Start looking for insurance immediately after you execute a contract. If you stop reading now, start the insurance early and you’ll likely avoid the vast majority of potential problems.
Buying a home can be IS a stressful time. Between answering sensitive application questions, document hunting, packing, inspections, disclosures, appraisals and more, it can be overwhelming; especially if this is your first house. Often, one of the biggest hang-ups for buyers comes when they discover an issue while finalizing their insurance. Of course, this usually happens within 10 days of closing and THE most stressful time possible. The rate goes up, there’s a storm coming, the inspection has issues, the coverage changes, and worse. While it’s impossible to predict and avoid every possible issue, there are ways to help avoid some of the most common problems.
1) Start getting your insurance quotes immediately after you get an executed contract. Insurance rates and requirements for coverage can vary widely from property to property & company to company. The sooner you start talking to an insurance agent, the sooner you’ll get an idea of the potential requirements and costs. Also, you can then update your good faith estimate, order the necessary inspections, and overall make sure the property (and payment) still works for you. Getting started on the insurance as early as possible can save you time, money, and unnecessary stress.
2) Make sure you answer ALL the questions the agent asks you as completely as possible. The more information, the better. If an answer to a question really isn’t a simple yes/no, talk about it and give details. Especially since what you don’t volunteer may very likely come up at the most inopportune moment (like right before or even after closing – YIKES!). If you think the property or situation is unusual or important, good chance the insurance company will too. Getting a ‘quote’ should be a conversation, not just a barrage of yes/no questions and a price. Your largest investment is worth it.
3) Ask lots of questions… Lots. Things like, “Are there other coverages you may recommend beyond what you’ve quoted me?” Or, “Why do you prefer this company over another?” Or my personal favorite, “Other than price, what should I consider when choosing an insurance company and combination of coverages?” If you hear crickets when you ask any of those questions, you should probably keep looking.
4) Be clear with the agent what you want. If you’re looking for the cheapest coverage you can find, say so. If you’re concerned about the stability of the company or want to make sure you’re not missing important coverages, let your agent know. There are dozens of limitations and exclusions which can be included if you talk about it. That discussion alone can be the difference between a $1,000 check and a $20,000 check if all your jewelry is stolen and you have the standard $1,000 limitation. The more you talk with your agent about what you want, the better a job they can do of making sure you get it.
5) ASK TO COMPLETE THE INSURANCE APPLICATION EARLY AS POSSIBLE. It’s important to make a decision on the coverages and company early and make sure your agent knows your decision. Then ask, “What else do you need so we can complete an application & bind coverage?” By doing this, you trigger the agent to ask any remaining application questions and tell you what else is needed so they can issue you a “Binder” or “Evidence of Insurance.” If there is any important information which might change your price, coverage, or impact your ability to get coverage, it should come up while completing the application. This way, if there is a problem, you have 3-4 weeks to resolve it instead of 3-4 days before it starts holding up your closing, causes you stress, and potentially costs you money in rate lock extensions, contract deadlines, and more.
The insurance protecting your largest investment should be a conversation which starts early. It will help the exciting time of home buying be less stressful and more fun.
Article submitted by Allen McGinniss
Michael Himmel & Allen McGinniss
VanAllen Insurance Agency
2120 Killarney Way
Tallahassee, FL 32309