When buying a new home, the process can be overwhelming. Finding the right house, negotiating a fair price, scheduling the inspection and completing the mortgage process can all be daunting tasks.
Finally, the deal is complete, mortgage is approved, and the closing has been scheduled. Then, the mortgage broker asks, “Please send us your Certificate of Insurance so we can close.”
At this point, most people jump to the internet or call one of the big-name insurance carriers to get the quickest and least expensive home insurance quote. This will get you a policy to satisfy the mortgage requirements, but it may not be the best way to protect your new asset.
Several things to consider when obtaining home insurance, that may be above and beyond the Mortgage requirements are:
Replacement Cost: Mortgage requires you to insure the value of the loan, but it may cost significantly more to rebuild the home in the event of a loss. Things such as quality of construction, size and location should be taken into consideration when determining proper replacement cost, not just the value of the loan.
Personal Liability: Only minimal liability limits are required by the Mortgage. Lawsuits are common and not having enough liability protection leaves you exposed to financial responsibility if you are sued. Your liability limits should not just meet the requirement of the mortgage but be determined by the value of the home and any other assets that you may have.
Personal Property: Also known as contents coverage, this provides protection for all possessions. If you have expensive furniture, clothing and electronics then we should provide coverage based on the value of all of your items.
Valuable Articles: Typical home insurance provides minimal coverage for high value items such as jewelry and artwork. If you will have these in your new home, we can provide special coverage to protect them.
Auto Insurance Review: Your biggest exposure to a lawsuit comes from owning an auto. When purchasing a new home, you should review your auto insurance to ensure you have proper auto liability limits. Unfortunately, a lawsuit from an auto accident can result in a lien on your home so you want to make sure you have appropriate auto insurance.
If you are in the process of purchasing your first or fifth home, please contact us. We would be happy to walk you through the insurance process and make sure you have all the right coverage. As an independent agency, we can provide quotes from multiple carriers to ensure you are getting the best available price.
Click here or call today for your personalized quote!
John R. Russo
President, KJE Consultants, LLC