You've been saving money for a long time. You explored different areas and neighborhoods and verified the ratings of the area's public schools. You calculated your route to work and attended dozens of Open Houses. Finally, you have made an offer to buy a house.
As you evaluate the next steps and implications of becoming a homeowner for the first time, we invite you to learn about the importance of purchasing home insurance.
Mortgage lenders often require that the creditor purchase homeowners insurance, as they want to protect their investment in the event of any mishap.
We share some tips that will be useful when purchasing this type of insurance.

1 - Get well informed on the subject
Take the course for first-time homeowners, like Freddie Mac's Credit Smart Steps to Homeownership, to familiarize yourself with all the relevant financial terminology and different conditions that may apply to your mortgage.
This will also help you understand how your home insurance premium can be calculated on your monthly mortgage payment, why it changes, and how your escrow account works.

2 - Take care of your insurance history
Much like a credit score, your insurance score can have a significant impact on your policy premium. You can even determine if certain providers will agree to insure you or not.
Problems like high credit card balances, default, tax liens, or bankruptcy lower your insurance score. Therefore, they will limit your options and probably increase your premium.

3 - Consider what type of property you will buy
Define whether it will be a single-family, multi-family home, a condominium, apartment or annexe.
It is also important to specify if you will live in this property, rent it to others or do both. An accurate homeowner’s insurance quote should reflect the type of home as well as its use.

Generally speaking, insurance companies consider owner-occupied properties to be less risky, as the owner is more likely to care for them better than a tenant.
Less common scenarios, such as a multi-family unit where there will be both tenants and owners, and which also includes commercial space on the ground floor (for example, a hairdresser) will require special attention.

4 - Before closing the business, carry out a home inspection
The state in which the property is located will always influence the price of the insurance. Old houses are more likely to need more repair than new ones, resulting in a more expensive premium.

Structural problems, such as cracked foundations or old roofs, require considerable investment to repair. Update your insurance agent regarding every change or evaluation you make to your property to ensure it remains adequately protected.

5 - Define what type of renovations you want to do
If you plan to do extensive renovations, you may have to vacate the house for a while after buying it. Contact your insurance agent to confirm if your policy will be active during that period.

In these cases, certain insurance companies only offer coverage if they have been notified of the vacancy in advance, while others may charge a higher premium during or require you to purchase a vacancy permit (a policy amendment that guarantees that ownership will continue). Secured while empty).

6 - Check the area where the property is located
Identify potential risks that could cause problems for your home in the future. For example, if the house is in an area with flood hazards or how closes it is to the nearest fire department.

These factors also affect the cost of the insurance premium.
For example, being in a flood zone can raise your premium price due to possible water damage. Conversely, proximity to a fire department will reduce the cost of coverage, because the response time in the event of a fire will be short.

7 - Consider installing security devices
Your ZIP code can influence your home insurance cost in other ways, too. An area with a higher crime rate will come with higher premiums, while a gated community condominium will mean lower premiums.

Installing a security system in your home can be a good idea. On the one hand, you can get a discount on the home insurance policy. On the other hand, you reduce the probability of theft and other crimes.
If you own a car, keep in mind that the area you live in will also affect your auto insurance premiums.

8 - Inform your insurance who will live on your property
Be sure to provide information to your insurance agent about who will live in the home, from tenants and family members to pets.

Certain breeds of dogs, such as the Pit Bull, German Shepherd, or Rottweiler, may contribute to slightly higher premiums. These pets tend to be more aggressive than others, and insurance covers the legal and medical costs associated with attacks or bites. Some companies are stricter, refusing to insure particular dog breeds, while others may go on a case-by-case basis or require you to take classes to rectify problem behaviors.

9 - Inform your insurance about equipment and appliances in your home
Keep your insurance agent informed about any equipment you have or are planning to buy, from an electric bicycle to a trampoline or swing.

Given the risks associated with such items, failure to disclose them may be considered a violation of the rules, which may cause your insurance company to refuse to pay claims or even cancel your homeowner's insurance policy.
This can become a major financial hardship, as it will be more difficult to obtain new insurance.

10 - Pools can be problematic
If you are considering purchasing a property that has a pool, keep in mind that that tempting feature will affect the cost of your homeowner's insurance.
Most insurance providers will increase liability coverage to cover damages if someone is injured while using your pool.

Pools can pose a danger, especially to young children, whether yours or your neighbors, who can jump on your patio to explore the pool, even when you are not at home.
The most effective way to prevent tragedies like accidental drowning is to have a fence installed around the pool. You can also use additional measures such as a pool alarm. You can learn more here .

Author's Bio: 

Beethy Chang