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Insurance, Inspection, Title, and Maintenance

You have found the place, that special place! It might be a bungalow, cottage, penthouse, townhome, two story cape cod, or a rambler, and to you, it is HOME! A home is typically the largest purchase someone will make in a lifetime. Over 70% of homeowners believe it is also their largest investment, so protecting and taking care of it becomes a top priority. How do you protect this asset you call home?

Four words sum it up: Insurance, Inspection, Title, and Maintenance.

Insurance Basics

Homeowners insurance is a must have, by far the most important protection money can buy. Before you begin shopping for your insurance, understand these basic terms: Premiums, Deductible, Coverage, and Claims.

Typical components of a policy are Dwelling, Liability, Personal Property, Loss of Use, and Medical Payments. Breaking cost down by component within your policy helps you
understand exactly what you’re paying for and how pricing/coverage compare between different insurance companies. Knowing about optional add-ons and the value they bring is important to consider before purchasing them.

I spoke with Huy Ngo of HKN Insurance Agency for his recommendations. He has been an agent for over 21 years. First, he recommends you meet with your local agent and build a relationship. If you ever have a claim, your agent will be by your side to assist you any way they can. Next, Mr. Ngo says within your policy, Dwelling and Liability are the two main components to have coverage calculated correctly because having the right amount of coverage is especially important.

The Dwelling component covers the cost to rebuild your home. The coverage amount should not be calculated on market value which includes the lot, but the actual cost to rebuild your home. This amount can change over time as building costs increase or decrease. He adds with an HO3 package on your policy, it includes the extended replacement on the dwelling, a powerful addition for a very slight premium increase.

The Liability component covers injury to others or other property. Mr. Ngo recommends a minimum of $300,000 rather than the standard $100,000. The additional cost is nominal and strengthens your overall policy.

Additional Policy Components

Additional components of a homeowners policy include Personal Property, Loss of Use and Medical Payments. Mr. Ngo reminds us that many homeowners are unaware that the Personal Property coverage also typically includes personal property coverage while traveling and/or loss outside of your home. Loss of Use and Medical Payments are typically a standard calculation of coverage. Adding a floater to your policy to cover items worth more than the maximum replacement amount in your policy such as jewelry, art, antiques, firearm collections, etc. is available.

Finally, Earthquake and Flood Insurance are available. Mr. Ngo’s advice when considering purchasing these additional insurance policies is to think about the geographical location of your home and the amount of equity you have in your home. Your professional insurance agent can give you more guidance to help you sort out whether these insurance policies are right for you.

Negotiate Your Discounts

I recommend not being shy about asking for premium discounts such as bundling home and auto, high credit score discounts or having a higher deductible, etc. And a note on home renovations and insurance–consult your insurance agent before you begin so you understand how the renovation will affect your insurance premiums. Some improvements may increase the cost, and some may decrease the cost, but you will want to know first. Typical renovations are a new addition, building a pool, adding a deck, renovating a kitchen, finishing the basement, or redoing the roof.

Inspection

Before you sign on the dotted line, order a home inspection. Knowing what repairs should be managed immediately and which ones can wait is important. Ignorance is not bliss in the case of home repairs. You want to know.

Title

Consider consulting an attorney regarding how to title your home. Titling property, other than in personal names, can potentially protect a homeowner from lawsuits and liability and even potential creditor claims later.

Maintenance

An ounce of prevention is worth a pound of cure.” – Benjamin Franklin

Performing regular maintenance is a wonderful way to protect your assets. Five suggested maintenance items are:

  1. Roof repairs to avoid water damage.
  2. Water and plumbing leaks to avoid further water damage.
  3. Appliances, including furnaces and air conditioners which need filters replaced on a regular basis.
  4. Clear rain gutters annually.
  5. Keep up on exterior repainting.

Deferring maintenance is tempting however it can potentially be more costly in the long run. Regular maintenance helps extend the life of your home and retains its value.

Your home is not just the place you live, it is your investment and key to wealth building. Protecting that investment can provide you peace of mind, and peace of mind is priceless. We are always here if you need us after you buy your home.

From the thrill of being a first time home buyer, or finding a perfect space for that next phase of life, to downsizing or building your retirement home for your golden years, Carla Rae has experienced it all! What is your dream and how can she support you in turning that dream into reality? Niche Homes is a full-service real estate agency specializing in Wasatch Front neighborhoods and enclaves. Contact us if you are interested in buying or selling a home.

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