Home Owner's Insurance (In Brief)

First and foremost I want everyone to understand I am a Realtor not in the insurance business. My knowledge is limited so I must suggest for complete details on securing home owner’s insurance….contact a reputable insurance company. Ask your family, friends or peers for referrals of whom they recommend.

Having home owner’s insurance is a must for getting a mortgage loan on your next residence. As I mentioned before, I recommend you start by asking folks for an insurance referral or ask your Realtor for recommendations or start my calling companies listed in the yellow pages. Policies vary dramatically, so put in the time to select the right one for your needs.

First to know is that you don’t buy insurance for the entire purchase price of the home. The land the home sits on is virtually impossible to ruin so it does not need to be insured. Second, ask the insurance representative to explain replacement cost or actual cash value policies. Third, home damage can come in many forms ie: fires or break-ins or hail damage or escaped zoo animals. Many insurance agents recommend an “all-peril” policy which covers damage from anything not specifically excluded in the policy language. There is also a “named-peril” policy that covers only damage that is listed in the policy. The insurance agent is the one to explain the difference.

Consider adding Personal Property Insurance to cover contents from your socks to dishes to furniture and one-of-a-kind possession ie: jewelry or artwork. A standard policy may not cover geographically predictable perils ie: hurricanes, flood-prone areas or earthquakes. We, in Ohio, just experienced (2009) a new set of flood maps with new guidelines. You will want to know if the seller has been notified the home is now included in the new flood map location.

Last but not least, you will need to supply proof of insurance to your lender that will clear another segment of the purchase agreement. Insurance companies will ask you to prepay a year’s worth of premiums as part of your closing cost. Of yes, ask your Realtor to provide you with an estimate of the closing costs before you complete your purchase contract. Many buyers are surprised to learn they don’t have enough money in savings to cover all the expenses necessary to be deposited before transferring title can occur. Surprises like this are not a good thing!

Leading The Way Home,

Carol Murphy,

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Avon Lake Real Estate