Home Insurance Checklist

Before you buy

  • Check to see if any claims have been made concerning the property you are looking to insure. Also take into accounts any claims you have ever filed on a home insurance policy.
  • Your credit score can affect your home insurance rates. Check to see if there is any incorrect information which should be disputed.
  • The weather patterns where you live can determine what special features your insurance policy should have.

Condition of the home

  • A new roof will generally get you a discount on insurance.
  • An already damaged foundation can mean expensive repairs are coming, and a higher premium to pay.
  • Older plumbing and electrical can also cause a hike in premiums.
  • A pool or wood burning stove can increase liability or fire risks and result in a higher premium or the need to carry extra coverage.

Disaster clauses

  • Homes located in coastal areas or flood plains will need flood insurance specifically included in their policy.
  • Almost any house should be covered in case of fire, but some insurance companies will try to exclude it hoping you won't notice.
  • Some companies will put fire coverage through but exclude smoke damage.
  • If your home sits on or near a fault, make sure you are covered in case of a quake.
  • These are common in some areas, and should be insured against.
  • Coastal regions can be extremely susceptible and homes should be covered.

Coverage

  • This is extra liability coverage that protects you in case someone is injured on your property and sues you.
  • If the city or county you live in mandates a code upgrade, you can be stuck trying to afford necessary renovations. You can purchase a special rider to cover such an event.
  • You want insurance that will cover the cost of constructing a new home, not just a policy that pays off your mortgage.
  • You will need to list all of your belongings- not just jewelry and other high ticket items. If your clothes burn up, they will need replacing too. Buy replacement coverage, not market value.
  • Purchase extra coverage that can cover a rental while you are homeless.
  • A flat rate deductible is best, and a higher deductible means a lower premium.

Discounts

  • You can receive discounts for alarm systems, deadbolts and other security features.
  • Smoke and CO2 detectors, fire extinguishers and sprinklers can also garner a discount.
  • If you insure your home and auto through the same company, you can often receive a multi-policy holder discount.
  • Many companies offer discounts to people over age 55.

Purchasing home insurance is more than signing your name to a policy presented to you by your lender when you are approved for your mortgage. The insurance policies required by a financial institution that holds the mortgage on your home only protect them, not you - it generally insures for the amount of the mortgage, payable to the lender in case of a disaster - or even the event of your death or severe disability that would render you unable to pay for the home. You need a policy that would not only pay off the mortgage if something happened to your home, but would also cover the cost of all of your belongings and give you a cushion to start over. This checklist can serve as a reminder of things you may not have considered insuring, but which would be sorely missed if your home was destroyed.

Tips

In an ideal world, a home insurance policy would provide enough funding to completely replace your home and furnishings and belongings. Unfortunately, many people buy an insurance policy without reading the fine print, and end up in hot water when misfortune strikes. There are many insurance policies that feature strict exclusions for such natural disasters such as flooding or even fire. Other policies don’t cover structural damage such as foundation settling from the ground shifting or roof damage from high winds. Still others may pay only the fair market value of the house, or the payoff amount due, instead of enough to replace your home. It is important to make sure that if the worst happened, you would be able to move instantly into a comparable home and replace your furniture, clothing and any other items which have been lost or damaged. Any insurance policy that does not cover these basics should be dismissed.