Home Buyer Checklist

Check on insurance early. When buying a home, the sooner you check with an insurance company or agency to price a policy and find out if you can insure that property, the smoother the process will be.
 
Check the claims-filing history of properties you are selling and buying.

• Get a copy of your own loss history report, such as a CLUE report from ChoicePoint or an A-PLUS report from Insurance Services Office (ISO).
• Ask the seller to provide a copy of the home's loss history report (called a CLUE or A-Plus Report) with the disclosure statements. This can alert you to any damage that may have occurred to that property. Depending on your insurance company, the loss history of your potential home may affect your insurance.
  

Make sure you buy the amount of insurance you need. Take the time to properly insure your home. Make sure that you have enough coverage to:

• Rebuild the house if it is destroyed by fire or another insured disaster.
• Replace everything in it.
• Protect your assets if someone is injured on your property.
  

Consider a higher deductible. If you can afford a higher out-of-pocket deductible, it will save you in the short-term on your insurance premium and also discourage you in the long-term from making small claims that could put your insurance at risk for non-renewal.
 
Ask about extra coverage.

• Replacement cost coverage for possessions.
• Extended or guaranteed replacement cost coverage for the structure.
• Building code upgrades.
• Sewer and drain back-ups.
• Inflation-guard.
• Umbrella coverage if you have a lot of assets to protect or the property has high- risk features, such as a pool.
• Special riders for jewelry, collectibles and expensive items.
  

Insurance is something most people don't even want to think about until they need it the most. But, understanding what is and isn't covered in your homeowners insurance policy can mean the difference of being able to rebuild your home and replace your personal belongings. Homeowners need to do annual insurance policy "check ups" to make sure they keep up with local building costs, home remodeling and inventories of their personal belongings.
 
The typical homeowners insurance policy covers damage resulting from fire, windstorm, hail, water damage (excluding flooding), riots and explosion as well as other causes of loss, such as theft and the extra cost of living elsewhere which the structure is being repaired or rebuilt.
 
Your policy also covers your legal liability (up to policy limits) if you, members of your family or even your pets hurt other people or their property, not just in your house, but away from it, as well. Click here for more information on general liability coverage and umbrella policies.
 
When you insure your home, you are really insuring two distinct things:

• The structure of your home
• Your personal belongings
  

The Structure of Your Home:
There are three ways to insure the structure of your home:

• Replacement Cost. 
• Insurance that pays the policyholder the cost of replacing the damaged property without deduction for depreciation, but limited to a maximum dollar amount.
• Extended Replacement Cost. 
• An extended replacement cost policy, one that covers costs up to a certain percentage over the limit (usually 20%). This gives you protection against such things as a sudden increase in construction costs.
• Actual Cash Value. 
• This covers the cost to replace your home minus depreciation costs for age and use. For example, if the life expectancy of your roof is 20 years and your roof is 15 years old, the cost to replace it in today's marketplace is going to be much higher than its actual cash value.

Tips for Insuring Your Home to Value:

You should insure your home for the total amount it would cost to rebuild your home if it were destroyed. That's not the market value, but the cost to rebuild. If you don't have sufficient insurance, your company may only pay a portion of the cost of replacing or repairing damaged items. Here are some tips to help make sure you have enough insurance:

• For a quick estimate on the amount to rebuild your home: multiply the local building costs per square foot by the total square footage of your house. To find out the building rates in your area, consult your local builders association or a reputable builder. You should also check with your insurance agent or company representative. (Note: This is only an estimate and shouldn't replace annual coverage reviews).
• Factors that will determine the cost to rebuild your home: a) construction costs b) square footage of the structure c) type of exterior wall construction—frame, masonry or veneer d) the style of the house (ranch, colonial) e) the number of rooms & bathrooms f) the type of roof g) attached garages, fireplaces, exterior trim and other special features like arched windows or unique interior trim.
• Check the value of your insurance policy against rising local building cost EACH YEAR. Check with your insurance agent or company representative if they offer an "INFLATION GUARD CLAUSE." This automatically adjusts the dwelling limit when you renew your policy to reflect current construction costs in your area. However, you still should keep up with local building costs by checking in periodically with your local builders association.
• Check the latest building codes in your community. Building codes require structures to be constructed to minimum standards. If your home is severely damaged, you might have to rebuild it to comply with the new standards requiring a change in design or building materials. These generally cost more.
• Do not insure your home for the market value. The cost of rebuilding your home may be higher or lower than the price you paid for it or the price you could sell it for today.
• Most lenders require you to buy enough insurance to cover the amount of your mortgage. Make sure it's also enough to cover the cost of rebuilding.
• Advise your insurer and increase the limits of your policy if you make improvements or additions to your house.
  

Feel free to contact Bill Furtdado at Delaney Insurance Agency, Inc.  to get the answers and quotes you need.  You can also reach Bill Furtado at 909 - 481- 7222.