Many who have purchased a home through a mortgage financing have likely heard the term Homeowner’s Insurance. However, many still fail to understand their coverages and how crucial it is to choose the right insurance company.

So you found the perfect home, your offer was accepted, and everything seems to be going smoothly. Then your lender tells you that you need to look for homeowner’s insurance and informs you that this is a requirement for them to be able to close and finalize the purchase of your new home.What do you do and where do you begin?

Let’s face it; sometimes the most critical subjects tend to be the most mundane and sometimes tedious matters to learn about and research. To help you with this task we contacted State Farm Insurance agent J. William Quigly, CLU and Team to give us some tips to help you ease the search for a homeowners insurance company and the right insurance coverage for your needs.

What Is Homeowner’s Insurance?

Homeowner’s insurance is a policy that can protect your home against damages that occur to the house itself and the belongings inside. Homeowner’s insurance can also protect your possessions, you and your family.

Why Do I Need Homeowner’s Insurance?

Mortgage Lenders Require It

If you are financing a home with a mortgage, your lender will require for you to have homeowner’s insurance to make sure their investment is protected from loss or damages. Your lender can also add your homeowner’s insurance payments to your monthly mortgage payments to ensure you are always covered.

It Protects Your Home!

Most homeowner’s insurance protects against any potential loss to the structure of your home or any unattached structures on your property from natural hazards such as wind damage, fire, vandalism, tornadoes, hurricanes, and thunderstorms. Your insurance policy will step in to help pay for repairs or replacements, so you don’t have to pay out of pocket.
Agent J. Williams Quigley also suggests to make sure your insurance company rebuilds your roof and home at replacement cost and NOT actual cash value based on the age of your home or roof. Insurance policies that pay out on replacement or cost basis are more financially beneficial than receiving a cash value for the damages, so keep that in mind when deciding on a coverage plan.

It Protects Your Personal Belongings!

Many home insurance policies also cover your belongings. Say your possessions were stolen or destroyed by a covered hazard, your home insurance could reimburse you for the value of those items such as furniture, electronics, appliances, clothing, and more. The policy typically can also protect your possessions anywhere in the world whether it’s at your place, in your car, or storage.

It Protects Your Liability!

Homeowner’s insurance policies as a standard will also provide family liability insurance. Family liability coverage is design to protect you in the event of a lawsuit arising from an injury on your property. Liability coverage offers a wide range of coverages, and it can extend to accidents away from home where it will cover legal and medical fees and even lost wages if the injured person is out of work.

How Do You Decide on The Coverage You Need?

Although this may vary from home to home, there are specific guidelines you can follow when comparing insurance coverages and policies.

Know Your Replacement Cost!

The replacement cost of your home is not what you paid for or the current market value of your property. Your replacement cost is the cost to rebuild your home from the ground up. Replacement costs will be influenced by the supply of labor and the costs of construction materials. This is why it’s important to revisit your home insurance policy annually, to ensure your coverages are up-to-date with inflation rates or any upgrades or remodels you have made to your home.

To get an estimate of your replacement cost, you can ask your home appraiser if they can provide a replacement cost estimate, you can also consult with a reputable local builder or have your homeowner’s insurance agent help you with this process. (For more on replacement costs click here)

Consider Your Location!

Your location can also be a determining factor on the amount of coverage you may need and the rates you could be facing if your home is in a geographical area that is vulnerable to natural disasters like floods, wildfires or earthquakes, tornados. Other factors that could also affect insurance premiums include crime rates and general building costs in the area.

Be Honest With Your Insurance Company

Disclosing all your possessions and the value of them is critical to determine the amount of coverage you will need, as well as any plans to either expand your home or do any upgrades.

How To Select The Right Insurance Company?

We asked State Farm Insurance Agent J. William Quigley, what are some key factors that make an excellent, reliable insurance company, this is what he had to say…

Knowledge and Experience are Essential!

J. William Quigley;  everyone’s situation will vary, so it’s important to choose a company that is knowledgable, can answer all your questions and can guide you to select the right coverages for your unique needs.

Financial Strength

A reliable company will be financially secure to support their wide base of customers in case of a massive catastrophe!

Process Claim

During a claim, you want to make sure the Agency will help you with the claim process! So understanding their process claim and making sure you feel comfortable with it is essential. After all, during a claim is when you need your insurance agency the most!

Availability!

You want to choose an insurance agent who answers the phone!

J. William Quigley also talked about a few things everyone should be cautious of when choosing their insurance company.

Coverages and Policy Limitations!

When comparing quotes side by side, the coverage limits may look the same, but the coverage Limitations are written in the policy booklet showing you the exclusions. Make sure to review these exclusions thoroughly with your agent.

First Time Discounts

Many companies will give you discounts for your first year being insured with them; then, after the first year, the discounts will be removed, and your rate will drastically increase.

For most people their home is their biggest or one of their biggest investments, so make sure your home is adequately covered! Be informed before agreeing to your policy!

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