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For Immediate Release: REALTORS® Provide Tips for Obtaining Homeowner's InsuranceBy Bill Hanley, President, New Jersey Association of REALTORS® (NJAR®)As a REALTOR®, I know first-hand how rewarding and exciting buying a home can be. Most of my clients save for years to purchase a house, which is one of the largest financial transactions they may ever make in life. With so much invested in a home, it's important to find a homeowner's insurance policy that will adequately protect your property. Homeowner's insurance will help cover the costs for any damages that may occur to your property from unsuspecting events such as fires and natural disasters. It's important that you take the time to learn more about homeowner's insurance in order to obtain a policy that best meets your needs. REALTORS® have the experience and expertise in the real estate industry to help answer your questions and guide you in the right direction. During the home buying process your REALTOR® can provide helpful information about obtaining homeowner's insurance and how to find an insurance professional. You may not realize that homeowner's insurance is a necessary component to obtaining a mortgage. In many cases, for a closing to take place, a buyer will be asked to provide information about their homeowner's insurance policy. Any issues that arise may delay the home buying process. Home buyers should be advised that a "binder" is only a temporary commitment to provide insurance and is not an insurance policy. Therefore REALTORS® recommend that home buyers contact a licensed insurance agent or broker to assist them in their search for a policy as soon as the home is under contract. Home buyers should also know about what factors homeowner's insurance companies may consider when providing insurance and assessing the cost such as: the construction of a house; its age, location, condition; safety devices available (such as smoke detectors and alarms); swimming pools; and the home's proximity to a fire department and waterways. A home's location and whether or not it is equipped with some of these features may affect the cost of an insurance policy. The history and condition of a house, such as any damage from a fire or water may also be a factor for insurance companies when providing a policy. Buyers who are interested in knowing the history of a home can ask the seller for a CLUE report. A CLUE report, or Comprehensive Loss Underwriting Exchange, lists all claims reported to an insurance company for a given property over a five-year period and shows the date of loss, type of loss, and amounts paid out. It may also be helpful for buyers to be aware of their credit scores. Some insurance companies are using consumer credit scores to determine their insurance risks and premiums. Obtaining your credit score before shopping for a home will provide you with more time to clear up any errors in your credit that could affect your ability to obtain insurance coverage. Good credit is also a key factor for obtaining a mortgage since lenders tend to offer better rates if you have a reliable payment history. Lastly, since Hurricane Katrina, some insurance companies have become more selective about their coverage areas, such as on or around the coast, therefore home buyers should be aware that finding a policy in these "high-risk" regions could take more time. Homes located in a flood plain will require flood insurance in addition to homeowner's insurance so it's important that home seekers look into obtaining both. Buying a home is a very big and important decision in life. With so much time and money invested in your home, it's important that you take the time to make sure your property will be protected. To contact a REALTOR® in your area, visit www.njar.com.
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