Homeowner's Insurance

sparklingdiamond

We are currently having a home built and it looks to be completed in mid-Feb.  We were told to start shopping around for homeowner's quotes.  My question is, what kind of coverage should I be looking for?  Are there certain dollar amounts that are standard or certain things that need to be covered?  I know nothing about homeowner's insurance!  TIA!

jtmh2012

First things first.....call the people you're getting your mortgage through (unless you're paying in full for this house) and get a list of their requirements.  That will give you a starting point and you can add coverage above that if you wish.

SJU1982

We reached out to our mortgage company for their requirements, and we added an additional rider for my engagement ring.

Like a car insurance policy, you will also need to pick a deductible amount.  The lower the deductible, the higher your monthly payment.  $1,000-$1,500 are pretty standard.

And definitely check out combining your various insurance policies (ie life, auto, homeowners) as many carriers offer significant discounts on bundled products.  We saved over $500/yr by doing that last year.

Congrats on the new house!

JMalettas

 I agree with the PPs, that you're going to want to check with your mortgage company to see what their requirements are. At the same time, most insurance companies will know the standard requirements across the board. 

 Another thing to keep in mind, things like having a fire extinguisher in the house, an alarm system, being non-smokers, etc, can bring your payments down as well! 

 Also, do a little 'shopping' when looking for home insurance! I got quotes from a variety of companies, all for the exact same coverage, and got different prices. I attempted to combine home & auto, but I was still able to find a cheaper quote going with a different company. 

 Good luck, & congrats on your new home!

 *J

G2SoccerTaz

Do shop around for home insurance. We finally combined our homeowners and car and it dropped our car insurance down like crazy.

 

I know one of the requirements with the mortgage company was a low deductible. They wanted us at $1000 for a deductable whereas most online quote calculators had it at $5000. Check with your mortgage company on who they normally do business with. One aspect that affects your homeowners is the value of the house. That is not what you paid for it but what it would cost to replace everything.

JoanE2012

Agree w/ PPs, definitely look into the same company as your car insurance.  We actually pay LESS each month for insurance for 2 cars and 1 home than when we just had the 2 cars.  I couldn't believe it.

BrittP10

I'm a property insurance claim adjuster. The best advice that I can give is to make sure the agent fully explains the policy. Ask about limitations on certain items ( jewelry, business items , money etc) . I also recommend going with whoever your auto insurance is through !

annies123

Testing. Sorry ladies!

short+sassy

Congrats on the new house!

Typically, your mortgager will require the home to be insured for at least the value of the loan.  My mortgager does not require any particular deductible.  I was surprised to read that some do.  In fact, I didn't consult with my mortgager at all in regards to my homeowners other than to provide them with the name and policy info for the company I would be using.

Call some local insurance brokers.  They will typically each shop different companies for you and they often shop different ones.  At least that is what I did to find my policy.  But I also have the unfortunate twist that very few companies insure in my area, so it was a pointless waste of time to search online.

I personally keep a higher deductible.  It is currently $5000, but I would have done $10,000 except it was only marginally cheaper.  If you ever file a homeowner's claim, your future insurance will go up substantially and stay that way for (I think) typically at least a decade.  It can even follow you if you move to a different house. 

Because of this, I would never file a homeowner's insurance claim unless it was basically for a catastrophe.  Like the entire house burnt down or there was some huge personal liability claim.  As such, I keep the deductible high.  But I also live in a high cost area for homeowner's, so this may not be the best strategy for others.

Also along these lines, I keep my personal property insurance under a different plan (not my homeowner's) so that if my house was robbed, I could file a claim for personal property that was NOT a claim under my homeowner's.

Another tip is don't insure the value of the land.  For example, if your total home and lot is valued at $200,000, but $50,000 of that is the land, you would only want to insure for $150,000.  Though, with that said, pretty much all insurance companies require you to insure for the replacement value, ie how much it would cost to rebuild the house. 

I've found that often the insurance companies with the best rates are the ones who estimate value at the lowest construction cost per square foot, because of this. 

Unfortunately, I live in an area that has the second highest homeowner's insurance rates in the country, and have had to learn way, way, way too much about homeowner's insurance (sigh) .

JoanE2012

short+sassy said:

Congrats on the new house!

Typically, your mortgager will require the home to be insured for at least the value of the loan.  My mortgager does not require any particular deductible.  I was surprised to read that some do.  In fact, I didn't consult with my mortgager at all in regards to my homeowners other than to provide them with the name and policy info for the company I would be using.

Call some local insurance brokers.  They will typically each shop different companies for you and they often shop different ones.  At least that is what I did to find my policy.  But I also have the unfortunate twist that very few companies insure in my area, so it was a pointless waste of time to search online.

I personally keep a higher deductible.  It is currently $5000, but I would have done $10,000 except it was only marginally cheaper.  If you ever file a homeowner's claim, your future insurance will go up substantially and stay that way for (I think) typically at least a decade.  It can even follow you if you move to a different house. 

Because of this, I would never file a homeowner's insurance claim unless it was basically for a catastrophe.  Like the entire house burnt down or there was some huge personal liability claim.  As such, I keep the deductible high.  But I also live in a high cost area for homeowner's, so this may not be the best strategy for others.

Also along these lines, I keep my personal property insurance under a different plan (not my homeowner's) so that if my house was robbed, I could file a claim for personal property that was NOT a claim under my homeowner's.

Another tip is don't insure the value of the land.  For example, if your total home and lot is valued at $200,000, but $50,000 of that is the land, you would only want to insure for $150,000.  Though, with that said, pretty much all insurance companies require you to insure for the replacement value, ie how much it would cost to rebuild the house. 

I've found that often the insurance companies with the best rates are the ones who estimate value at the lowest construction cost per square foot, because of this. 

Unfortunately, I live in an area that has the second highest homeowner's insurance rates in the country, and have had to learn way, way, way too much about homeowner's insurance (sigh) .

Ugghhh, I'm so afraid of this.  We filed our first ever claim last week.  Contractor messed up, so I'm hoping our insurance company recoups all of the money from his insurance.