Are you buying a home for the first time and wondering about your homeowner’s insurance?
As we all know the mortgage application process has become much more regulated and difficult over the years. One of the things that is required before your loan is closed is getting homeowner’s insurance.
With this mortgage process being so time-consuming and lengthy we try to make the homeowner’s insurance process the easiest part of it.
Here is a First Time Home Buyer’s Guide to Homeowner’s Insurance.
Basic Coverages to Homeowner’s Insurance
Dwelling Coverage: This is the dollar figure the Insurance company will pay out if the home is ever completely destroyed. It is important to note: this is not the same as the purchase price! The replacement cost dwelling coverage number is based on the square footage of the home. Sometimes when buying a home, your purchase price can be inflated by paying for acreage or a good school zone. Neither of these things have anything to do with the cost to rebuild your home. This is why the replacement cost dwelling coverage will be based on the square footage. It is important to make sure your dwelling coverage includes replacement cost. If it does not, your dwelling coverage will depreciate over time and the home that is rebuilt for you will not be identical to the home you previously had.
Other Structures: This dollar figure is usually 10% of the dwelling coverage. Other structures coverage will cover anything that holds value on the property that is not attached to the home itself. Examples include: Detached garage, driveway, fence, shed, deck, storage unit.
Personal Property: This dollar figure will usually be 50% of the dwelling coverage. If turned your house upside down, anything that would fall out of it is personal property. Examples include: Artwork, jewelry, laptop, television, firearms, furs, all of your personal things that hold value on the property. It is important to make sure your personal property has replacement cost coverage as well. This way, if any of your personal property is destroyed it will be replaced at its current market value.
Loss of Use: A better term for this coverage is temporary living expenses. If your home is ever out of use, meaning that for example, a storm damaged your home, you have contractors doing repairs, and in the meantime, you and your family had to live off-site. The insurance company would use this money to pay for your living expenses such as hotel bills and food until you move back into your home.
Personal Liability: This coverage will cover you if anyone ever tried to sue you for something that happened on your property. For example, a guest injured themselves, they think your negligent and they want to sure you. If you are found guilty you will not be responsible for any of those payments up to the dollar amount of this coverage. At Thompson Insurance we recommend at least $300,000 for this coverage. To bump this coverage from $100k to $300k it is usually only $5-$10 a year. Totally worth it.
Deductible: The way the deductible works is you will not have to write a check for it. The deductible does not come out of pocket. When you file a claim, the insurance adjuster will estimate your repairs and the insurance company will write you a check for that amount minus your deductible.
These are the important factors to know about Mississippi Home Insurance. Buying a home can be overwhelming but, don’t let the insurance be the part that overwhelms you. Find a trusted insurance agency that prioritizes home insurance and let them advise you on the process. That is how we operate at Thompson Insurance.
How to Start Your Quote
Every person is unique and therefore requires a carefully crafted policy. Good news, our Agency offers custom tailored insurance proposals to ensure you get covered properly but don’t pay more than you have to.
If you’d like us to review your current policy and provide you with no obligation quotes, call our office, or see our Quotes page to get the process started. Either way, we make the process super simple!
We serve the North Mississippi area, including towns like Olive Branch and Southaven, including Desoto County, Tate County, and Lafayette County.
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