Purchasing Reasonable Home Insurance
When you buy a home, whether you pay a monthly mortgage (like normal people) or some how just purchased it outright (like lottery winners do), you want to be certain it's properly insured, not just against catastrophic occurrences like tornadoes, floods, and hurricanes, but also against more mundane things like your nosy neighbor slipping on your walk while trying to peer through your front window and subsequently suing you (it's happened, I swear!) But how can you be certain you have adequate home insurance coverage, yet not pay an arm and a leg? What You Really Need First, you should get your home appraised, both the actual building by itself and the lot. You should ask your appraiser how much it would cost to rebuild your house if it burned to the ground. Why? Because if you lose your whole house, you still have the land on which it stood, and there's no good reason to insure that. (unless you live in mudslide area in California or sinkhole country in Florida - but you know if you fall in that category!) By insuring the rebuilding value of your home, you prevent over-insuring. In some areas, the land is worth much more than the home, and can add huge amounts to your premiums. Second, you should have all objects of value in your home appraised. Photograph everything, catalog it, and (this is very important!) keep the catalog somewhere outside the house! It does you no good if it burns with all your possessions. I suggest a relative's home; a good friend's home, or even at your insurance agent's office, if they don't mind storing it. Another option is to keep your catalog stored online in a secure private web site (you can find them if you search), which removes the possibility that it could be lost or damaged. To the Agent! Now you're ready to buy your home insurance. Armed with your appraisals and your pictures, you can go to the agent and demand their lowest rate. No, wait, that's not smart! Ask the agent what they think you need in home insurance instead. Most agents are like you - honest people who want to be able to feel good about themselves when they look in the mirror each morning. Get quotes from three or four different agents. Don't just take the lowest quote; assess the advice given you by each agent and determine which one you feel most comfortable with. You can run your lowest quote by that agent and see what they tell you; you might be able to get a lower quote from the agent you really liked. At the same time you're trying to not overspend on home insurance, you don't want to be too cheap. Get good coverage for whatever catastrophes may happen in your part of the country. Ask your agent what you can do for your house - and for your community - to decrease your insurance rates. These may be things as simple as retiling the floor around your fireplace, or as complex as starting a neighborhood watch group. Your insurance agent is going to be able to tell you things you can do for your home to save energy, decrease your liability in case someone sues you, and protect your home, your family, and the things you love from fire, flood, and tornado. So: don't over-insure; don't underinsure; and go with the agent you feel comfortable with when you buy home insurance. That's it in a nutshell.
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