Best Insurance Practices for New Homeowners

July 31, 2015
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When shopping around for Home Insurance in Clermont, it is important to ask yourself, "What is most important to me?" Are you looking just to get a cheap home insurance rate or are you serious about protecting your assets? As a new homeowner, the mortgage process alone can be a nightmare. You have to provide countless documents, pay stubs, and possibly even your first born child. Thankfully, insurance is actually the easiest part of the new home transaction.

Many (if not all) mortgage companies require that you carry Home Insurance as a means of protecting their investment. Also, these companies may also offer mortgage and Homeowners Insurance through an affiliate. Do not confuse mortgage insurance with Homeowners Insurance. Mortgage insurance is like gap insurance for cars, it protects the lender in the event that something happens to the owner. In most cases, do not go with the banks Homeowner Insurance. The bank has a primary concern to cover their house. Often, they overvalue the house and undervalue homeowner expenses. This is where doing your homework will come in handy.

First, look for reputable companies. Your best bet is to contact an independent insurance agency like Southern Insurance Group that can quote your insurance through 35 carriers all at the same time. All of our carriers have a minimum "A" financial rating through Demotech, with multiple layers of reinsurance to coverage major catastrophes like hurricanes.

Now that you have an idea of what to look for in a Home Insurance company, next is what you will need to know about your home. Here is a good list to write down and fill in to help you: Year the home was built in, square footage, size of garage, basic building materials of the home, age of roof and material of roof. Also, some companies will ask you if you have "custom features" in your bathroom or kitchen. This can confuse people. If you laid down a custom vinyl back splash or if you tore out the old tile and laid new tile, you really did not change the actual value much. However, if you have a double wall oven or an island fridge, then you may want to consider these as custom features. A good rule of thumb is if you think that the upgrades add $5,000 of value or more to the home, consider it custom.

Finally, it’s time to make some phone calls. Based on the information you provide them, the insurance company will calculate how much they estimate it would cost them to rebuild the home. Please note that rebuild cost and market cost can vary drastically. For instance, you may see that the values of homes are still selling below market, but this does not mean you insure you home for the lower value.

At Southern Insurance Group, we do a customized detailed cost-estimator to determine how much we need to insure your home for. As a rule, you can raise or lower the coverage 10-25% with most homeowner carriers.

We will also review your limits of liability. These are fairly standard and should not vary from company to company. Most average liability limit is $300,000. In regards to your property, most companies will take the 75% of the value of the home and apply that figure to your personal property. It is important to seek replacement cost for your items rather than actual cash value. This way, you actually get new stuff rather than the degraded value of your items.

Armed with this information, you will not only be able to get a great rate, but you will get adequate coverage for your home. Call the professionals at Southern Insurance Group for your comprehensive quote today, 352-243-9000 opt 1, or visit us online to request your Free Homeowners Insurance quote!


Tom Johnson-Owner

Southern Insurance Group