When buying a home, most people focus on the offer, inspection, appraisal and mortgage. But there’s another important piece that can affect whether you make it to the closing table:

Homeowners insurance.

If you’re financing your purchase, your lender will generally require acceptable homeowners insurance before closing. And not every property—or every buyer—will receive the same coverage or premium.

That’s why I encourage buyers to start investigating insurance early in the process, rather than waiting until a few days before closing.

When Should You Start Shopping for Insurance?

Once you’re under contract, contact insurance professionals promptly and begin obtaining quotes.

You don’t necessarily need to wait until the inspection is completed to start asking questions. Starting early gives you time to compare coverage and address potential problems without creating a last-minute closing emergency.

What Does Homeowners Insurance Generally Cover?

Coverage varies considerably by policy, but a standard homeowners policy commonly includes protection involving:

• The home’s structure
• Other structures on the property
• Personal belongings
• Personal liability
• Certain additional living expenses if a covered loss makes the home temporarily uninhabitable

Never assume something is covered. Ask the insurance professional to explain the policy, exclusions, deductibles and coverage limits.

Your Monthly Payment Isn’t Just Principal and Interest

When budgeting for a home, buyers sometimes look primarily at the mortgage principal and interest.

Your actual housing expense may also include:

Property taxes + homeowners insurance + HOA fees, when applicable + mortgage insurance, when applicable.

If your insurance premium is significantly higher than anticipated, your monthly payment could be higher too.

Know the numbers before closing, not afterward.

The House Can Affect the Cost of Insurance

Insurance companies evaluate risk, and characteristics of the property can influence both availability and cost.

Depending on the insurer, factors may include:

• Age and condition of the roof
• Electrical system
• Plumbing
• Heating system
• Property location
• Prior claims associated with the property
• Replacement cost
• Certain property features
• Proximity to particular hazards
• Other underwriting considerations

This is another reason your home inspection and insurance process can overlap.

An older roof, for example, isn’t simply a future maintenance expense—it may also affect insurance options.

Your Insurance History Can Matter Too

Insurance pricing isn’t based solely on the house.

Insurers may consider various factors permitted by applicable law and their underwriting guidelines. That means two buyers purchasing similar properties could potentially receive different premiums or coverage options.

When comparing quotes, make sure you’re comparing similar coverage, not simply choosing the lowest premium.

Understand Your Deductible

The deductible is the amount you’re generally responsible for paying toward a covered claim before insurance pays according to the terms of the policy.

A higher deductible may reduce the premium, but it can also mean more out-of-pocket expense if you have a claim.

Ask whether your policy has different deductibles for different types of losses, such as wind or other hazards.

Flood Insurance Is Different

This is extremely important:

A standard homeowners insurance policy generally does not cover flooding.

A property doesn’t necessarily need to be directly beside a river or lake to experience flooding.

Buyers should investigate the property’s flood risk and determine whether separate flood insurance is required or appropriate. Your lender may require flood insurance for certain properties and loan circumstances.

Ask About Replacement Cost

Don’t assume the amount you paid for the property is the same amount it would cost to rebuild it.

Market value and replacement cost are different concepts.

The land, location and market demand influence what a property is worth, while rebuilding cost involves construction materials, labor and other expenses.

Ask your insurance professional how the dwelling coverage amount was determined.

Don’t Choose a Policy Based Only on Price

The cheapest policy isn’t necessarily the best policy.

Compare:

• Coverage limits
• Deductibles
• Exclusions
• Replacement-cost provisions
• Personal-property coverage
• Liability protection
• Available endorsements
• Claims service and insurer requirements

Saving a few dollars isn’t much of a bargain if you discover after a loss that you don’t have the coverage you expected.

Tell Your Insurance Agent About Special Features

Does the property have a swimming pool, detached building, wood-burning stove, older roof, rental component or other unusual feature?

Mention it.

The insurance professional needs accurate information about the property to determine available coverage and provide an appropriate quote.

What About an Airbnb or Short-Term Rental?

This deserves special attention.

If you’re purchasing a property that you intend to use as an Airbnb, vacation rental or other short-term rental, don’t assume a traditional owner-occupied homeowners policy will provide the protection you need.

Tell the insurance professional exactly how you intend to use the property and ask about appropriate coverage..

MARLENE BERNASCONI
Principal Broker | Instructor
Residential | Commercial | Relocation
Weichert Realtors, Saxon Clark – Johnson City, TN
Johnson City Chamber Ambassador
📱 423-444-4360 Cell (Preferred)
📞 423-342-3600 Office
📧 RealEstateByMarleneB@gmail.com
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