What To Know About Home Insurance Before You Buy
If you’re a first-time homebuyer, purchasing home insurance coverage can be the least exciting part of the process. However, it’s a very important part of the purchasing process that should be paid detailed attention to. With a few tips in your toolbox, you’ll be confident in finding the best protection at the best price!
What Is Home Insurance?
Home insurance protects your home from certain “perils” like vandalism, storm damage, etc. The protection details will depend on the types of coverage you purchase.
Home insurance does not cover appliances. When your furnace or washing machine breaks at the worst time, home insurance will not cover those incidents. You can, however, purchase a home warranty that will protect those larger appliances. These policies typically are not sold by the same companies that sell home insurance.
Additionally, it’s important to note that you may have to pay private mortgage insurance depending on your loan type. Private mortgage insurance is a fee paid by some borrowers who pay less than 20% down at closing. This fee is not to be confused with home insurance.
When Do I Need To Purchase Home Insurance?
You must have selected your coverage and provide proof of your policy before closing. When purchasing your coverage, you will set your effective date as your closing date. The company will provide a detailed outline of your coverage and confirm the date the policy goes into effect, which you will need to provide to your loan officer. You cannot close your loan without providing proof of home insurance.
How Much Coverage Do I Need and How Can I Save Money?
A typical home insurance policy will cover your home, surrounding structures on the property, property inside of the home, and personal liability in case someone is injured on your property. You may be required to purchase additional insurance under special circumstances. For example, if your home is on a flood plain, you must purchase additional coverage for that.
Much like Imagine Home Lending goes above and beyond for our clients by building connections, getting to know your specific needs, and finding the best mortgage product and rate for your circumstances, local insurance experts can help save you money on your policy. Your loan officer will be able to recommend a great local agent who can help you choose your policy and find you a great deal! If you currently work with a financial advisor, they will likely be able to provide you with recommendations for a local insurance agent as well.
If you prefer to purchase online, make sure to shop around to compare rates. Many companies offer lower rates when you purchase home insurance through the same company that handles your auto insurance through bundling incentives. If you have questions about your coverage, ask questions!
Have more questions about home insurance? Connect with us on socials or send us an email today! Your local loan officer’s contact information is on the “Meet The Team” page.
Happy House hunting!