When it comes to home insurance, there are a number of different options and it can be hard to figure out what type of plan would work best for you.
For example, is it better to go for a plan with a large deductible and lower premiums, or a plan with a lower deductible and higher premiums?
A recent article from realtor.com answered common questions to ask yourself when evaluating home insurance plans, including:
Where do you live?
Location plays a huge role in insurance pricing and what kind of plan you should opt for. For example, if you live in an area where there is a high likelihood of natural disasters—like hurricanes or wildflowers—you might opt to pay the higher premium, knowing that there is a likelihood that you may have to file a claim. However, if you live in an area that is not prone to natural disasters, you might opt for a plan with a higher deductible and lower monthly premiums.
Can I afford the deductible?
Before you commit to an insurance plan, it is important to look at the deductible and make sure that, in the event that you need to file a claim, you can cover the deductible. While it might be tempting to go with a high deductible/low premium plan which can save money on a monthly basis, you could find yourself regretting that decision if you can’t cover the cost of the deductible when your home incurs damages.
Can you switch later?
If you are stressed about what plan to go with, check in with your lender to see if it is possible to switch things up later. For example, if you are strapped for cash at closing, you might opt for a high deductible plan for the first year, and then switch to a lower deductible plan after the first year is up.
Bottom Line
Making these and other decisions around a home purchase can be stressful. Having a trusted advisor as your real estate professional can make all the difference before, during, and after the purchase. Let's connect. We can help!
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