Buying a home – it does not matter if it is your first or your tenth one - means that you will have to purchase homeowners insurance, so it is good to think about your insurance possibilities when you look for the perfect place to call your home. Homeowners insurance premiums are influenced by various factors and many of them lay under your control. Making a few wise decisions will grant you the coverage you need and hopefully will save you hundreds of dollars every year.
Get the facts. When you become interested in a house, collect as much information as possible to establish its potential insurance costs. The age of electrical, plumbing and other systems within the home, as well as construction materials used to build the property, can have an impact on your premiums. For example, masonry homes or less flammable roofing material can easily give you an insurance price break, typically in dry areas of the country where the risk of fire damage is high.
Know the geography. Regardless of the construction materials used, where you live can have a serious impact on your insurance premiums and coverage availability. Most likely homeowners will have to pay more for insurance in areas susceptible to severe weather and natural disasters, such as tornadoes, hurricanes, earthquakes or wildfires. According to the Insurance Information Institute, the states with the highest homeowners insurance in recent years have been Texas, Louisiana and Florida, all coastal states with serious claims for water and wind damage.
Know how much is enough. Studies carried out by construction-cost estimators reveal that more than 60% of homeowners in the US are underinsured, mostly because they do not insure their homes to “replacement value.” Replacement value is the current cost of rebuilding your home from the foundation up. Replacement value can be considerably different from market value, which stands for what a willing buyer is ready to pay for a home.