5 Common Questions From First-Time Home Buyers Answered
Purchasing your first home is exciting, but can also be a bit daunting. There are so many things to consider, including your home insurance policy. Here are the five questions that TJ and Zak, two of our agents, are most often asked.
Q: What kinds of things should I be taking into consideration that can add to insurance costs?
When you are shopping for homes, consider the risk each home has. Is the house in the country or the city? Does it have a swimming pool or pond? How is it heated?
Things like this can influence your insurance cost. You may have to pay for extra insurance coverage, depending on what is in your house or what is nearby.
Be sure to get a home inspection before you decide to make the purchase. That will help identify any risks, as well as prevent unwelcome repair surprises when you move in.
Q: What do I need to know about having insurance on my closing day?
Insurance costs are often forgotten when purchasing a home. Many new homebuyers aren’t aware that insurance companies often require a two-month down payment before closing, in order to receive coverage. That’s if you opt to pay monthly. You can also pay your insurance up front for the year, but bear in mind that it could be anywhere from $500 up, depending on the house. Budget for these costs, so you are not left scrambling on closing day.
Q: Why do people tell me I could regret going with just bare-bones coverage?
As a first-time buyer, money is usually tight and you hope to save some wherever you can. Insurance is one of the places you might consider, but it’s important not to skimp on coverage. A standard home policy typically protects you form a long list of risks from liability, from fire to weather-related damage. However, you may need to adjust what things are covered for you in order to meet your needs.
It is important to pay careful attention the amount of dwelling coverage. This part of your policy covers the actual structure of your home. Ensure that you have enough dwelling coverage to rebuild the house completely, in case the house is completely destroyed by a covered peril. The cost to rebuild is often different from your purchase price. Make sure your agent explains how they calculated this amount and that it is sufficient protection for you.
Q: Are there ways for me to save money on insurance?
Yes. When you purchase your home insurance, consider buying your auto insurance at the same time. Dumfries offers both home and auto insurance policies. You can save an extra 10% on both your home and auto policies by bundling them together. Do you have multiple vehicles? Save even more by adding an extra car to the policy.
Q: How can I be sure I understand what all the insurance terms mean?
Buying home insurance can be a confusing task for first-time homebuyers. Terms such as deductible, liability, actual cash value and replacement cost can be misinterpreted. Just ask your agent any and all questions that you have; that’s what he or she is there for!
Still have some more questions?
One of our friendly agents would be happy to speak with you regarding your exciting first home purchase, or if you’re ready, you can start the quoting process.