Homeowners insurance is designed to protect your house (the physical structure,) and your property. Under some circumstances, there is no law or other requirement to force a homeowner to purchase homeowners insurance in order to own a home. Many people who own older homes don’t insure the home, but if you don’t purchase homeowners insurance, you could lose everything, and be forced to face financial destitution. There are circumstances under which you absolutely have to purchase homeowners insurance in order to complete the transaction for the purchase of the home. Who Doesn’t Have to Have Homeowners Insurance? If you are building or buying a home and don’t need a mortgage to pay for the home, you won’t be forced to purchase homeowners insurance. In a case like this, if you don’t purchase homeowners insurance, any catastrophe could wipe out all of the equity you had in the home, and you would be left without the finances to either repair or replace your property. You would lose everything. When Purchasing a Condo If you buy a condo, the physical structure is insured under the property owner’s insurance. If you pay for the condo in full, and don’t need to borrow the money to finance the purchase, you don’t have to purchase homeowners insurance, but without doing so, you have no protection for any of your personal property. This is another situation where you could face financial ruin. Mortgages to Buy or Build a Home or Condo If you borrow money in the form of a mortgage, whether to build a new home, or to purchase an existing one, the lender will demand proof that you have a homeowner’s insurance policy. Unless you can bring your lender a copy of the policy as proof that the home is insured, none of the papers that finalize the mortgage can go through. You will also be required to include the lender as a co-beneficiary on the policy. The reason for this is to provide the lender with the assurance that if the home is destroyed by something that is specifically covered by the policy, the lender will recoup their money as soon as the insurance company issues a check that is made out to both you and the lender. Since the check is made out to two beneficiaries (you and the lender,) you won’t be able to cash the check without the lender’s signature. The insurance money is supposed to cover whatever is still owed on the mortgage. If the amount of the check is for more than what you still owe on the mortgage, the extra money goes to you. Homeowners insurance isn’t that different than health insurance. In both cases, you are paying to insure something of great value (yourself, your family members, or your home and property,) in case of something catastrophic. Without the homeowners insurance, you could be totally wiped out financially, without resources to rebuild your destroyed home, or repair any damage. Since you also insure the contents of the home, homeowners insurance provides you with the assurance and peace of mind that you will be able to get enough money to replace lost possessions – as long as you insure your property for replacement as opposed to actual value.)
When buying a new home, you may be wondering how much homeowners insurance you will need. There are many variables that go into calculating homeowners insurance and as new home buyers you will probably have lots of questions. The best way to make sure you end up with adequate coverage is to speak with an insurance agent who can answer your questions and find the best policy for your situation.
There are several components to homeowners insurance, but the basic types are dwelling coverage, other structure protection, and personal property insurance. The dwelling coverage will take care of your home. If you are buying a brand new home – you will need to calculate the value the entire structure. This will include hardwood floors, whirlpool tubs, and remote control fireplaces. You need to have enough coverage to replace or rebuild these items in the event of a disaster. The other structure protection will cover your garage, shed or barn. Depending on the items you keep in these areas and the size, you will need to calculate the value of the buildings. Finally, personal property insurance will take care of your clothing, electronics and jewelry if there is a fire or disaster that affects your home.
As new home buyers, you need to make sure you find the homeowners insurance you need for the price you want to pay. Comparing quotes from several providers will help you make the final choice. Speaking with an insurance agent who can answer your questions will also be helpful. Determining how much homeowners insurance you need is based on a lot of different factors and you may even want to speak with a local agent who can give you the best estimate for your area. Buying a home is exciting, don’t let a disaster ruin your day.
In recent years, consumers have become increasingly more aware of the fact that they can save hundreds of dollars if they compare home insurance quotes before purchasing a policy. However, many people don’t know under which circumstances they should request quotes in order to see if they can save cash or get better coverage. So when should you compare home insurance quotes?
- When you buy a new home. Whether you’re a first time buyer or about to purchase your third home, you should always compare home insurance quotes to see which insurance company offers the best deal.
- When the term of your current policy is almost up. Nearly every home insurance policy runs on a 12-month term basis. If you terminate your policy before the term is up in order to purchase a policy with another insurance company, you’ll have to pay an early termination fee that can be as much as a few hundred dollars. In order to avoid this, the best time to compare home insurance quotes is three months before your current policy ends. That gives you a month to request and review quotes from other insurers, and 60 days to end your current policy before it renews automatically.
- When you experience a change of family structure. Marriage, divorce, or a child moving out all have an impact on the amount of risk an insurer takes by insuring your home and everybody residing there. Always contact your current insurance company to find out how a change in your family structure will affect your premiums. Get the new rates, and then go to a trustworthy comparison website such as AgentInsure to compare home insurance quotes and see if you can get a better deal!
In some parts of the country there are homes that are still heated by oil storage tanks. Like any structure in the home, oil storage tanks must be cared for in order to work properly. Left uncared for, the oil storage tank can become unstable, begin to leak, and cause massive amounts of damage to the environment and surrounding area. When it comes to insuring a home with an oil tank, there has to be regular inspections and care given so the tank remains in top shape or the insurance company will not insure the home.
The tank should be inspected on yearly basis so that it works properly. The first thing to check is the condition of the lines. Look for cracks or evidence of small leaks. If any damage is found, have it repaired by a licensed contractor. Second, make sure the cap and vent are connected and tight. The cap keeps foreign matter from entering the tanks and a clean vent allows pressure to remain equal in the tank to prevent explosion. Also take a look and inspect the stands of which the tank sits. The stands should be in good shape to make sure that it does not fall over.
Tanks should also be kept clean to allow for maximum operation. Keep the outside of the tank free from ice and snow to it can be accessed with ease should the tank need to be worked on or filled. To clean the inside, remove the cap and fill the tank with water and Tri Sodium Phosphate, also known as TSP. Use a hose and air compressor to blow air through the mixture. Allow the process to continue for up to 12 hours. Drain the tank and allow it to dry out. In order to use the tank run one gallon of alcohol through it and drain. Allow the tank to dry and fill with oil when ready.
Homeowners insurance policies are designed for benefit of the owner to protect homes from a loss. They often cover the structure of the home, by determining a dollar amount for rebuilding in case of damage, and any detached buildings located of the premises, such as sheds or garages. Personal property is also covered under the basic structure of the home policy as well as loss of use; which pays for a family to live at another home while the home is being worked on. A homeowners policy can also be tailored to the needs of the owner by adding endorsements to the basic coverages
- Valuable items coverage. The policy owner can endorse expensive items, such as artwork, jewelry, and even computers on the policy for the valued amount.
- Water backup coverage. Will protect a house from water damage from water backing up into the house through a drain or an overflow from a sink or tub.
- Mold coverage. This may be an expensive endorsement, but it protects home in Texas from mold damage and clean up.
- Ordinance coverage. Older homes that are being rebuilt will sometimes have to be built according to current building codes. For example, in a city in which houses must be built a certain distance from the street, a older home may have to be moved back. Ordinance coverage pays for the home to be built to code in addition to the cost of rebuilding from a loss.