As real estate professionals, it is essential to determine the proper homeowners insurance coverage for our clients. Not only must we make sure that our clients are adequately protected in the event of a disaster, but we must also ensure that they are not overpaying for coverage they don’t need or underpaying for coverage they do. So how can we know that we have recommended the correct insurance policy and amount of coverage? Let’s take a look at what you need to consider when how to properly determine homeowners insurance.
Types of Insurance Policies
The first step when determining homeowners insurance is to understand the different types of policies available. Homeowners insurance typically covers damage caused by fire, lightning, windstorms and hail, theft, frozen pipes and other specified events. Flood insurance covers damage caused by rising water due to floods or coastal storms. It is important to note that flood insurance is separate from homeowners insurance, and most insurers do not cover flood damage under their traditional policies. Homeowners should consult with their insurer or an independent agent to determine if additional flood coverage is necessary.
Calculating Coverage Amounts
Once you have determined which type of policy is needed for your client’s home, the next step is to calculate the correct amount of coverage needed. To do this accurately, you must consider both the dwelling limit and personal property limits on the policy. The dwelling limit represents the maximum amount your insurer will pay out in case of total loss due to an insured event such as a fire or tornado. The personal property limit indicates the maximum amount your insurer will pay out for damages related to personal belongings kept inside the home such as furniture and electronics. You should advise your clients on calculating their own dwelling and personal property limits based on their individual circumstances so that they are neither over- nor under-insured.
When selecting an insurer for your client’s home, it is important to research multiple carriers in order to obtain fair and equitable treatment in obtaining appropriate coverage at competitive rates. Independent agents can be especially helpful in this process as they have access to products from multiple carriers. Allowing them to compare quotes side-by-side and recommend a policy best suited for each client’s individual needs and budget constraints. Additionally, independent agents can provide valuable guidance regarding which discounts may be available. So that our clients get the best possible value on their premiums each year.
When it comes down to it, there are many factors involved in how to properly determine homeowners insurance. Understanding what types of policies are available all the way through selecting a carrier offering competitive rates with discounts applied where applicable. As real estate professionals, it is our responsibility to ensure that our client’s homes are adequately covered while also providing them with fair treatment throughout every step of this process—from selection through renewal each year. Taking these steps will help us guarantee that our clients receive all possible protections offered by their chosen policy. While avoiding unnecessary costs associated with over insuring or underinsuring their homes.
Learn hands on from Doug Vairo, Manfred Certified Instructor. Since 1998, he has trained thousands of loan officers and real estate agents around the country. Doug has trained for companies such as, Countrywide, Capital One, Wells Fargo, Morgan Stanley, Exit Realty, Brooklyn Real Property, Staten Island Board of Realtors, Brooklyn Board of Realtors, Bronx Board of Realtors, Triple Play and countless other organizations. Join Doug on March 29th and July 28th . Look for the tips that Doug spreads out in this course about how to properly determine homeowners insurance. Some are silly, some may be funny, but all will help you understand the subject on a deeper level.
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