How To Find A Good Homeowner’s Insurance Policy

Homeowner’s insurance is an insurance policy that protects your home and belongings in case of damage. Things like fire, natural disasters, injuries, etc. can wreak havoc on your home and end up costing thousands of dollars to fix, and a homeowner’s insurance policy helps you recoup your losses should anything like this occurs. In most mortgage situations, homeowner’s insurance is required. 

Getting Homeowner’s Insurance

Getting homeowner’s insurance isn’t rocket science, so don’t let the prospect intimidate you. Follow these steps to ensure you get the right policy for your needs.

  1. Find a local insurance agent. Ask family/friends for recommendations or ask your real estate agent. 
  2. Interview agents
  3. Get a quote – be prepared to provide information about the property to get an accurate quote. 
  4. Review the declarations page – make sure all the information on this page is accurate and that the coverage is what you need it to be. 
  5. Notify your real estate agent – let your agent know you’ve acquired homeowner’s insurance once you’ve settled on a policy. 
  6. Supply lender with documentation – give the lender a copy of the declarations page to provide proof of coverage. 

Things to be Aware Of

Although getting homeowner’s insurance is an easy process, there are a few things to watch out for. 

  • Exclusions – take note of policy exclusions. Common ones include earthquakes, natural disasters such as tsunamis, hurricanes, and flooding, and landslides. 
  • Anti-concurrent causation clause – this is basically a trap door built into your policy that says if your home is damaged by two causes (say wind and flooding), where one is covered and one is not, there may be limitations to what the policy will cover if anything at all. Look for a policy without this clause if possible. 
  • Spikes in building materials or changes to building codes – your policy will need to cover the cost of rebuilding your home should something happen, but spikes in the cost of building supplies or changes to building codes could make rebuilding more difficult if the lender includes exclusions for these instances. 

If you’re securing any kind of lending for your home, homeowner’s insurance will likely be required. With that said, acquiring a homeowner’s insurance policy is a straightforward process that shouldn’t cause you grief. Just follow the steps above and make sure all the information is accurate to ensure you get a good insurance policy for your situation.