Home buyers often think that all of their hard work ends once their offer on a home is accepted. While it would be nice to believe that everything from your offer being accepted through closing is rosy, the truth is a bit different. That is because there are a lot more hoops to jump through before home ownership becomes a reality. For one, you have to secure a home insurance policy. This might not sound difficult, but if you don’t get a head start on your policy search, you may find that you can’t get one at all. Below we’ve outlined why home buyers win when they plan ahead for homeowners insurance.
Get a C.L.U.E.: The Comprehensive Loss Underwriting Exchange report is a claims-information report that is generated by a consumer-reporting agency. Containing up to about seven years of personal-property claims history, this report can reveal quite a bit about the history of claims at the property you’re looking to buy. If the current owners have filed quite a few claims during their ownership, especially claims related to water damage, an insurance agency may be less likely to grant you a policy. Only the homeowner can get their own claims report, so you’ll want to request this from the seller. Additional things to look for on this report include patterns that suggest risk of future claims, such as several break-ins. These patterns don’t necessarily mean that your application will be rejected by an insurance agency, but you may get charged a higher premium. Being aware of what is in a CLUE report so that you have time to shop around for the best policy for your money is vital when it comes to owning a home.
Start Shopping Early: In the past, it was relatively easy to simply call up your insurance agency and be given a homeowners policy in just a few days. Sometimes you still can, but in most cases processing your request takes time, paperwork, and a lot of questions. Begin looking for an insurance company as soon as your offer is accepted. In most cases, this means you have a couple of weeks to line everything up and work out any problems well before the closing date. Remember to inquire about bundled policies, such as home and auto, which could save you more money than if your policies were with separate companies.
Keep Track of Your Credit: Good credit isn’t just necessary for purchasing a home–you also need to have good credit to be granted an insurance policy. A lot of insurers actually run your credit history before they are willing to issue a policy. What’s more, poor credit indicates that you’re actually at a higher risk to file a claim. Ultimately, this could lead to a rejection of your request for a policy. Don’t let this happen to you. Keep track of your credit with a credit tracking tool or by running credit reports for yourself regularly. Check your report for errors and work to clear up any issues that your credit report indicates.
When you get started early searching for an insurance policy, you’re much more likely to find success. Follow the tips we’ve outlined above, and you should have a much easier time finding a policy that works for your family and your new home. If you’re not sure where to begin your insurance agency search, speak to family or friends that you trust and gather their recommendations.