Property insurance, also known as homeowner’s insurance or hazard insurance, is purchased for the purpose of covering a property in case of loss or damage, and it is essential in most cases as all mortgage companies require aspiring homeowners to purchase property insurance on a home. There is a wide array of available policies in this regard, offering different packages, and covering a variety of expenses – e.g. the cost to replace the home, items inside the house, etc. If you are an aspiring home owner, it is essential for you to estimate this cost, so you can plan your home-buying budget more effectively.
- Start by estimating the value of your home, as this is typically what property insurance is based on. An estimated property value can be found through Zillow, Yahoo Real Estate, and other such online databases. You can also ask your real estate agent to draft a market analysis on the house, in the case of a new home purchase.
- Next, you may move on to calculating the estimated property insurance value. A general rule in this regard is that the cost of a property is around 0.5 percent of a home’s value. To obtain an estimated property insurance value, multiply the value of your house by 0.5 percent.
- Speak to a couple of insurance agents – look for the more reputable insurance associations, and request quotes from the most experienced and reliable insurance agents, in order to find the best, most affordable insurance policy. Ideally, this should be a policy that is reasonably priced, and which offers you the maximum amount of coverage.
- Look into the possibility of availing multi-policy discounts. If you purchase property insurance, life insurance, and auto insurance from the same agency, some insurance agents might be able to secure you a discount, so make sure you ask your agent about this when looking for policies. This will significantly bring down the cost of insuring your property.
- There are certain hazards or incidents which are not covered in a standard insurance policy. If there is something specific which you wish to be covered against, and which is not listed in your regular basic homeowner’s insurance policy, consider purchasing extras (e.g. such as earthquake or hurricane insurance, if you live in an area which is susceptible to these disasters). Make up a list of the extra coverage you require (depending on where you live), and discuss this with your agent before you go ahead and purchase it.