PURCHASING THE HOUSE AND INSURANCE
Part 3 of 4 See Part1 or Part2
Congratulations, you are set to purchase your new home. Now you want to be sure you are getting the right insurance coverage at the lowest possible price.
Take the highest deductible you can afford: The higher the deductible, the lower the premium. Since most people only file a claim every eight to ten years, you will save money over time and preserve your insurance for when it’s really needed.
Ask about available discounts for:
Multipolicy (home, car or other policies with the same company)
Smoke detectors
Fire extinguishers
Sprinkler systems
Burglar and fire alarms that alert an outside service
Deadbolt locks and fire-safe window grates
55 years old and retired
Long-time policyholder
Upgrades to plumbing, heating and electrical systems
Earthquake retrofitting to make the home safer
Wind-resistant shutters
Get enough insurance to:
Completely rebuild the house in the event it is destroyed by fire or other insured disaster . Replace everything in the house.
Protect your liability in case someone is injured on your property and sues you.
Ask about additional coverage such as:
Replacement cost for possessions
Extended or guaranteed replacement cost for the structure
Building code upgrades
Sewer and drain back-ups
Inflation-guard
Umbrella coverage for a pool or other high-risk items
Special riders for jewelry, collectibles and expensive items
Flood, earthquake and windstorm risk: Damage caused by flooding and earthquakes is not covered by standard homeowners insurance policies. Instead, homeowners will need to pay an additional premium for coverage that is provided through the government’s National Flood Insurance Program (NFIP). To get flood insurance, your community must participate in the NFIP program. Policies for coastal properties will have a sizeable windstorm deductible, which means the homeowner may be responsible for thousands of dollars of damage before insurance kicks in. It pays to know what is in your policy. Earthquake insurance is offered by private insurance companies. In California, coverage is available through the California Earthquake Authority, a state program, as well as the private market. It can be expensive and comes with a high deductible.
October 18, 2007
