Your Guide to Shopping for Home Insurance

Orignial Article from Realtor.ca 

Becoming a homeowner is about more than simply finding your dream home. Before closing a deal, you'll have secure your financing, complete inspections and set up your home insurance.

Insurance companies take many factors into consideration when compiling your quote, but they don't all ask the same questions. Quotes can range anywhere from a few hundred dollars to a few thousand. The goal when purchasing home insurance isn't just to find the lowest price. It's wise to speak to at least three different insurance companies (or a broker who will present you with quotes from multiple insurers) to compare prices and coverage, so you can find the plan that best suits your needs and budget. 

While some things are out of your control, like the age of your home or the area's risk of water damage or flooding, knowing which questions to ask and which details to provide can help you get the best price for the best coverage. Before you get stuck paying more than you need to, here are a few things to bring up to each company when you're shopping around for a quote.

Your existing policies

If you have an existing auto or life insurance policy, you could be eligible for a bundle discount. Speak to your existing insurance lender; this will set the bar when it comes to negotiating with other lenders, but don't automatically assume your agent will be giving you the best price.

When I moved from a condo to a detached home, even with bundled auto and home policies, a different insurance lender was able to provide me with a quote of nearly $250 less (for the same amount of coverage) than my existing insurer had quoted me. So always remember to shop around even if your existing lender offers you a discount.

Your credit score

Credit scores aren't something most people think about when purchasing home insurance, but if you and your partner are buying a home together, try putting whoever has the higher score first on the application. For example, when my boyfriend and I swapped out his name for mine (my score is about 40 points higher), we managed to lower our quote by $300.

If you're buying a home solo, work on improving your score as much as possible before you begin the insurance application process. Pay off credit cards and student loans (if possible), and pay your bills on time. The higher your credit score, the more you could save.

Location and other details

Many factors affect your home's insurability and insurers can't inquire over every detail. Make sure to point out any additional features making your home less of a liability. If you plan to revisit the home before closing, drive around the area and keep an eye out for a few things:

Fire hydrant: A fire hydrant on your property or across the street will lower your premium.

Sump pump: A sump pump is vital if the area has a high risk of flooding. If your home has a sump pump, your insurer may lower the water damage premium.

Fire or police stations: The closer your home is to a fire and/or police station, the lower your premium will be.

Security system: If the home doesn't have a security system but you'd like the added safety, let your insurer know, and find out which systems are eligible for the best insurance discounts. Installing the cheapest system won't necessarily save you money, but the right one can lower your premium by as much as 15 to 20%.

The roof: Some homeowners forget to inform their insurance company when they make an update, such as replacing the roof. If the insurer has it on file your roof was last replaced in the ‘80s, but the shingles look brand new, have your REALTOR® contact the seller to determine whether they've been replaced recently. The newer the roof, the less of a liability and the lower your insurance premium.

Amount of coverage

Depending on the home's location and the company you're dealing with, you may be able to choose to increase or decrease the amount of coverage you get for certain parts of the home. For example, if you're moving to a high water-risk zone and your home has a finished basement, coverage will be costlier; but if you plan to strip the basement past the drywall and rebuild it in a year or two, you might not feel the need to have such high coverage.

Once you've found your dream home, the hardest part of your house hunt is over. But you're not done just yet! Now, you still need to inspect it, pay for it, insure it and decorate it. A REALTOR® is a great resource for helping you make informed decisions and navigate the next steps. Armed with this knowledge, you can negotiate for the best possible insurance quote for the best coverage and save yourself money and headaches in the future.