Phase 3: Homeowner’s Insurance
When you purchase your new home you will want to purchase homeowner’s insurance. If you are financing the purchase through a lender, the lender will require homeowner’s insurance. The lender will probably require that the homeowner’s insurance must equal the lesser of the loan amount or guaranteed replacement value. You should speak with your lender about the amount of insurance, allowable deductible and the mortgagee clause which must appear on your insurance policy. This is the clause that insures your lender as well as you in the event that a claim on the insurance policy is necessary.
Homeowner’s Insurance Tips
The following are some useful tips to avoid being dropped by your homeowner’s insurance provider and which may, in fact, keep your premiums lower:
- Consider whether or not to file that claim. You should also be careful about contacting your insurance carrier about your policy. Many insurance carriers now count telephone queries as “claims” and will enter them into your file, translating them into demerits at your next renewal period. If you have a general question, call the company but do not provide your name or address.
- Stay aware of the information your insurance carrier collects about you. The Comprehensive Loss Underwriting Exchange (CLUE) is a database used by the insurance industry to keep track of claims and queries for every individual insured party. You can access your own record for free a maximum of one time a year atwww.ChoiceTrust.com. Look at your report very carefully and contact your insurance carrier if you discover any errors.
- Report upgrades to your home at every renewal period. Replacing an aging roof, pipes or electrical systems or adding or upgrading a security system may count in your favor and raise your CLUE score and/or reduce your premiums.