Congratulations – you’re a homeowner! Buying a new home is SO exciting. Whether it’s your first house or your fourth, your primary residence or a vacation house, there’s no feeling quite like getting the keys to your new place.
After a long search (or even a short one), securing the financing and signing your name about five hundred times at the closing, it’s still a big thrill. Then there’s packing up and moving in, (then unpacking – less fun), maybe choosing a new paint color, buying some new furniture, a couple of TVs and some new electronics. It’s all so exciting.
In just a few days – well, maybe a few weeks – you can have a housewarming party and show off your new place to your friends and family. Big fun.
But when you get down to it, that $700 monthly payment turns out to be more like $1300 by the time you add in taxes and insurance. Taxes are required by the government (obviously), and insurance is required by the company that holds your mortgage, if you have one – because that’s who really owns your house.
So, let’s talk about homeowner’s insurance. It’s insurance, right, so it’s never as simple as “Oh, we’ll be careful, but if the house burns down, insurance will cover it.” But that’s what most people think, and that’s why it’s crucial to have a trusted insurance professional to make sure you have exactly the coverage you need and not just the coverage that’s required by the bank.
At P/L/R Insurance, President and Certified Insurance Counselor (CIC) Bill Lawrence says, “We work with each client to understand their individual situation and only make recommendations that will meet their specific needs.”
Many times, homeowners don’t find out that they’re underinsured until it’s too late. Your policy actually has to be written to cover “Replacement Cost” to make sure you have enough insurance to replace your home in the case of a total loss.
“At P/L/R, we run a ‘Replacement Cost Estimator’ for our clients,” Lawrence continues. “We want to be sure that if they need it, our policyholders get a settlement that will actually cover the replacement cost of their home. Each year, the total insured value of the home goes up to stay caught up with the pace of inflation (usually about 4%).
“Almost all our clients choose to add a special ‘Guaranteed Replacement Cost Endorsement’ to their policy. That means that even if we insure to 100% of the replacement cost and the costs to rebuild exceed that amount, their policy will cover whatever the actual replacement cost turns out to be.”
So – as long as you have the right insurance partner, your house will be covered for replacement value. Win!
But there are other things to consider, especially if your home is going to be unoccupied – for instance, if you’re a snowbird and live in Arizona or Florida for the winter months, your primary residence will be unoccupied. If you’ve been away for more than sixty days and your house is vandalized, for example, with most homeowner policies, your coverage is no longer valid because the residence was unoccupied. If you’ve moved to a new house and your former residence is still for sale, and no one is living there, you could have a similar problem.
Once more, it’s P/L/R to the rescue! If you know your home is going to be unoccupied, call the friendly P/L/R team and let them know you’re going to be away. We’ll work with our carriers to make sure you have the coverage you need. That way, you can bask in the sunshine all winter or settle comfortably into your new home, knowing your other house is covered against mechanical failure, vandalism, and even malicious mischief.