| Hi Taylor
- My husband and I are deep into the process of buying our first home
and we're looking into the insurance part of it. I find the whole
thing pretty daunting and was wondering if you have any tips. - Eileen
Hi Eileen - Congratulations on the new house! Purchasing a
house is a huge decision and unfortunately it isn't as cut and dry
as we all wish it could be. Insurance is one of those things that
makes the process difficult and detracts from some of the fun, but
it's a necessary evil. Here are a few things to think about that will
hopefully help you along and make sure you're well covered.
deductibles. In the early going, when you're looking between
different possible insurers, comparing deductibles can help narrow
the field. Higher deductibles will mean lower premiums, but lower
deductibles will make a big difference when you really need the
coverage to kick in. Looking at different providers, see what
deductibles are available and then, with those numbers in mind,
see how much you can realistically afford in premiums. I think
you'll end up with better coverage if you think about the deductible
first and the premium second because you're less likely to go
with the most basic option.
2. Replacement versus cash value. In the event of a loss,
you have the option to collect in either replacement or cash value.
Actual cash value pays out the depreciated price for your home
and possessions, so this option usually comes out to be less than
the replacement cost. Because of this, insurers prefer and typically
offer lower premiums for the cash value option. If you meticulously
detail and document everything in your home, this could be a good
option since you'll have a better chance of getting adequately
compensated for lost property and possessions. Again, this will
come down to what you feel you can afford each month and how you
personally value your property.
3. Consider bundling. If you already have car insurance
and you feel like your provider takes good care of you, bundling
home insurance with that same company might offer you the best
savings. Two policies are better than one in the eyes of the insurer,
so you stand to get a pretty nice discount on your premiums. There
are pros and cons that come with bundling, and I've laid those
out in more detail in a post on GoFarWithKovar.com. My main advice
is to bundle with caution and don't get too excited when you see
a huge discount.
tricky but important. As long as you do your homework and shop around
you should be able to get what you need. Keep asking questions and
good luck with the new home!
Kovar June 18, 2019
More "Go Far With Kovar"
Information presented is for educational purposes only and is not
an offer or solicitation for the sale or purchase of any specific
securities, investments, or investment strategies. Investments involve
risk and, unless otherwise stated, are not guaranteed. Be sure to
first consult with a qualified financial adviser and/or tax professional
before implementing any strategy discussed herein. To submit a question
to be answered in this column, please send it via email to Question@GoFarWithKovar.com,
or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.