Buying a new house is a huge commitment. It’s not only a matter of money; there are numerous responsibilities that you’ll need to take on if you want to keep your new place in tiptop shape. One such responsibility pertains to investing in homeowners insurance to protect your home against theft, vandalism, or natural disasters. If this is your first time buying a house, you need to consider a few aspects before investing in your property’s insurance policy.
It’s not uncommon for unsuspecting folks to fall victim to shady insurance deals, but you’ll be relieved to know that we’ve done the work on your behalf. These are some essential things to keep in mind before investing in homeowners insurance.
The Details of the Plans You’re Considering
They say “the devil is in the details’ for a reason. At first glance, all insurance policies look more or less the same. However, when you start asking questions and looking at the fine print, you’ll see how misleading they can sometimes be. Unless you’re an expert and understand the insurance policies’ ins and outs, you should ask about every single clause they entail. Don’t take the insurance agents’ words at face value. After All, that’s how they make money, so they need to sign you up regardless of how aware you are of the terms and conditions of each insurance plan discussed. If you want to make sure you find the right insurance policy, it’s recommended to do some research yourself before you actually shop for one. Furthermore, you can consult a legal advisor to explain the obligations you’ll be taking upon yourself once you commit to a particular policy.
Compare Different Providers
Like any other product, there are hundreds of homeowners insurance policies that you can choose from. Before making up your mind, it’s wise to scan the market and learn what every insurance company is offering so you can find a plan that suits your own needs. If you live here in Canada, you will find that hundreds of insurance companies offer different policies, making things somewhat confusing. However, you can look for experienced insurance brokers who will share their professional expertise with you to help you find what you’re looking for simply and painlessly. While you’re at it, remember to browse through customers’ reviews and pay extra attention to the insurance provider’s customer service since you’ll be needing it in your time of crisis. Whether your home has flooded or caught on fire, you’ll want your insurance company’s customer representative to be as compassionate as they are proficient.
Options for Reimbursement
You need to understand how you will be reimbursed if/when something happens, and you need to make use of your homeowners insurance. Traditionally, you get to choose between the below methods:
- Cash Reimbursement: With this method, the insurance company will pay you back in cash to cover the value of your damage after deducting the appreciation. Homeowners’ insurance policies with cash reimbursement are the most affordable and, therefore, the most requested.
- Replacement Coverage: If your plan offers a replacement coverage reimbursement, your damages will be covered without appreciation deductions. However, you can only be reimbursed up to your coverage limits; whatever is exceeded, you’ll have to pay out of pocket.
- Extended Coverage: This is the most elaborate reimbursement Homeowners’ insurance plans that offer this method are the most expensive. Regardless of how much money you need to cover your damages, your insurance policy will take care of it even if you exceed your coverage limit.
Finalize Your Renovation Plans
If you plan on doing some restructuring or renovations around your new home, it’s better to finalize your plans before buying your homeowners’ insurance policy. The materials you’ll be using around the house will make a big difference in your insurance estimation. If you rely on wood and other flammable materials in your renovations, ensuring your home will be expensive given the heightened risk. Whenever you can, use ‘safer’ weather-proof materials like cement, for example. This way, you’ll be protecting your home and getting the insurance plan that you want without going over budget.
Consider the Insurance Company you’re Already Dealing with
If you have car insurance, health insurance, or any other kind of insurance plan, you can get a good discount on your homeowners’ insurance if you buy it from the same provider. Most insurance companies offer their existing customers competitive deals to encourage them to invest more in their services. As you can see, there are a few details that you have to keep in mind before investing in a homeowners insurance policy. Do your homework, and invest enough time and effort to understand your options and get the coverage you need. A good plan will give you the peace of mind that you need to live a worry-free life.