Tax and Insurance
What You Need To Know About Real Estate Tax And Homeowner Insurance
By Buyincomeproperty.com
Oct 20, 2005, 00:51

When searching for a home, the last thing you’re probably thinking of is how you’ll protect yourself against loss. But homeowner insurance is one of the most important services you’ll purchase. Consider the purpose of home insurance.

A homeowner insurance policy is the service that will protect a very large investment – probably the biggest investment you’ll ever make. Your home is important in many ways, but figuring out how to balance the amount of insurance you want with what you can afford may be a tough question. There are some things you can do to get a grip on your home insurance rates.

Start by realizing that some things are written in stone when it comes to getting homeowner insurance. The mortgage company will likely have a minimum insurance amount, usually enough to pay off the loan. The property is located a certain distance from fire and police services, and from the nearest fire hydrant. Those are things you probably can’t do anything about, but look at some of the things you can control.

You can shop around. The Internet has eliminated the “neighborhood market” when searching for home insurance coverage and other services of this kind. You can buy home owner insurance from the agent around the corner or the company across the country. The benefit for you is that you can look for the company that offers the best home insurance rates. With the instant communications available via telephone, fax and Internet, you’re also able to talk to that home insurance agent, even if you never see him in person.

Consider allowing your lender to finance your home insurance. You may find it’s much easier to make a slightly higher monthly payment than to come up with annual or semi-annual insurance payments. Your lender may also be able to offer very competitive rates.

As you’re shopping for the best home insurance rates, remember to compare apples to apples. A policy that looks like a great deal may be less expensive because that home insurance company has a higher deductible or some other term. Also keep in mind that flood insurance and earthquake insurance aren’t usually covered under a normal homeowner insurance policy. These are figured separately and may greatly impact the amount of your premiums.

Consider raising the deductibles or eliminating extra coverage if you need to get the cost of premiums down. Having awesome home insurance is good, but worthless if you can’t afford to pay the premiums.

Ask about discounts. It may be that you can move your car insurance and other policies to the same company to qualify for multi-policy discounts, or you may get better rates if you’ve never filed a claim on a home insurance policy.

The most important thing to remember is to start your search for home insurance before you make a deal for a house. You may find that the property is in an area prone to flooding, and that flood insurance is prohibitively expensive. Distance from rescue services or other factors may increase the cost of home insurance much more than you’re expecting.