Homeowners Insurance on a Budget

If you’re like most home buyers, you’ve stretched your budget to the max. You’ve comparison-shopped every aspect of your move, decided to forego your dream vacation, and put off that new-car purchase for another year.

But make no mistake: homeowners insurance isn’t an extra. No one wants to contemplate disaster, but all it takes is a quick glance at the news to see how many things can go wrong. From burst pipes to earthquakes, fires to slip-and-fall accidents, most problems come without warning. Repairs are costly and time-consuming. While homeowners insurance doesn’t guarantee your home’s safety, it does mean that in the event of a disaster, the burden of costs will not ruin you financially.

If you borrow money to make your home purchase, it’s also not optional; mortgage lenders will require a policy of insurance before the sale is final. Since your house is collateral for the loan, it’s understandable that lenders want that collateral protected. Depending on the nature of your loan and the size of your down payment, your monthly premium may be bundled with your mortgage payments.

Your homeowners insurance covers various parts of the property and activities on the property as well as levels of replacement (i.e., actual cash value, replacement cost, extended replacement cost). Typical homeowners insurance policies offer coverage for the main structure, additional detached structures (outbuildings, etc.), personal property, liability (injury to guests), and additional living expenses incurred in the event of damage to your property.

The value of your home and possessions—and your budget—will dictate how much coverage you get in each part of the policy. Your lender will probably require a specific minimum amount of coverage and may specify a maximum deductible.

Standard policies do not cover damage by floods, earthquakes, poor property maintenance, or a number of other perils. If you live in a flood or other hazard zone, you should investigate your insurance options.

When you’re looking for ways to save, ask for quotes from several insurers. Make sure the quotes are based on the same amounts and terms. Your Sente mortgage banker is highly experienced in assisting borrowers with questions about homeowners insurance and will be happy to help you shop for a policy that fits your needs and budget. Give us a call today. 

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