Homeowners Insurance – the Ins and Outs
January 28th, 2008 Categories: Alexandria Dirt, Arlington Dirt, Falls Church Dirt, First Time Buyers Club, Home Buying, Home Selling, McLean Dirt, Real Estate 101, Reston Dirt
One of the necessary things to plan for when making a real estate purchase is insurance. But what do you need? Well, I’m not an insurance agent (read: insurance expert), but I can tell you from a property ownership perspective the minimums that you should have… read on.
Condominium Insurance Needs
When purchasing a condominium, the association carries a master insurance policy on the entire building structure. This is one of the costs that your condo fee covers. However, you’re not off the hook. You should have insurance to cover your personal belongings, as well as personal liability, so if anyone ever injures themselves on your property, you’re covered.
Single Family and Townhome Insurance Needs
When purchasing any other type of property with fee simple ownership (when you own the ground and air above – exterior walls, fireplaces, roofs, etc…) then you need a full featured home-owners policy, sometimes called a hazard policy, covering the structure, contents, liability, etc. There are specialty riders as well. For example, here in Northern Virginia, we don’t worry too much about earthquake policies and not too many properties are affected by the 100 year flood plain (although there are some) and require special flood insurance.
What to do?
One of your first jobs once you have a ratified contract will be to contact an insurance agent or two, get quotes and make application for insurance.
You’ll need to know such things as:
Wiring type
age of roof
# of layers on the roof (sometimes a new layer of shingles is nailed right onto the old layer)
distance to nearest fire hydrant
etc…
They will also run a C.L.U.E. report. The C.L.U.E. report (Comprehensive Loss Underwriting Exchange) will provide a 5 year history of losses associated with an individual and his/her property.
The home insurance policy will be paid for in full for the first year at the settlement table. Your lender will then begin to escrow 1/12 of your annual policy amount so that the beginning of year 2, they will have collected enough money from you to cover the premium that will come due at that point. IF for some reason you don’t go to settlement – say the contract gets voided because of an inspection item, or an appraisal issue – you’re not on the hook at all — after all, no service has been rendered. You simply call the insurance company and tell them the deal isn’t going through. They can sit tight until the next time!
Additionally, something many don’t realize, if you move to your new residence and have to leave a property vacant, communicating that to your insurance agent is very important. Since it’s obviously vacant, you won’t need to continue to insure the contents, but you will need to carry at a minimum a basic fire policy AND a comprehensive liability policy.
The key to good insurance is communicating with your agent. There are many great insurance companies out there – find one you’re comfortable with that offers competitive rates and you should be set. As always, if you want to talk further, don’t hesitate to give me a call or email.
Happy Monday!
Jennifer
Serving all of your real estate needs in Arlington, McLean and the entire Northern Virginia Region!
Contact me today for a free home valuation! Spring is right around the corner!
Copyright © 2007 Arlington Dirt Real Estate 
I agree the key is communicating with your agent. Like all small and fine print we tend to buy and assume we are coverd. Take the time to review the policy and meet with an agent to go over and see if any changes need to be made. If your a new homeowner have them explain all the options to insurances what is required in area and suggested. Replacement coverage is important not just a check.