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

May 11 2020

4 Signs It's Time for You to Move Up

Spending more time at home may have shown you that you need more space! Here are our tips on knowing when it's time to move up.

Read More

May 04 2020

Planning the Perfect Staycation

Cancelling your summer vacation? You can keep your family safe & healthy while still unplugging and escaping reality for a bit. Here are some ideas to help you plan the perfect staycation!

Read More

April 30 2020

Virtual Homebuying Is The New Normal

The idea of home has always been a place of safety and comfort, but now our homes are becoming so much more. Luckily, you can find, finance and close on a home from the comfort of your living room. 

Read More

April 20 2020

Tips to Lead a Greener Lifestyle in Your Home

We celebrate the 50th anniversary of Earth Day this year. It's a great time to assess our habits at home and think about small changes we can make to do our part. Here are some small tweaks to your home habits to make you feel fulfilled as well as help...

Read More

April 15 2020

8 Simple Design Ideas for Your Dream Backyard

Did you know that gardening can decrease stress, improve your mood, and keep you active? You might have limited access to the outdoors right now, but planting flowers is just one way you make your backyard your own personal oasis. 

Read More

April 08 2020

Family Easter Fun While Social Distancing

Not sure how to celebrate Easter this year? Your normal traditions may be put on hold, but you can still celebrate with your family at home this year! 

Read More

April 01 2020

What is a Rate Buydown?

What are mortgage points and how do they work? Simply put, a mortgage rate buydown is when a borrower pays an additional charge in order to obtain a lower interest rate on their home loan.

Read More

March 27 2020

Spring Cleaning Tips

It's time to kick off spring cleaning! We’ve compiled some tips to help you tackle cleaning with less stress.

Read More

March 23 2020

Mortgage Rates, Explained

The US is experiencing wild day-to-day fluctuations in financial markets. Headlines include massive federal stimulus and news that the Federal Reserve has cut interest rates to zero. If you have applied for a mortgage, what does this mean for you?

Read More

First34567Last

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?