Buying a home is a tremendous accomplishment. Congratulations! Part of our duty here at Insure Your Home.com is helping new homeowners understand their homeowner’s insurance quotes and policies. With this article, we’ll address the most common questions we get about quotes, so you can be prepared to make the right choice in homeowners insurance.

Homeowner’s Insurance Quotes – Are Rates Guaranteed?

No. A quote is an estimate of your future rates. We pride ourselves on providing accurate quotes that are as close as possible to the actual premiums you’ll pay for insurance, but we can’t guarantee them to the penny. Many issues can affect your homeowner’s insurance quotes, like:

• an extended period between the date of quote and the effective date of insurance
• recent claims filed at the property while it’s for sale – if a visitor gets injured at the home while it’s for sale, or a storm causes water damage for example
• claims made near the property – like if a neighbor’s house were to burn down
• your claims history – like if you suddenly get sued while you’re house-shopping
• property valuation adjustments made by property inspectors (we’ll talk more about valuation in a moment)

Know that insurers will send a professional inspector to your home, usually within a month or two of the effective date of insurance.

About Home Inspections for Homeowner’s Insurance

Every homeowner’s insurer will send a professional, certified inspector out to the property to get a look at the risk. It’s their job to take some photos of the property and verify that the home is what we say it is. They won’t ask to come in, but they’ll look around the outside.

Sometimes customers make honest mistakes about the construction details of a home. You might be surprised to learn how much of an effect these little details have on your homeowner’s insurance rates.

Consider these common mistakes that are often found by inspectors:

• actual square footage of the dwelling
• chimneys or fireplaces not shown on quotes
• roof style, age & composition
• foundation (slab, basement, etc.)
• sheds, outbuildings or swimming pools

Insurance inspectors also look for apparent risks. If they see broken windows, shattered glass in the driveway, or a pack of pitbulls in the yard, there’s a good chance you’ll get a letter to fix the issue by a specific date or the policy will be canceled.

Speaking of pitbulls in the yard, we must mention the importance of honesty when getting your insurance quotes! Insurance premiums will go up if insurers catch you being purposefully dishonest! Don’t hide the fact that you have dogs. Your insurer will not be happy if they find out.

Another question we get asked is about replacement cost valuations on homeowners’ insurance quotes.

Replacement Cost is not Purchase Price.

The most common question we get asked by new homeowners is: “Why am I insuring a home for a different amount than the purchase price?”

• Understand that your homeowner’s insurance quote is based on replacement cost, not purchase price.

When creating your quote we use a formula to figure what it will cost to replace this home, from the ground up, if it burns down. Different insurers offer various bells and whistles beyond that, but the foundation of your insurance policy is to replace at today’s costs of construction.

• Replacement cost varies from town to town, even neighborhood to neighborhood, and it involves the current prices of building materials and construction labor.
• Changes in material costs (like trade wars, tariffs, pandemics and so on) could affect replacement costs.

We should also point out that homeowner’s insurance doesn’t cover the land a home is sitting on (other than your liability coverage). In other words, if you spend $5,000,000 on a two-bedroom house on forty acres, most of that purchase price is the land, not the two-bedroom structure.

We know that insurance is complicated, and most first-time homebuyers don’t know all the details. You’re not alone! We hope this blog has answered your questions about homeowner’s insurance quotes and given you a better understanding of what you’re reading. Want to learn more about homeowner’s insurance? Contact us today!