Buying a new home is such an overwhelming prospect that many first-time buyers don’t devote too much thought to homeowner’s insurance. However, if something were to happen, having the right coverage could prevent a financial catastrophe. Before signing up for homeowner’s insurance services in Southborough MA, homeowners should consider the tips listed below.
Get Price Quotes from at Least Three Insurance Companies
Mortgage lenders can-;and usually do-;require homeowner’s insurance as one of a loan’s terms and conditions. In some cases, the buyer may be required to buy flood insurance and other supplemental coverage. Customers don’t have to buy from a particular company. Rather, they should compare each insurer’s price, coverage, and user reviews. While price is important, it shouldn’t be a buyer’s only consideration, as finding the right amount and type of coverage is crucial.
Escrow Premium and Mortgage Payments
Most homeowners add their monthly premium to the amount paid on the mortgage, and the lender pays the premium and property taxes out of the escrow account. Lenders like this option because it reassures them that premiums are paid, and the investment is protected. More than likely, the homeowner will need to pay one year’s premiums at closing.
Ensure that Coverage is Adequate
The most critical part of homeowner’s insurance is the coverage level, and customers should not buy more coverage than they need. Below is a brief list of the most common coverage types.
- HO-2: This broad policy protects against over a dozen named perils.
- HO-3: Protects against all dangers except those specifically written out of the policy.
- HO-5: Protects well-maintained, newer homes, and covers against all but specifically excluded perils.
- HO-6: Covers condominiums and co-ops, offering liability, personal property, and improvement coverage.
- HO-7: Offers HO-3 level coverage to mobile home owners.
- HO-8: Protects older homes with HO-2 level coverage up to their cash value.
Understand Policy Details
Buying the right amount of coverage is important, but it’s not enough. Before making a decision, the homeowners should learn more about Insurance Services in Southborough MA. By learning how rules and terminology work together in a policy, the customer can ask the right questions to ensure that they’ll get the right coverage at a fair price.
