First-time home buyers generally find the task of purchasing property to be quite exhausting. Going to open houses, applying for mortgages, preparing the move and so much more. Once an offer is accepted the pressure is on.
One of the most overlooked tasks is taking the time to find and prepare your homeowners insurance ahead of schedule. Since this is also a complex product and takes some time to understand, it’s a great practice to get a head start. Here are some tips below and a short process that can be useful for the first-time homeowner.
How should a first-time home buyer approach finding home insurance?
Homeowners insurance isn’t usually that difficult but finding a well-rounded insurance agent that knows the ins/outs of the local market and has solid means of experience can be. It’s beneficial for the first-time homebuyer to start by seeking out review sites like google, yelp, and find a few solid agencies that specialize in homeowners and property insurance. Look out for quality, highly rated, and unbiased reviews, that don’t vastly consist of simply “My agent got me the cheapest car insurance rate ever!” Track down a few agents, and get in touch.
A first-time homebuyer would want to make contact with a few different agencies, and let them know that you have an accepted offer on a home and you’re needing to get an insurance policy for the first time. Typically good agents will ask plenty of questions about property characteristics, personal details, prior history, or other lines of insurance and will start putting together quotes. At this point, it’s good to ask questions like an interview; How long have you been writing homeowners? What carriers do you represent? Are you familiar with the area? —Working with an agent vastly helps the first-time home buyer as they can make recommendations on the approximate coverage limits, the carrier’s competitiveness in the market, and what carriers might provide a better claim experience. Moreover, your agent will be an immediate point of contact that can also answer all of your questions as escrow proceeds. Finding a genuine agent that you connect well with, takes care of most of the work if you’d like it to.
Of course, there are also the options of purchasing homeowners insurance online, which may be a good option for some but, is a cumbersome task that most would rather leave to a professional whose already familiar with it.
The best possible outcome would be, that you find a knowledgeable agent that you work well with and understands the local area from experience, as this vastly will outweigh another agent or quote that costs less if there is one. This brings us to the next point.
What are some common pitfalls to avoid?
- Choosing an insurance policy because it’s the lowest price. —Almost every time, this one tends to turn out bad. Anyone who has experienced a property loss or claim has never said, “I have too much coverage.” Make sure to thoroughly ask questions, possibly do your own research where needed, and compare options and recommendations.
- Purchasing insurance last minute just to close escrow. —This typically always causes a lot of unanswered questions about something that’s going to be extremely important down the road. Take time early on to work with agents, compare and listen and learn.
- Being diligent in finding obscure property details if requested. —Not all homes are brand new, and a lot of questions asked by insurance agents have to do with the age of a dwelling’s components like the roof, plumbing, heating, and electrical sources. Providing airy answers to get things done not only is inaccurate but, can lead to premium changes or result in cancellation at a later point.
- Find out if your homeowner’s carrier offers other lines of coverage. — At a later point, it’s possible you’ll want to add auto, umbrella, earthquake, landlord, or other types of insurance. Knowing that this can be done at a later point sets you up for the future.
What should a first-time home buyer look for in a home insurance policy?
There should be no differences in a homeowners policy for a first-time homebuyer or veteran, but, the main components that should be sought out are:
- Solid Claim Reputation — Above all, insurance is a product to transfer the risk of financial loss so its core component should be the peace of mind. Having done the comparisons with your agent and researching the carrier’s reputation, you’ll know if you’re in a good place.
- Manageable Coverage Limits — Always good to double-check this one, but, checking your limits and knowing what you have in place. The last thing you’d want to do is find out at a later point that you have a higher deductible for water losses than usual.
- Possible Future Discounts — Whether the time was spent figuring this out with your agent ahead of time, you want to know what other discounts are available. This could be a multi-policy discount, longevity, loyalty, or occupational discount.
- Time In The Market — Knowing that your carrier has been around, and withstood the test of time will give you certainty if something should arise, they will be there to help you out.
Reach out to a first-time home buyers specialist today.