Congratulations! Making the decision to buy your first home is really exciting. Often times, these decisions come connected to other major life decisions like getting married or having children. However, more and more people are coming to the realization that investing money into your own property, instead of spending it on rent makes more sense long term.
Buying a home is a completely different ballgame from renting. You’ve got new bills, like property taxes, improvements, and repairs that you don’t have to worry about when you’re renting. It can get expensive! So, finding ways to save money becomes a huge priority for first-time homeowners. Whether you’re buying a condo, a mobile home, or a house, you’ll need to find insurance that will adequately protect your investment as well as your personal belongings while still saving money.
How much does first home insurance cost?
According to Value Penguin, home insurance rates typically range anywhere from $590 a year, to $2,000 in some of the more expensive states, with Ohio coming in at approximately $797 a year ($66 mth). It’s important to keep in mind that these rates reflect the average home insurance rates, which typically include discounts for the general population like age discounts, claims-free discounts, and in some cases, loyalty discounts.
For a first time home buyer, these discounts might not apply. That’s why it’s important to prepare and investigate your options to come out on top. The money you save on insurance costs could go into your mortgage or home improvements.
It’s also a good idea to talk to an insurance agent before you buy a home, as this could alert you to potential problems or high costs. At Briggs & Williams Insurance Agency, we’ve seen our share of claims and we have access to insurance company ratings in various areas.
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What can make my home insurance more expensive?
If you’ve made claims under a previous insurance policy like a renters policy, this would render you ineligible for the claims free discount which might cause you to pay significantly more on home insurance.
If you have a car and choose not to take advantage of bundling your home and car insurance, you’ll end up paying more for home insurance. Evaluate the total cost of both policies with the same insurer. Sometimes your car insurance cost may be more expensive with your home insurer, however, the discount you will get by bundling may make the total cost of your insurance less. Remember to be strategic and use all your insurance to negotiate.
If you never had previous insurance on a residence or if you have had a gap in your insurance history, it could cost you. Insurers like to see when someone has held consistent insurance with few gaps. So, get insurance when you can, and keep it.
If your home is in an area with lots of claims, such as a high crime area or if it’s in a flood zone. It makes sense. The greater the risk that you’ll file a claim, the higher your cost will be. You’ve probably experienced this with your car insurance as well.
How can I save money on home insurance?
Now that we’ve looked at some of the reasons you might pay more for insurance, let’s look at some ways you can save. There are several ways that you can take action before you ever purchase your first home that could save you hundreds of dollars.
Don’t wait until the last minute to purchase home insurance. There’s a lot more to home insurance coverage than just signing up for a policy. By waiting, you’ll be limiting your options. People tend to feel pressured to make a choice quickly, and therefore won’t give enough attention to the details, such as the coverages they’re actually purchasing. Do not put yourself in this position.
You should always get an insurance quote before you buy. This is because your quote will be based on building or dwelling value. Some new homeowners are surprised to find the real estate value of their home is not always the same as the dwelling value. This can cause unnecessary surprises, costs or issues.
The cheapest isn’t always the best option. When people choose insurance just because it’s cheap, they often don’t look into how they will be paid in a claim. They forget about the insurance once they’ve moved into their new home, and then when a claim happens that’s when they end up paying the most.
Another thing to consider is that Insurance policies take into account personal information in order to establish a cost. Your age, credit rating, profession, and other personal choices in what kind of insurance you choose. While the above tips can help you save big, it’s always smart to get a home insurance quote before you close the deal.