11 Jun 3 Insurance Tips For Home Buyers
Buying a new home is an exciting prospect, whether you’re in the market for the first time or you’re a seasoned buyer. And while much of your focus during the home buying journey involves deciding on things like the right neighbourhood or the number of bedrooms you need, one key element that shouldn’t be overlooked is house insurance. To help you make good decisions about house insurance, here are 3 insurance tips for home buyers.
1. Investigate the home’s insurance history
Many home buyers leave choosing house insurance until last, but the best time to shop around for house insurance is when you’ve found a home you’re interested in buying. That’s because the property’s size, age, condition, location and what it’s constructed out of are all things that could impact the availability and cost of house insurance. As most lenders will require home buyers to have house insurance if they apply for a mortgage, knowing ahead of purchase how much your insurance premiums are likely to cost – on top of your mortgage repayments – could help you budget better.
Start by checking with your Insurance Adviser what insurance is available on the property you’re considering buying. It’s a good idea to find out from the vendor – if you can – what kind of insurance the house currently has, and whether there are any special conditions or considerations that may be in place, so you can compare any quotes you get.
You might even want to add an insurance condition to your sale and purchase agreement (along with conditions like finance or building reports) so you don’t get stuck buying a property that you can’t get cover for. Equally important is making sure that finance is not withdrawn due to the lender not being comfortable that their security (ie: your property) is unable to be insured. That’s a key reason for looking at insurance quotes early in your buying process.
If you’re unsure about when to enquire about house insurance – or you have questions about what factors influence the cost of house insurance premium – talk to one of our experienced Insurance Advisers at Max Insurances.
2. Get the right amount of cover
Most house insurance policies in New Zealand work on a “sum insured” basis, which means, in the event of a claim, you’ll be paid out no more than the sum insured amount specified on your policy.
That’s why it’s so important to insure your home for the full cost of a rebuild, along with the full replacement value of your household contents. Keep in mind that these costs will change over time and you may need to update your insurance policy from time to time, to reflect a higher or lower sum insured amount. So booking in a regular review of your insurance policy is a good idea.
Choosing the right sum insured amount is understandably tricky. If you under insure your home, you’ll be left out of pocket should the worst happen and unable to afford to rebuild your home and replace your contents. If you over insure your home, you stand the risk of paying too much for insurance you don’t actually need.
There are several ways to calculate your sum insured amount using online calculators, but many home buyers choose to engage a registered valuer to provide a rebuild estimate that they use to set the sum insured amount. You may find it useful to reach out to an Insurance Adviser like those at Max Insurances who specialise in helping Kiwis arrange insurance NZ wide and can help you determine the right insurance cover and sum insured value.
3. Arrange insurance early
Disaster may strike at any time, which is why it makes sense to have your house insurance in place as soon as the contracts are exchanged. That way your home is never left without any insurance cover, and you’re not stuck covering the bill for something that happened before you moved in. What’s more, if you need property finance to help purchase a house, most lenders will require you to have house insurance in place before settlement date as part of your mortgage approval. We at Max Insurances would be happy to help you arrange your house insurance to ensure a smooth home buying process if you are in the market to buy a property and need help to find the insurance cover that best suits your needs. To know more about the home buying process and home loan pre-approvals, please check out the home buying guide pulled together by our mortgage arm Max Mortgages. Or contact one of our experienced Mortgage Advisers to discuss your needs.
It pays to shop around and compare
Shopping around for house insurance is one of those tasks that is often left until last. But the fact is, it’s one of the most important parts of the home buying process. As probably your largest asset – and one of your most expensive – insuring your home correctly is absolutely vital.
Before you make any decisions about house insurance, talk to an Insurance Adviser like those at Max Insurances, who can help you choose the right amount of cover and help you compare policies so you understand exactly what you’re covered for.Request a Call Get a Quote
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