Our thanks to Chris Bailey for this guest post!
Chris Bailey is an Evanston, IL-based Agent with Farmers Insurance, with over 8 years in the industry.
When he's not helping people with insurance needs in Chicagoland, he enjoys following his alma mater Loyola Ramblers, and his home state teams Ohio State Buckeyes and Columbus Crew in sports, planning his next trip abroad, and hacking up the occasional golf course when Chicago weather permits.
Whether you're buying your first home or consider yourself a property-purchasing veteran, there are three key things to ask your insurance professional to be sure you're prepared for the closing.
1.) Consider the Cost
It may seem obvious, but a top mistake clients make is hunting for a location before knowing the cost of insuring it.
Think about it - you typically do your fair share of due-diligence before buying a car. You should be doing the same for your new property purchase.
Remember, quality of construction matters more than the location you're purchasing in. Don't assume the home you bought in Lakeview ten years ago will cost the same to insure as your brand new location in suburbia in 2016.
At the end of the day, all insurance companies use a similar software tool to calculate the replacement value of your home for labor and materials, and despite the new location, the replacement value is typically similar. Don't be turned off if the replacement value is less than, or sometimes more than, your purchase price.
2.) Coverage is Key
Do you understand your coverage, and do you know what happens in certain scenarios pertinent to your new home? A reputable agent will make sure you are aware of all your coverage, and be sure it’s all tailored for you.
Also, consider this: Your mortgage lender has a vested interest in your insurance coverage to meet their qualifying requirements, so be sure your insurance professional knows that you're within their requirements well before the closing.
3.) Claims Count, And They Always Matter
Now more than ever, insurance companies are crunching the numbers on losses and profits across the board. With some companies, homeowners insurance is a losing proposition.
If the home you're about to buy has seen three claims in the last five years, it'll be tough to insure, and will likely carry a higher premium. If you’re buying a home with no claims in the last ten years, you can expect a much lower premium to insure.
When you're buying a new property, always see how previous claims tie to you.
If any of this seems confusing, remember, your insurance agent is here to help! If you've gone so far as to hire a professional real estate agent and attorney to purchase your next home, consider arming yourself with the best insurance professional to make sure all the work you've done so far hasn't gone to waste.
Your insurance professional has the knowledge to protect you the right way, and can be a vital part of your real estate team.
You can reach Chris by calling him directly at 224-307-2884, or by writing at This email address is being protected from spambots. You need JavaScript enabled to view it.. And as always, when you’re ready to start looking for a new home, drop Real Group a line!
