Home Owners Insurance?

[Amythyst]

Hi, we are supposed to close on our new home build next month and I know I am required to get home owners insurance...but as someone who has never owned a home before, what the heck kind of coverage do I need and should I get? 

We live in Northern VA and don't really have a great number of "natural disasters", unless of course they have insurance for potential bullseye for terrorist attacks!  

But, all the questions that the online quotes ask me are so confusing.  It also has this thing about the dwelling cost... what it would take to replace my home.  Would this just be the price that I am paying for it?  Should I wait and get homeowners insurance until the appraisal is done?  I keep getting varying numbers on this from 418000 to over 550000... is it wise to get higher deductibles to keep costs down?  Is it ok to go with the lowest liability coverage?  Do I need to add on computer and jewelery coverage?  Sump pump coverage?

Also, we plan on getting an ADT burglar system... is this something I can include in the quote even if we haven't done it yet? 

Thanks in advance.

[foofighter74]

Your lender may be specific about what your max deductible can be. But you will need to insure the home for more than what you are paying for it. Most people are under-insured...costs rise, and to completely rebuild will be more than most people think. 

You can make up your own mind about extra coverage - including sump and jewelery...as for liability, again, that's up to you.  Your lender will specify, but basically, you need an insurance policy covering, in most cases, your mortgage loan balance.  This will be fire insurance, and possibly flood insurance depending on how FEMA has classified the area where you are building. Again, your lender will tell you what is required. In fact, your loan officer may actually speak to your insurance agent directly (go with who you insure your car through, as this will be the cheapest and easiest.  Unless it's Geico or some other cut rate insurance company.  It's probably fine for cars, but not for a house.).

As for the security system, you can't include it if it's not installed.  However, once it is installed, feel free to call your insurance company back.  They can adjust as needed.

They'll ask you how many corners your house has...square feet...internal upgrades that will cost more to replace, etc.  Their computer software will essentially spit out an amount based on your info anyway.

[austinguy907]

i would shop around using site like www.answerfinancial.com which will allow you to get simultaneous quotes from multiple insurers.  also, with recent activities you might want to look into getting a flood policy just in case.  when it comes to insuring the physical property you want to calculate the cost to actually replace the structure with all new matierials rather than the loan amount.  most mortgage companies only require insurance up to the loan amount which is inadequate unless you're building a new home.  you'll also want to make sure that your policy covers replacement value on your household items rather than ACV which is the depriciate value of your household item replacement costs.  you can get discounts for multiple items such as pay in full (escrow), multi policy home + (car, life, motorcycle, boat, anything else they can insure), claim free, deadbolts/fire extinguishers/alarms/etc., the list goes on and on for discounts  AAA / AARP / royal bloodline  (jk)  

here in Dallas i have a policy on my condo through Allstate because they offer not only the best rate but, also include that vital replacement value coverage that most companies charge an arm and a leg for.  also, for some reason here in Dallas most insurers quote for a mold Rider that adds hundreds of dollars per annum.  

[mlanca83]

Hi! I work in insurance. It can be a little overwhelming but the posts above have good points for you. I would say go to an independent agency they will offer more carriers and can shop for the best rate for you. They will take all the info about the house and do what's called a replacement cost estimate to let you know what you should have the dwelling covered for. I never insure a basic home for less than $125 a square foot and that is bare min. If you have granite and such go higher but to get a rough estimate take your square footage under air and times it by $125. Some companies let you schedule or add expensive items to your policy with an appraisal. I do suggest water backup being added on every policy as well as increased limits for mold. Those water and mold claims get very pricey. Let me know if you have any other questions and good luck.