The best deal is not always the least expensive deal when purchasing a homeowner’s policy for your new home. There are many factors to consider when buying insurance, and your home’s size, the cost to rebuild it, the materials from which it is built, and where it is located are all factors in its cost and the cost to replace it in the event of a catastrophe. You get what you pay for, and you have several options when purchasing homeowner’s insurance Iowa.
Not only for your protection, lenders require that you have at least have basic homeowner’s insurance in Iowa when you close on your new home. They want to know that if you have a fire the day you move in that their investment is covered, too. If you happen to live in a flood zone, your insurance policy will need to add flood coverage, and it will cost you considerably more than a home where it is not required.
Do You Have Quotes From Several Providers?
Just like the rate on your mortgage, you will find different rates from different insurance agencies. They will need to know the location of the property, the size of the home and its features. You need to ask what their basic policy covers and then add any items that you want above what’s basic. Insurance for the contents of your home and flood, wind and liability insurance limits may need to be added as separate ‘riders’ and may cost you more. Determine what the basic policy price of several providers is and then look at what each one offers, at what price.
Do You Have the Right Policy?
There are two types of insurance in most markets, and they affect homeowner’s insurance in Iowa and how they pay if you have a loss due to fire, weather, flooding due to broken water pipes or other home catastrophes. Both of these types of policies are available to Iowa homeowners.
- A cash-value policy will cover your home and its contents at market value. Less expensive than a replacement-cost policy, it may not cover your losses, especially if you have an older home with intricate woodwork or a home that has a more expensive square foot than is common for the area in which you live.
- A replacement-cost policy will cost you about ten percent more than a cash-value policy; however, it will cover the cost of rebuilding if you have a loss.
Do You Need a Low Deductible?
Your policy’s deductible is the amount you will need to pay out of pocket before insurance kicks in, and the lower your deductible, the higher your insurance premium. You can lower the annual cost of your homeowner’s insurance by up to 25 percent if you increase your policies deductible to $1,000. Before you make this decision, determine if your budget can take a $1,000 hit. If not, lower it, and if you can increase it, do so because your policy will cost you less per year.
Are There Ways to Lower the Annual Rate?
Besides increasing your policy’s deductible, there are other ways that you can decrease the annual cost of your policy right from the start. Insurance companies are in the risk business, so they are big on safety. Home security systems, reinforcing your home’s systems for your area, like adding storm shutters, reinforced doors, and high-impact windows, can also help you lower your annual homeowner’s insurance premium.
Take note of features of the home you are purchasing and mention them to the insurance agents you speak to when shopping to see what discounts they offer. You may also find a better rate on your homeowner’s insurance with the company with whom you currently have your automobile insurance. Companies often offer discounts to customers with multiple policies, so it is a logical place to start if the company offers homeowners insurance, too. Another way to keep your insurance costs down is to maintain good credit. Insurance rates are correlated to your credit score, so the better your score, the lower your rate.
Have You Compared the Estimates and Add-Ons?
Once you have estimates from three or four different insurance carriers, compare what they offer in their basic policies, their costs and the costs of any add-ons that you may require on your policy. Also, get them to estimate the difference in the rates based on two or three different deductible amounts.
Do You Need to Pay a Year in Advance?
Yes, you do. If you are purchasing a home with a loan-to-value of less than 80 percent, you will be required to pay a year in advance and then monthly with your homeowner’s payment. The insurance part of your payment will be put into escrow, along with your property taxes, and will be paid to the proper authority at the appropriate time of year. Â Homeowner’s insurance is a monthly expense to be added to your mortgage.
Do You Know What to Look for Now?
One of the many details you need to consider when purchasing a house, homeowner’s insurance Iowa is monthly. You can get a basic policy, if that is what you can afford, or add to it an extra liability policy or coverage for flood and extra coverage of jewelry, guns, electronics and other items that are expensive to replace and not covered by basic homeowner’s insurance Iowa. Do your homework and you can make a money-saving decision that will cover you, your loved ones and your new home.
2 Point Highlight
The best deal is not always the least expensive deal when purchasing a homeowner’s policy for your new home.
Not only for your protection, lenders require that you have at least have basic homeowner’s insurance in Iowa when you close on your new home.
