
Who Is Required to Buy Flood Insurance?
For homeowners who live in coastal and high-risk zones, flood insurance is mandatory. The Federal Emergency Management Agency (FEMA) mandates it for any mortgage that is backed by the government.
For homes built in low to moderate-risk and undetermined risk zones, flood insurance is optional. While flood insurance is not federally required for moderate-to-low risk areas, it is still recommended. Some people choose to purchase flood insurance just for the peace of mind.
Is My Home In A Flood Zone?
Even if you are renting, it’s still wise to learn if your home is in a flood zone. You can ask your insurance company or your community floodplain manager for a Flood Insurance Rate Map (FIRM). A FIRM will generally show a community’s base flood elevations, flood zones and floodplain boundaries. Keep in mind that FIRM maps are constantly being updated due to changes in geography, construction, mitigation activities and meteorological events.
How Can You Buy a Flood Insurance Policy?
Unfortunately, standard homeowners’ insurance doesn’t cover flooding. This means homeowners have to purchase separate flooding insurance. There are two ways an owner can purchase flood insurance:
- If the property is required to have flood insurance and is financed with a federally backed mortgage (FHA, VA, Fannie Mae, Freddie Mac) then the owner can purchase insurance through the National Flood Insurance Program (NFIP).
- If the property is not in a high-risk or coastal area and having flood insurance is optional, then the owner can purchase a policy through the NFIP or with an insurance company that offers this type of insurance.
Keep in mind that regardless of where you purchase the flood insurance (NFIP or an insurance company) you will always use an insurance agent to purchase it. You can always contact the NFIP for a referral to an insurance agent.
If you have questions about flood insurance that we didn’t answer in this article, please click the comment link and ask. Your email address is never shared with anyone, nor will it be published on this website. We’d love to hear from you.
A home warranty is not much different from a warranty you might have on your car, your computer or your home entertainment center. A warranty on your home usually covers all of your home’s major mechanical systems, including hot tubs, pools, wells, septic tanks and all of your appliances. Some policies even cover the roof of your home and almost anything else you’d like to include, as long as it’s specified in the policy.
Home warranties, similar in some ways to insurance, are obtainable for most any dwelling, including mobile homes, condominiums, town houses and manufactured homes. They can be purchased by either the buyer or the seller; some sellers will include a home warranty policy to make purchasing their home more attractive. Including a home warranty with the sale is an excellent idea, especially if the home is older and the systems and appliances are aging. Since the policy can be purchased at closing, the seller doesn’t have to come up with the premium out of pocket. Further, the cost of the policy can be split between the buyer and the seller, depending on the terms of the sale.
Home warranty policies are generally effective for one year and are renewable. However, you can expect to pay a little more for coverage each year, as the items covered continue to age. This is reasonable. Policy costs vary according to the list of things covered, but an average cost would be between $350 and $500 per year. Obviously, when obtaining a policy it is important to be specific about coverage. You can expect to pay a small co-payment (or deductible) when the repair person responds to make a repair. This is an industry standard. Your payment will range from $35 to $55 per visit.
According to a Gallup poll, 79% of buyers and sellers surveyed rated home warranties as one of the most important aspects of buying a home. These policies are not like hazard insurance, which covers losses due to fires, storms and accidents; home warranties cover normal wear and tear breakdowns. A new home and its major systems are usually warranted by the builder for at least one year; thereafter, your home warranty policy coverage will take effect.
Be sure to understand the limitations and intent of your home warranty. For example, should your microwave oven catch fire and damage your kitchen cabinets, your home warranty would cover the cost of the microwave; your home owners insurance would pay to fix the cabinets.
Before buying your home warranty policy, you should shop around and find the best and most cost-effective provider. Get recommendations from your real estate agent, your mortgage company, your builder, your friends, and from the Better Business Bureau. Obviously, some companies are better and more reliable than others. Ask specific questions: Do they subcontract their work? What is their normal response time? If your freezer stops running you need someone to respond quickly.
When trying to decide whether or not you need a home warranty, the rule of thumb is: the older your home, the more you will benefit from a home warranty. Most systems and appliances covered under a home warranty can be expected to last at least 5 years. Therefore, during the early years of your new home, the home warranty policy may not be necessary. As the components of your home age, the need for a home warranty policy becomes more critical. It is obviously more attractive to pay $400 or $500 in policy premiums than shell out several thousand dollars for a new furnace or even several hundred to a thousand or more for a new refrigerator. The policy will easily pay for itself if a major home system has to be repaired or even one major appliance has to be replaced.
If you’re the owner of rental property, you should definitely consider a home warranty policy. Unlike the appliances and systems in your own home, you have little, if any, control over the frequency and manner in which these things are used by your tenants. Odds are you will have to replace or repair items and systems more frequently in your rental property than in your own home. As a landlord, your home warranty policy may very well save you money, but just as importantly, it can buy you peace of mind.
Investing in real estate can be a risky business, but one thing that will help you minimize your risk is making sure you have the right insurance. Here are some different types of insurance you should consider if investing in any type of real estate:
Title Insurance
Title insurance wіll hеƖр cover you уοu іn thе unlikely event of a title dispute. Thіѕ could come from a past owner’s delinquent taxes, liens thаt wеrе placed οn thе property, οr fake signatures when transferring title. Title insurance wіll help іf thеrе аrе tenure problems thаt саn οnƖу bе resolved іn court. Title insurance is a onetime cost, usually аt closing, bυt offers уου coverage аѕ long аѕ уου οwn thе property.
Landlord Insurance
Landlord insurance will cover уουr investment іf уου hаνе tenants thаt wіll bе renting уουr property. Landlord policies аrе somewhat identical tο homeowners insurance. Mοѕt forms οf landlord insurance covers уοu if someone is injured on your property while renting from you. Thе one thing mοѕt landlord policies do not cover іѕ contents οf thе home. Yουr tenants ѕhοuld buy their own renter’s insurance; thіѕ wіll give thеm thе coverage thеу need fοr thеіr contents. Thеrе аrе many riders уου саn get that act as a supplement tο уουr landlord policy. Thеѕе ѕhοuld bе discussed wіth уουr insurance representative οr attorney tο mаkе certain уου hаνе thе rіght coverage.
Builders Risk οr Construction Insurance
Construction insurance will give thе coverage уου need tο cover thе structure аѕ іt іѕ built, along with any appliances or other items yου mау hаνе already bουɡht. Yουr construction insurance mау even cover уουr appliances and such іf thеу аrе stored somewhere οthеr thаn the property that is under construction or іf thеу аrе damaged іn transit. Construction insurance generally protects уουr investment frοm fire, theft, аnԁ сеrtаіn disasters. Thіѕ coverage usually hаѕ a time limit οf one year οr whеn thе construction іѕ complete, whichever comes first.
Vacant Homeowner’s Insurance
Dіԁ уου know уουr homeowner’s insurancce mау nοt cover уουr home іf іt іѕ empty fοr more thаn thirty days? If a home уου οwn wіll bе empty fοr more thаn thirty days, уου mау need a specialized policy. Thеѕе empty home insurance policies mау bе аѕ elementary аѕ adding a supplement tο уουr policy οr уου mау hаνе tο hunt fοr an insurance company thаt offers thіѕ form οf insurance. Thіѕ insurance саn infrequently bе tough tο gеt bесаυѕе insurance companies see empty houses аѕ a risk–ѕіnсе nο one іѕ thеrе, giving іt an increased possibility οf being vandalized. Thеѕе policies typically hаνе a tenure οf 3 months tο one year аnԁ саn bе a bit more pricey, bυt good value for thе money, considering you’re not actually there to look after things.
All of these types of insurance are, of course, in addition to normal homeowner’s insurance that everyone should have on their home.
Everyone knows a property owner needs an insurance policy, but many renters overlook the fact that they, too, need coverage.
Some think that because the landlord has an umbrella policy, they don’t need additional coverage. Then there are college students who believe their parents’ homeowners insurance covers their apartment.
People somehow don’t think about renters insurance because their home is not a house that they own. They forget that while they may not own the building, they own the contents, and replacing them could be a major expense. Misconceptions about renters insurance can prove expensive when the unexpected happens. A lot of the people in the recent tornadoes didn’t have renters insurance and lost everything.
The number of renters is growing nationwide — it’s up more than 10% between 2004 and 2009, according to Traveler’s Insurance — and in today’s economy, many of them might not be on the lookout for one more bill to add to their budgets. But this is one they can’t afford to ignore, so forget the myths and go for the facts.
Not Buying Insurance for All the Wrong Reasons
In a recent survey by MetLife of people who didn’t have renters insurance, 33% of respondents said they thought renters insurance was too expensive. Not sure where they were looking, or if they were just guessing. But, at $125 to $200 a year for a policy covering up to $25,000 of contents and $300,000 in liability protection, there’s no need to crack your piggy bank, you could spend that much on a couple of nights out on the town.
Nearly one-fourth of folks surveyed said they thought they were covered by the landlord’s policy. Wrong again.
The building is protected, but not your stuff. Furthermore, don’t assume that if your roommate has a policy, that you’re covered too.
Some 20% thought their personal property wasn’t valuable enough to warrant insurance. Do the math. If you had to replace your entire wardrobe, furniture and more — not to mention the cost temporarily moving somewhere else — could you afford to? The costs add up. In fact, insurers say the average person has $20,000 in possessions.
What’s Covered, What’s Not
What’s important is to know what’s covered by your policy and what isn’t. Generally, a basic policy will cover clothing, furniture, computers, electronics and such. You can also get liability protection to protect you if someone is injured in your home.
For items like antiques, expensive jewelry, firearms or special equipment, a separate rider might be necessary. Furthermore, some insurers offer renters policies that cover you for a range of other issues: losses from credit card and check forgery; additional living expenses if you need to stay in a hotel after an incident, and the meals you have to eat out since you can’t cook, among others.
While the circumstances under which you’re covered varies, some examples include fire, lightning, windstorm or hail, freezing of plumbing system, ice, snow or sleet damage, and theft.
Be clear about what’s not covered. For example, jewelry damaged in a fire would likely be covered, but if you simply lost your jewelry, it wouldn’t.
Again, policies vary, but generally, causes of loss that are not covered are intentional loss, pollution, lead exposure, flood, earthquake, and neglect.