Shopping around for your dream house is not as easy as many would have you believe. There are many factors to consider. When you’re looking at the ideal real estate for you, you need to consider several factors, such as the school district, the property taxes, and the neighborhood’s overall appeal. Besides this, you shouldn’t discount the impact homeowner’s insurance will have on your overall budget.

With so many different factors attached to the task of purchasing a home, we thought it would be best to come up with a detailed guide that helps you identify all costs associated with buying a home. We have broken the guide as per the different phases of the home buying process to make it easier to understand. So, let’s get started on the home buyer’s insurance guide:

Before Hunting for the House

You need to ensure that you have enough resources to cover all the different facets of owning a home, and this means:

1.      Checking Your Credit Rating

You’ll need to have a good credit rating to qualify for a mortgage at low interest rates. It may even help you get a discount on your insurance. You should get copies of your credit report and ensure that they are accurate. If you don’t have a good credit rating, you should take the necessary steps to ensure that it is good before buying a home.

2.      Get a Renter’s Insurance Policy to Protect Yourself

You must get a renter’s insurance policy when renting an apartment or a house. If disaster strikes, your renter’s insurance will protect the down payment you’re accumulating for buying a home. It will also act as proof for when you go ahead and buy your own house.

Something to Lookout for During House Hunting

Remember, the home’s physical characteristics will affect the choice, cost, and availability of home insurance. These characteristics include its construction, location, size, and overall condition. In most cases, desirable features like how close the house is to the coastline and ornate plasterwork can make insuring a house more difficult or costlier. This is why you should consider the following factors when shopping for a home:

3.      Location and Quality of the Fire Department

Homes in the vicinity of permanently staffed, highly rated fire departments will cost you less money to insure, and the same is the case for houses with fire hydrants close to them.

4.      Proximity to the Coastline

Homes close to or on the coastline will be more expensive to insure than homes that are inland. Besides that, you will also need to acquire a separate windstorm or hurricane deductible for them.

5.      Age of the Home

Most people can’t resist the charm and allure of an older, stately home. However, you must factor in that ornate features such as ceiling molding, plaster walls, and wooden floors can be expensive to replace and will increase your insurance cost. Lack of maintenance and age can make electrical systems and plumbing outdated. So, if you’re thinking of buying an older home, you should check how much it will cost you to update the home.

6.      Condition of the Roof

Insurers tend to give preference to new roofs as it protects you and your family, and that’s why you should check the roof’s condition. You can even qualify for an insurance discount, depending on the type of roof and if it’s made with fire or hail-resistant materials.

7.      Construction Quality

You should check whether the house complies with modern building code standards. Homes constructed by expert craftsmen will have a better chance of withstanding natural disasters.

8.      Risk of Flooding

The standard home insurance policies don’t cover damage from flooding, and if you’re buying a house in an area with high flood risk, you’ll need to buy a separate flood insurance policy.

9.      Swimming Pool or Other Feature

If your home comes with a swimming pool or another special feature, like a hot tub, you will be required to get liability insurance. You may also need to think about getting an umbrella liability policy so that you have additional protection in case someone gets injured on your property and sues you.

Before You Place a Bid on the Home

You need to factor in all the different facets of the house, which will include its history, potential trouble spots, and the house’s current condition before you purchase it. For doing that, you must take the following steps:

10. Get the House Inspected

You should get your home inspected by a professional and reliable home inspector before getting your mortgage approved. Make sure the inspector is thorough in their investigation and does the following:

  • Checks the general condition of the house
  • Identifies spots where you may experience problems
  • Looks for termites, other types of infestation, and water damage
  • Reviews the water heater, septic tank, plumbing, and electrical system
  • Checks whether all previous issues with the home have been repaired
  • Suggests different replacements or upgrades to the home

Your home inspector will detect all problems with the home that an insurance company investigator can find in their evaluation. So, make sure your house is properly inspected and resolve the potential problems as soon as possible.