When you get ready to buy that new home, you'll need to get a homeowner's insurance poilcy on it. There are hundreds of insurance companies in the Hoover, Alabama and greater Birmingham area, and different tyes of coverages. When you are shopping, make sure you are comparing like policies and getting the coverage you need. Talk to your prospective agent and find one that will explain things to you. Here are some things to ask questions about.
•1. Look for exclusions to coverage. For example, most insurance policies do not cover flood or earthquake damage as a standard item. These coverages must be bought separately. If you live on a huge hill, you may not need flood insurance so pay only for those things you feel you need.
•2. Look for dollar limitations on claims. Even if you are covered for a risk, there may a limit on how much the insurer will pay. For example, many policies limit the amount paid for stolen jewelry unless items are insured separately.
•3. Understand replacement cost. If your home is destroyed you'll receive money to replace it only to the maximum of your coverage, so be sure your insurance is sufficient. This means that if your home is insured for $150,000 and it costs $180,000 to replace it, you'll only receive $150,000.
•4. Understand actual cash value. If you choose not to replace your home when it's destroyed, you'll receive replacement cost, less depreciation. This is called actual cash value. Keep in mind if you live in a subdivision with restrictions or have a mortgage on the property these documents may require you to rebuild.
•5. Understand liability. Generally your homeowners insurance covers you for accidents that happen to other people on your property, including medical care, court costs, and awards by the court. However, there is usually an upper limit to the amount of coverage provided. Be sure that it's sufficient if you have significant assets.
It's good to shop for insurance as soon as you sign that contract so you'll have plenty of time to review what each agent has to offer. That way you can make an informed decision.
I sell Real Estate in Hoover Alabama and the Greater Birmingham area. If you'd like to know more about the home buying process, feel free to contact me at www.ToniBird.com.
