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February 15, 2022

9 Homeowners Insurance Tips for Buying a Home

If you’ve been saving up for a long time, studying different neighborhoods, checking school rankings, mapping possible routes to work and attending dozens of open houses, you’re probably about ready to make an offer, aren’t you?

But even before moving on to securing financing or signing any paperwork, you can’t forget the importance of purchasing good home insurance. This step is essential in achieving your dream, for both the necessary support you will need and to calculate monthly costs. So here are some tips you should consider when purchasing Homeowners Insurance for your new property:

1. Get educated

Homeowners insurance is normally required by mortgage lenders when you are going to buy a home, as they want to protect the investment from any surprise events.

That is why it is so important we emphasize the need to educate yourself in order to make an informed decision. You can take a homeowners course such as the ones offered by Credit Smart by Freddie Mac. This type of course allows you to familiarize yourself with financial terminology and the different conditions that may apply to your mortgage. Once equipped with knowledge, you will be much more confident to make these important decisions.

2. Be cautious with your “insurance score”

The same way that your credit score can affect your entire financial and practical life in the US, your insurance score can have a significant impact on your policy premium value and even your assessment as a potential customer with insurers.

Problems such as credit card debt, defaulting on other debts, tax liens, or filing for bankruptcy will lower your insurance score, making you a high-risk customer. This way, they’ll limit your options and increase your premium.

3. Consider the type of property

Regardless of whether the purpose of the house is to live in or rent out, a complete insurance quote can help you narrow down your options.

For example, Apartment Insurance will be most appropriate if you are going to invest in an apartment, which means you will not need to pay for unnecessary coverage, although you will need to consider Landlord Insurance if you plan to rent out the property.

There are online simulation calculators that can help with initial quotes. However, for an accurate quote, your best bet is to contact a BRZ agent, who will consider all your variables and specifics.

Less common scenarios, such as a multi-family property, where you will be both a resident and a landlord, or where ground floor commercial space, will require special attention so that you have all of your bases covered, from home coverage to personal liability.

Generally speaking, insurance companies consider owner-occupied properties a lower risk, as the owner is more likely to maintain the property more adequately than a tenant.

4. Carry out a thorough assessment of your future new home

Older properties are more likely to need repairs and maintenance for a variety of issues, which means your premium will be higher.

If you are looking for an investment property where the renovation will bring you profits, consider the upgrades you will be facing. Structural problems, such as a cracked foundation or an old roof, will require significant financial investments, so be sure to calculate well before any decisions.

Your homeowners insurance quote will take into account the condition of your property, so update your insurance agent with any and all changes to your property to ensure you remain adequately protected, thus avoiding unpleasant “surprises,” in the event that you need to trigger the insurance.

5. Prepare yourself for any renovation

If you are planning structural renovations for your new home that will require you to leave your home vacant for a while after purchase, speak with your insurance agent to confirm that your policy will cover this period.

Certain policies will only cover you if the insurance company is notified of your absence in advance. In other cases, you may have to pay a higher premium during the period or even contract a policy change to ensure the protection of the property while it is under construction.

6. Do your research with your future neighbors

If you’re interested in specific neighborhoods, it’s always good to take a few days to get to know the region and talk to other residents. That way you can find out if you are in a flood zone, how close the fire department is or how long the police tend to arrive in case of an emergency.

Different types of risks are important criteria in determining your insurance rates. Factors such as public safety directly impact the value of your premium and the risks of natural disasters may force you to take out specific coverage, which may not be part of the standard home insurance policy.

In addition to geographic risks, the zip code of your new home can also affect your premium in other ways: an area that is known to have a higher crime rate will have higher premiums, while a residence in a gated community will mean higher premiums.

Regardless of the specifics of your new neighborhood, installing a home security system can earn you discounts on insurance, as well as reducing your own risks.

7. Give your agent as much information as possible

Your relationship with your insurance agent must be one of complete honesty. Any omitted information may result in a claim being denied in the future or even the cancellation of the policy.

Keep your insurance agent informed about any equipment you own or plan to buy, from an electric bike to a pogo stick.

The consequences of failing to register these items can have even more serious repercussions, such as affecting your insurance score and preventing you from getting a new contract with another insurer.

8. Don’t forget your pet

Be sure to provide all the information about who will be living in your home, from your family members, friends, and even your family’s pets.

Certain dog breeds, such as Pit Bulls, German Shepherds, Rottweilers, and other infamously aggressive dogs, may not be covered by all insurance companies or at least be liable for slightly higher premiums. As in some cases, the damages will lead the insurer to cover legal and medical costs associated with unfortunate incidents such as bites or other damage caused by attacks on other people.

Another possibility is to charge courses for the owner and training for the dogs.

9. The golden rule for swimming pools

This one deserves to be highlighted. If you’re considering a property with a pool, take a moment to consider how this will affect your home’s insurance premium value.

Pools are typically considered “other structures” and most insurance providers will increase liability coverage to protect you in case someone is injured while using the pool.

Keep in mind that swimming pools can pose a risk to children in particular, whether they are yours or your neighbor’s, who could be drawn into your backyard to explore the pool even if you are not at home. Pools also pose a risk to the pets on the block.

The most effective way to prevent tragedies like accidental drowning is to install a fence around the pool.

Speak with BRZ!

Our team at BRZ is here to help you find the Homeowners Insurance that perfectly fits your needs, your budget, and your lifestyle. Get the peace and tranquility you deserve and keep your American dream alive with BRZ!