The purchase of a house is usually an exciting and fun process. It is also one of the most important investments in one’s life. In fact, the second essential investment after buying a house is the purchase of homeowners insurance because it protects your home and personal belongings against theft or damage. However, before choosing homeowners insurance, learn five facts you probably did not know about it.
1. There are various policies
Depending on your budget, type of house or the level of coverage, your policy options might change. Overall, there are eight types of homeowners insurance policies such as HO-1, HO-2, HO-3 to HO-8 from which HO-3 is the most common type because it provides you with “open perils coverage.” You can find out more about each of the policies by following the link.
2. You DON’T need to own a house to have protection
Regardless of whether you own a house or you rent one, you still need some protection. In fact, many landlords require their renters to have coverage similar to renter’s insurance. But whether it’s required or not, it’s still a smart decision against possible unexpected damages that may result in expensive costs for you.
3. Know your policy thoroughly
Many people rush the events and buy policies while unaware or partially aware of the coverage they buy which then leads to problems such as realizing that the policy doesn’t cover what you need. Therefore, to avoid undesirable consequences, you should have a complete understanding of what you’re buying.
4. Your credit DOES matter
Believe it or not, but your credit plays a vital role in the rate you pay for credit accounts and whether you can rent an apartment. What is more, it also affects your insurance premiums. In fact, InsuranceQuotes study of 2015 showed that if you have poor credit, your premiums can double and you might pay much more. However, it does not relate to all states of U.S. because some states such as California, Maryland, and Massachusetts prohibit the influence of credit in determining home insurance premiums.
5. Life changes can make a change
People do not necessarily connect life-changing events such as marriage, divorce, moving out or other similar in relation to the coverage they have. However, these type of events matter, and in some cases, they can even lead to changes in policies and costs. So next time, when a life-changing event happens, do not forget to call your insurance agent and check whether it makes a change in the type of coverage you have.
Read our other blog posts about Home Insurance.