Many people give little thought to insurance until they have a claim. So the decision to hire an insurance policy depends on the risk tolerance of each person. Our duty as real estate agents is to explain to our clients the importance of taking out a policy to protect their investment.
There are different types of policies; However, in terms of real estate, the most important coverage is aimed at protecting: The internal and / or external structure of the property:
Personal items inside the property
Damage to third parties (accidents within the property)
Damage to other properties (in the case of condominiums)
How to choose my property insurance?
There are different kinds of insurance, and not all homeowners need or are looking for the same type of coverage. Therefore, it is convenient to specify the coverage of the policy, its restrictions, exclusions to cover its possible risks. The most important elements to take into account when deciding what type of coverage you need are:
- Property use: Investment, rental, vacation or primary use home
- Civil liability to ensure:
- Protect yourself against legal action and medical expenses
- Protection against damage to other properties:
- Personal objects and the internal part of the property (floor, walls, ceilings, electrical installations, equipment or air conditioning)
- Location:
If you are in a hurricane-prone area (this is usually an optional policy)
If you are in a flood zone (required by the government and lenders) - Kind of property:
House and townhouse: structural protection, flood, disaster and hurricanes
Condominiums: The buildings usually have a general policy (master policy) that covers the structure and common areas against flooding and loss.
Number of properties: If you own several properties, you have the option of using “umbrella” insurance that allows you to dilute the cost of the policy.
Ways to reduce the cost of the policy?
- Increase your deductible. As a homeowner, you can save money by increasing your insurance deductible; that is, the amount that you must pay when an accident occurs, and, from which, the insurance obligation to cover the debit balance begins. This is one of the most common ways to keep insurance costs down, and it’s certainly a great way to save, as long as the deductible amount is available at the time of a claim.
- Install an effective alarm system. Insurance companies give discounts for having an alarm system.
- Try to pay for minor claims yourself, as frequent claims are critical for insurance companies setting a higher premium value. Do not forget to ask for the advice of an insurance broker at the time of acquiring your property and if you have already acquired it it is never too late to evaluate the conditions, terms and coverage of your policy.
