Real Estate Secrets: The Inside Scoop On Homeowner's Insurance

One of the most important concerns when purchasing real estate is the availability and cost of good homeowners insurance. While new homeowners don't like to think disaster could ever strike their home, there is always a chance that something bad could happen. There are many things that could go wrong with your newly acquired home, such as a malfunction due to structural defects, a fire or an accident that could wipe our everything you ever owned in a blink of the eye. The best way to protect yourself against such situations is through a homeowners insurance policy.

What Is Homeowners Insurance?
Homeowners insurance is coverage designed to protect you from mishaps that happens with your home, including the building and its content. Typically, homeowners insurance covers problems that arise from things like burglaries, fires, natural disasters, and more. Most policies also cover the homeowner for legal charges that might arise from individual injuring themselves on the property.

The Features of Good Homeowners Insurance
All homeowners policies are not created the same. Make sure that the homeowners policy that you select provides adequate coverage before you make a final decision.

Full Coverage
Ensure that you have complete coverage when you take the homeowners insurance. You should be insured for the things you own (everything that is inside your home) and outside (structural part of the real estate property). In this way, no matter what happens, you are always covered. It is in your best interest in most cases to select a policy that offers replacement value coverage, rather than depreciated value.

Additional Living Expenses
In case your real estate property is destroyed by any type of accident, you will need to pay for some kind of accommodations until you find another place to live. You would have to stay at a hotel or guest house where the living expense would double or triple. Ensure that your homeowners insurance covers such expenses as well.

Third Party Liability
There are often possibilities of someone suing you for a reason such as that they fell on your premises and injured themselves. When this happens, you might find yourself legally responsible for paying medical expenses plus compensation. A third party liability policy would have you covered for such eventuality.

Price and Benefits
When you plan to take out homeowners insurance, shop around! Get as many quotations as possible and find out what extra benefits they offer for each quote. Research extensively to get the best quotes from different leading insurance brands. Remember, knowledge is power. This information will help you bargain for the best terms when you take out the homeowners insurance.

Do not rush when you are shopping for homeowners insurance. By shopping around and doing proper diligence, you will be assured of the best coverage at the lowest possible price. Keep in mind that if you find a deal that sounds too good to be true, it probably is. Work only with reputable insurance providers that you can count on to be there for you when you need them. Take your time, gather sufficient information and only when you are fully satisfied, close the deal.

Flood Insurance For Your Home Or Real Estate Investment

Given the recent hurricane and flooding disasters in the country, homeowners, real estate lenders, and insurers are giving flood insurance a lot of attention. There are some basic questions you should ask, and facts you should know about flood insurance, before making any real estate purchase. A great resource for any related questions is the government sponsored flood insurance website at http://www.floodsmart.gov .

First off- if you have a federally backed mortgage, you are required to have flood insurance in high-risk areas. Also, lenders may require flood insurance on real estate properties in high-risk areas. If it’s not required, but the responsible thing to do in your area, here are the basics.

What Do You Get From Real Estate Flood Insurance?

Basic homeowner’s insurance won’t cover flood damage for real estate structural loss, furnaces, water heaters, air conditioning units, carpeting and flooring. Flood insurance does that. You can purchase additional flood insurance for furniture and personal items. The coverage is fairly inexpensive- visit the government website for an estimate based on your real estate holdings.

Don’t think you’re at risk? The NFIP (National Flood Insurance Program) reported that a third of the payments it made last year were to real estate properties in “low-risk” communities. In the course of a 30-year mortgage, your home has a 26% chance of being damaged by a flood (according to NFIP statistics). Your fire risk is only 9%. Having NFIP approved flood insurance guarantees your claim is backed by the government. Knowing that, what questions should you ask before making a real estate purchase?

Questions to Ask Before Buying Real Estate

In addition to the government sponsored website, your real estate agent and your insurance agent should be able to answer some basic questions regarding your chosen property.

• What is the property’s flood risk?
• Does the area participate in the NFIP?
• Is flood insurance required on this property by the lender?
• Is the property near a dam, or levee?
• Does the current real estate owner have flood insurance?

You may also want to ask your insurance agent about a Community Rating System (CRS) discount on your real estate property. Find out exactly what the policy covers, and what additional coverage is available. Finally, ask about premiums for higher deductibles, and associated fees and expenses.

Congressional Issues Affecting Flood Insurance

In June the National Association of Realtors (NAR) testified before the House Subcommittee on Housing and Community Opportunity to support H.R 1682, the Flood Insurance Reform and Modernization Act of 2007. Vince Malta, vice-chair of the NAR’s Public Policy Coordinating Committee said, “To maintain the vitality of residential and commercial real estate, certain safeguards must be made available such as the federally backed flood insurance through the NFIP.”

Reforms to the NFIP are expected to be ongoing as the real estate community, insurers, and government agents come to a consensus on the best ways to protect real estate investors and homeowners.