Buying a home for the first time can be an overwhelming experience, especially when it comes to navigating a crazy Colorado market AND the world of insurance. Some insurance terms might seem foreign, but we are here to make insurance jargon easy to understand so you feel less intimidated and more empowered.
Terms Every Home Owner Should Know
Actual Cash Value (ACV): Actual Cash Value is the amount you would receive if you replaced your damaged or destroyed item with an item of similar age and condition. This value takes into account depreciation and wear and tear.
Deductible: The deductible is the amount you pay out of pocket before your insurance company covers the rest of the cost of the claim. For example, if your deductible is $500 and you file for $1,500, you will pay the first $500, and your insurance company will cover the remaining $1,000.
Endorsement: An endorsement is an add-on to your homeowner’s insurance policy that provides additional coverage for specific items or situations. For example, you may need an endorsement for high-value items like jewelry or artwork.
Escrow: An account your mortgage lender creates to ensure that insurance, property taxes, and other expenses are paid on time. The homeowner does not manage this account.
Flood Insurance: Flood Insurance is a separate policy that covers damage caused by flooding. Homeowner’s insurance typically does not cover flood damage, so purchasing this coverage separately is essential if you are in a flood zone.
Homeowners Insurance: Homeowners insurance is a type of insurance policy that provides you with financial protection in the event of a disaster or accident involving your home. This coverage protects you, your home, and your personal property from damage or accidents.
Liability Coverage: Liability coverage protects you legally and financially against claims alleging damage or injury to someone else or their property. This coverage could pay for legal fees, medical bills, and other damages.
Perils: Perils are specific events covered by your homeowner’s insurance policy. A few common perils covered in a basic homeowners insurance policy are fire, lightning, theft, hail, falling objects (ex: trees), and freezing weather.
Personal Property Coverage: Personal Property Coverage protects your personal belongings, such as furniture, clothing, and electronics, if they are damaged or destroyed. This coverage tends to cover all common perils.
Premium: The premium is the amount of money you pay for your homeowner’s insurance policy. You can pay it in monthly, quarterly, or annual installments.
Replacement Cost Value: Replacement Cost Value is the amount it would cost to replace your damaged or destroyed personal property with a new item of similar kind and quality. This value does not take into account depreciation and wear and tear.
How To Find The Right Insurance
So now that you know a little more about homeowner’s insurance and some of the coverages you will be looking for, how do you find the right policy for your new property? Once you find the right home, getting coverage that protects your most valuable asset is important.
Your coverage options will depend on the type of property you are purchasing – townhomes and condos require different coverages than single-family homes.
Here are our top tips on how to find the right insurance for you:
- Research different insurance companies
- Get multiple quotes
- Understand your coverage needs
- Consider bundling policies
- Don’t cut corners on coverage
- Ask about discounts
- Read and understand your policy
To fully understand your coverage needs, you will want to assess your home’s “inventory.” This includes estimating the value of your clothing, electronics, jewelry, etc.
If you follow these tips and find a trusted insurance professional like us to help you along the way, you will get the coverage you need at the best price available.
Why Work With Hamilton Insurance Partners
We are insurance brokers – not agents. As insurance brokers, we are independent and represent many different insurance companies. This allows us to work exclusively for our customers, not an insurance company. Because of this, we can find our customers the best coverage and premiums to meet their needs.
An insurance agent typically represents a single insurance company – that insurance company employs them and only sells their products. Here are some benefits of working with an insurance broker:
- We work for you – instead of being employed by an insurance company, we are employed by YOU. Our job is to get you the best coverage possible, not add to an insurance company’s bottom line.
- Brokers can provide more specialized coverage easier than agents can – if you have a historic home or classic car that requires a specific policy, chances are a broker will have more success finding you that policy at the best price.
- Brokers can help you navigate claims more intimately than an agent can be working directly with the insurance company on your behalf.
- Brokers can save you time and money. They have industry knowledge and expertise to shop coverage for you with many different insurance companies to help you find coverage that fits your needs and budget.
If you are a first-time home buyer navigating this crazy Colorado market and need a trusted insurance broker, contact us today so we can help you protect your dream!