My thanks to guest author Nick Fransioli, a local State Farm Insurance agent. While getting homeowner’s insurance is an important part of the home-buying process, even reviewing your current policy – especially for items common for Old Farm – could prove to be very helpful.
Before you are able to close on your new home, your mortgage company is going to require homeowners insurance, or what they like to call hazard insurance. The mortgage company wants to have protection for at least the loan amount if something happens to the home right after closing.
Most mortgage companies will set up an escrow account for your homeowners insurance allowing the insurance bill to be paid to your mortgage company. So when you pay your mortgage, a portion of that payment is also for the insurance and taxes. Usually, your first year’s insurance premium will be due at closing and then all of the following insurance payments will be billed with your mortgage directly.
How much coverage do you need?
When you are looking to see how much coverage you need on your home, you may come across some discrepancies on what it means to be fully protected. For full protection, you need to be covered for the replacement cost: the amount that it is going to cost for you to replace the house from the ground up. Most insurance companies have a replacement cost tool that can help find what that amount would be for your home.
Don’t let the roof get you down!
The type of roof that is on your home is a major factor for your insurance. Most insurance companies offer large discounts if you have an impact-resistant roof. T-lock shingles, on the other hand, may keep you from getting coverage all together. Each insurance company is different regarding what they’ll cover, so I would recommend to tell your agent what type of shingles you have as well as the overall roof condition so the insurance company can cover it as best as possible.
Flood insurance is separate
One major misconception on homeowner’s insurance in the State of Colorado is coverage for flood damage. Homeowner’s insurance does not cover flooding. If you wish to get flood insurance you will need separate coverage through FEMA.
Try to maximize the discounts
Discounts offered by insurance companies are usually related to products or services that help prevent any claims, such as an alarm system or an impact resistant roof.
More lines of insurance with one company will also help reduce your costs. If you bundle your car and homeowners insurance, you will usually get a better rate.
Insurance policies are location-specific, so if you are planning on moving alert your insurance company right away in order to make the necessary changes.
What is covered?
The lists below include common coverage for homeowner’s policies, but please contact your insurance company for policy specifics.
- Weather Incidents
- Freezing temperatures
- Other Incidents
- Building tearing
Don’t forget: your mortgage company is going to require homeowners insurance before you reach the closing table. If you would like to learn more about homeowners insurance in Colorado Springs you can contact a local insurance agent:
State Farm Insurance Agent
Address: 5750 Palmer Park Blvd, Colorado Springs, CO 80915