Home Insurance Tips

for New Home Buyers:

• What is the "Hazard Insurance" that our mortgage bank is requiring? For most situations, the "Hazard Insurance" coverage will be provide by a Homeowner's Insurance policy. The mortgage bank's concern is with the protection of their collateral (your house) from hazards of fire, lightning, tornado, etc. Your Homeowner's Insurance policy includes coverage for these risks on your house but goes well beyond the banker's requirement to include coverage for your possessions, loss of use and more.  

• What other insurance is being required? Your mortgage bank may also be requiring Flood Insurance if your house is in a "Special Flood Risk Area." If your new house is located along the Texas Gulf Coast, your mortgage bank may also be requiring Windstorm Insurance.

• How much insurance does our new house need? The mortgage bank is looking for enough insurance to cover the loan. Often, a higher or lower amount of coverage is more appropriate. Your purchase includes the land, site improvements (fenses, driveway, etc.) and your house. Figuring out a reasonable amount of insurance for the house is part of our job. Having an adequate amount of insurance to rebuild your house is important. At the same time, too much insurance is not a good value.

• Why is buying your home insurance from a professional important? Buying home insurance is far more than just meeting your mortgage hazard insurance requirement. Getting the right amount of insurance for your house, ample to rebuild but not more than is needed, is critical. An insurance professional can guide you to appropriate contents coverage and liability protection. While neither is a mortgage requirement, it is still important to you as the homeowner.

• How can I reduce the cost of my Home Insurance? Cost is important on any purchase including insurance. Buying a companion auto policy from the same insurance company often provides a 10% discount on both insurance plans. Choosing a higher deductible is a trade-off in risk but can reduce insurance cost. Other discounts may be available.