Homebuying August 15 2018

Understanding Homeowner's Insurance

While you’re basking in the joy of buying a new home, we know the last thing you want to think about is any destruction or vandalism done to the property. But an unfortunate part of homeownership is safeguarding against any potential damage. To ensure you get shortchanged when you’re trying to recover, here are the 5 important things you need to understand about your homeowner’s insurance.

1. Look for exclusions to coverage. 

Don’t wait until disaster strikes to receive a pitiful reimbursement or find out you have to pay to rebuild all on your own. Typically, of course, you’ll pay a set amount, or “deductible”, before your insurance company helps make up any financial losses you incur. But most popular insurance policies have standard damage items that they won’t pay for, and will require their own additional coverage:

  • Floods
  • Earthquakes
  • Fires
  • Windstorms
  • Explosions
  • Smog
  • Rust/Corrosion
  • Collapse due to ice or snow
  • Frozen plumbing
  • Power surges
  • Demolition to bring your house up to code

The list goes on. These types of coverages often must be bought separately, so be sure to have an insurance company walk you through any add-ons when you’re shopping for a policy. Keep up-to-date on what benefits you receive and what restrictions apply, so you know the limits of your home insurance policy’s features. It’s important to be on the same page when you’re defining “comprehensive.”

2. Look for dollar limitations on claims. 

Even if you’re covered for a risk, or “peril” in insurance terms, there may be a limit on how much your insurer will pay. Many policies put caps on the amount that they’ll put forward for stolen items unless you insure them separately. When you invest in expensive lifestyle items, know whether you should have a separate rider for the following:

  • Jewelry
  • Watches
  • Furs
  • Sporting equipment
  • Electronics
  • Instruments
  • Fine arts
  • Personal records, such as passports, deeds, etc.

The declarations page of your homeowner’s insurance policy should summarize what percentage you can expect to make back on certain items, depending on their value at the time of your claim. You should always outline the maximum amounts payable for your valuables so you don’t run into a nasty surprise down the road. If an insurance policy has low limits, keep shopping to enhance your coverage.  

What about mortgage insurance?

 

3. Understand replacement cost. 

Replacement cost will pay to rebuild your home to restore its original quality, even if current building costs have increased. If your home is destroyed, you'll receive money to replace it only to the maximum of your coverage. So if your home is insured for $150,000 and it costs $180,000 to replace it, you'll only receive $150,000. Bottom line? You need sufficient coverage. You’re only entitled to a replacement if the damage you incur could not have been predicted. In other words, your property was not purposefully damaged. There’s a difference between “sudden and accidental loss” versus negligence.  

4. Understand actual cash value. 

Actual cash value refers to the reimbursement that you receive for destroyed belongings after depreciation, meaning it factors in any reduction in value due to age or condition. So unlike replacement cost, the actual cash value will only restore a portion of your property’s worth. You don’t come out even. Ease any future heartbreak from financial and personal loss. Review your needs to plan for the level of protection your home insurance should include.  

5. Understand liability. 

Generally, your homeowner’s insurance backs you up in medical costs and legal fees when you’re sued for accidents that befall other people on your property. However, there is usually an upper limit to the amount of coverage provided. Ensuring your homeowner’s insurance will have a large enough reserve for court costs, death benefits, etc. will protect your significant assets.  

For more advice about homeowner’s insurance or claims,

Speak to a Loan Officer today!

  Sources: www.insure.com www.allstate.com www.thebalance.com www.thebalance.com[2] www.trustedchoice.com

April 15 2021

How to Get a Mortgage When You're Self-Employed

Here are a few things you need to consider to land the best possible mortgage when you're self-employed.

Read More

April 07 2021

3 Surprising Refinancing Mistakes

When refinancing, be careful to avoid some pitfalls and traps that could cost you money in the long run. Here are some of...

Read More

March 31 2021

10 Unexpected Spring-Cleaning Tips

Keep your home in the best possible shape with these surprising life hacks.

Read More

March 23 2021

Tax Season Tips for Homeowners

If you're a new homeowner, you might be wondering how homeownership affects your taxes. The answer is: It depends on one big...

Read More

March 11 2021

A Virtual Homebuying Helper: Lennar Homebuying Seminars

Online webinars are making it easier than ever to help buyers get educated and take the first steps toward their dream of...

Read More

March 04 2021

What is Mortgage Insurance?

Mortgage insurance may seem like just one more painful added expense when considering buying a home and how much you can afford....

Read More

February 25 2021

What to Expect on your Path to Homeownership

Our Digital Mortgage Experience is a modern mortgage application with a personal touch! We’ve designed our Digital Mortgage...

Read More

February 18 2021

How to Get a New Construction Loan

Tips and steps for buying a new-construction home.

Read More

February 11 2021

What's In Your Monthly Mortgage Payment?

Understanding Mortgage Insurance, Escrow, and Supplemental Home Costs

Read More

12345Last

Search Results for query

January 20 2017

Tips on Buying in a Tight Market

Increase your chances of getting your dream house instead of losing it to another buyer, with these easy steps. Get prequalified for a mortgage. You'll be able to make a firm commitment to buy and make your offer more desirable to the seller. Stay in close...

Read More

January 20 2017

Tips for Finding the Perfect Neighborhood

The neighborhood you choose can have a big impact on your lifestyle, safety, available amenities, and convenience all play their part. Make a list of the activities, movies, health club, church you engage in regularly and stores you visit frequently. See how far...

Read More

January 20 2017

4 Tips to Getting Your Finances in Order

The beginning of a new year is the perfect time to improve your finances, even though it may sound like a dull task. For some, the idea of sorting out their finances isn’t very appealing, but it can help set yourself up for a solid financial...

Read More

January 14 2017

What Is a REALTOR?

A real estate agent is a REALTOR when he or she is a member of the NATIONAL ASSOCIATION OF REALTORS, The Voice for Real Estate -- the world's largest professional association. The term REALTOR is a registered collective membership mark that identifies a real...

Read More

January 14 2017

What Your Home Inspection Should Cover

Siding: Look for dents or buckling Foundations: Look for cracks or water seepage Exterior Brick: Look for cracked bricks or mortar pulling away from bricks Insulation: Look for condition, adequate rating for climate Doors and Windows: Look for loose or tight...

Read More

January 14 2017

What Is Appraised Value?

It's an objective opinion of value, but it's not an exact science so appraisals may differ. For buying and selling purposes, appraisals are usually based on market value: what the property could probably be sold for. Other types of value include...

Read More

January 14 2017

The Pros and Cons of Condos

Condominiums and townhouses offer an affordable option to single-family homes in most areas. But consider these facts before you buy. Storage. Some condos have storage lockers, but usually there are no attics or basements to store belongings. Outdoor space....

Read More

January 05 2017

Determining the Better Fit for You – To Rent or To Buy?

If you’re looking to make a move soon, you may be faced with a common question—to rent or to buy? When determining whether or not to continue to rent or if you’re ready to become a homeowner, there are a number of factors to consider. Below,...

Read More

June 30 2016

8 Steps to Prepare Your Home for a Hurricane

With hurricane season approaching, it is crucial to be prepared for any kind of danger. Having a disaster plan includes knowing your local evacuation escape routes, check your local news channels for real-time updates, and building an emergency kit. While...

Read More

First2324252627

Mortgage Calculators

Crunch the Numbers With Our Helpful Mortgage Calculators

Payment Calculator

payment calculator

Payment
Calculator

Affordability Calculator

affordability calculator

Affordability
Calculator

Refinance Calculator

refinance calculator

Refinance
Calculator

The Modern Digital Mortgage with a Personal Touch

Paperless. Effortless. Awesomeness TM

Simplify the home financing process with our Digital Mortgage. We'll be here to help navigate you through the entire process.

Get Pre-qualifiedWhat is a Digital Mortgage?