home-insurance-homework-formWhen you purchase a new home, you will typically need to purchase a homeowner's insurance policy. Mortgage lenders require you to purchase home insurance as a requirement with your loan, and you'll need to maintain minimum coverage for the life of your loan. Even if you own your home free and clear, you'll want to maintain a home insurance policy. This is coverage that can be used to repair or replace your home in the event it is damaged or completely destroyed. Before you make your purchase, you should do your homework to ensure that a) you get the best deal on your coverage and b) you buy a policy that is best suited for your needs.

Understand Your Options

There are many options to consider when you purchase homeowner's insurance. For example, you may be able to choose between a 1% or a 2% deductible and to adjust the coverage limits and replacement value. You may also be able to adjust the types of events that are covered by your policy. For example, not every policy will provide you with coverage for water damage or mold growth. It is important you consider the likelihood of some of these events, the potential loss or cost you may incur from them and the cost of the insurance itself so you can determine which policy options are best for you.

home-insurance-google-searchGet Multiple Quotes

Even if you are satisfied with the first insurance quote you receive, you should consider getting multiple quotes for coverage. Different insurance companies place emphasis on different factors when reviewing your request for coverage. Everything from your own credit scores to the size, location and construction of the home will influence the cost of your coverage. However, it's important to note that not every insurance company reviews these factors in the same way. Getting multiple quotes for your coverage may help you save money. You can do research for different quotes and packages either online, or via phone calls - whichever works better for you.

Select Your Coverage Limits

When you purchase a homeowner's insurance policy, you should be aware that you will not need to insure your land. Even if your home is completely destroyed, your land will not lose value. Therefore, your coverage limits should be for the structure itself. This is not equivalent to the taxable value or the sale price you paid for the home because these do include the land value. You may need to get more insight from your real estate agent or your insurance agent to determine the approximate value of your structure versus the value of your land.

Save Money By Bundling Your Insurance

After you have determined which coverage options you want and what amount you want your coverage limits to be, you will then need to review the cost of the policies. Keep in mind some insurance companies will provide you with a discount when you bundle your coverage. For example, you may save money if you place your auto insurance and life insurance policies with the same company that holds your homeowner's insurance policy. Therefore, you should contact your current insurance companies about quotes for homeowner's insurance. However, you may also contact other insurance companies to determine if you can save money by switching your auto or life insurance policies to another company.

If you are ready to start shopping for a homeowner's insurance policy for your home purchase, keep these points in mind. These tips will help you to make a more informed decision about your coverage and get a great deal on your coverage. In addition, they will minimize the chance that you are under-insured or over-insured with your policy.

Photo credit: iPad, paperwork

What kind of things factored into your home insurance purchase? Did you use any of our tricks? Share with us in the comments below.

Posted by Chris Penny on


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