Buying a new home or apartment can be one of the most exciting times in your life. It’s also one of the biggest investments you’ll likely make in your lifetime — so, making sure it’s insured properly is a must.
Whether you’re about to purchase your first home or that vacation home you’ve always wanted, be sure to consider these items when it comes to insurance:
#1: WHAT IS THE INTENDED USE?
It doesn’t sound like a question you would normally need to ask when buying a home or apartment, but the intended use of your new property can have big implications for your insurance needs.
Will this be your primary or secondary home? Will it be owner occupied or will you rent it out? Are you planning on leaving it vacant for months prior to your arrival?
Similarly, if you’re running a small business from home, you’ll want to make sure your equipment and materials are covered. An internet-based business where your computer, printer, etc. are your only pieces of equipment may not need much additional coverage. But, what if you’re a woodworker and have very expensive and specialized tools?
#2: ARE YOU MAKING CHANGES TO AGREEMENTS?
Your insurance policy isn’t likely the first thing you think of when tackling a home renovation, but it can be a key building block to ensuring that your renovation begins on solid footing. If your carrier isn’t aware of your plans, it can lead to misrepresentation issues.
The changes you make to your home can also impact your existing coverage. Perhaps the changes have drastically increased the square footage of your home. Maybe you’ve upgraded to a chef’s kitchen. Make sure you’re communicating these changes with your carrier so you can be covered in the event of a claim.
#3: WHAT DOES IT COST TO REPLACE YOUR HOME?
If the unexpected happened and a fire destroyed your home, how much would it cost to replace it? Some high-end carriers are starting in the $400 to $500/sq.ft range, while some of my clients are covered as high as $1,000+ per sq.ft. This is an important conversation to have with your carrier, as there are a few different ways that this can be calculated.
You might also consider extended replacement cost, which will pay up to a specified percentage over an insured's policy limit in order to fully replace a damaged home.
THE MORE YOU KNOW
There is so much more to consider, like how to value your home or apartment’s contents and what policy would cover you best. That’s why it’s always important to partner with an insurance provider that you feel comfortable communicating with —one who has your best interest in mind and who understands the nuances of your particular situation and insurance needs.
What considerations will you have to make when you buy your new home or apartment? Talk to me about it and I’ll help point you in the right direction.
Opinions expressed in this article are solely the author’s opinion, not intended to provide the reader with legal or any other professional advice. Should you need advice or opinion, consult with a qualified professional to address your specific needs.