Are you looking to purchase a new home? Congratulations – what an exciting time it must be!
Or, are you feeling stressed about the buying process?
Are the paperwork and policies a drag? Is insurance bogging you down?
In a sea of policies and information out there, it can be difficult to sort through fact from fiction, as well as determine what you need.
To help, we’ve put together 5 major home buyers insurance myths to make the process easier on you.
1. Home Buyers Insurance is Mandatory
Fact: Having home buyers insurance is not mandatory by the government.
But, if you own a property, your bank or lender may require you to have an active home insurance policy and name them on your policy.
So, you don’t have to have it, but banks or lenders will encourage you to do so.
Why?
The answer is simple: so they’re covered.
If something happens to your home, it’s a financial loss for your lender.
2. You Will Get “Full Coverage” When You Buy Insurance
Fact: With so many insurance policies out there, odds are, you won’t have full coverage.
Only if you buy something like umbrella insurance.
Of course, there are insurance policies that have a large amount of coverage, like H03 insurance.
But, that coverage will come with exclusions, which is why it isn’t full coverage.
3. Your Coverage Protects Your Valuable Items
Fact: While home buyers insurance will cover your personal possessions, the insurance policy typically will not cover 100% of the original amount.
Instead, the coverage amount for personal possessions will usually cap at 50 to 70% of the total coverage amount of your home insurance policy.
There’s also dollar-amount limits your insurer will provide for coverage.
If you have expensive items in your home, such as antiques, you may want to consider getting an extra endorsement to fully cover your possessions.
4. Natural Disasters Are Covered Under My Policy
Fact: Not every single natural disaster is covered by home insurance.
Some disasters may be, such as fire or tornado damage. But, that doesn’t automatically mean your home is covered in the event of a hurricane or an earthquake.
To make sure you get all the coverage you need, look over your policy options carefully. Seek extra coverage where it’s needed.
5. Insurance is Cheaper for Older, Less Expensive Homes
Fact: The opposite is true for this one. The older the home, the more expensive your insurance may be.
Why?
Because there’s a higher chance of something going wrong in your home.
Something may not work properly and needs repairs.
So, it’ll cost more for the insurer to fix it.
That’s not to talk you out of purchasing an older home if one has your heart. It just means, be aware that it may need TLC due to a fault.
Conclusion
Home buyers insurance isn’t as simple and straightforward as we’d like it to be. It will require some research and dedicated reading.
At Amistad Insurance Services, we work to help you find the best insurance policy based on your needs at a great price.
If you’re in the market for a home insurance policy, get a quote to see what your options are.
If you have any questions, don’t hesitate to contact us!
