Home Buying Process

1
Home Buying Process Insurance
2
Objectives

• Define Homeowners Insurance
• Discuss the Stability of Insurance Companies
• Determine the Cost, Coverage and Services
  Provided by Homeowners Insurance

3
Homeowners Insurance

• Necessary purchase before you can close on your
  house
• Protects the homeowner from "casualty" (losses or
  damage to the home or personal property) and from
  "liability" (damages to other people or property)
• Required by lenders and usually included in the
  monthly mortgage payment

4
Homeowners Insurance

• Good Coverage Takes Preparation
• Check your credit rating.
• Check your filing history on home insurance
  claims.
• Free CLUE Report at www.choicetrust.com

5
Homeowners Insurance

• Considerations When Purchasing
• Stability of the Insurance Company
• Cost of the Insurance Policy
• Services Provided by the Insurance Company

6
Stability of Insurance Companies

• Check a companys financial rating in the public
  library or online
• Standard Poors Insurance Rating Service
• www.standardandpoors.com
• A.M. Best Company, Inc. Insurance Rating Service
• www.ambest.com
• Scale A to F-
• Look for a high rating (A- to A)
• Lenders usually have a certain rating requirement
  that insurance companies must meet.

7
Cost and Coverage of Insurance

• Take the highest deductible you can afford.
• Ask about available discounts.
• Get enough coverage to
• Completely rebuild the house if destroyed.
• Replace everything in it.
• Protect yourself by including liability.

8
Cost and Coverage

• Additional coverage for
• Replacement cost coverage for possessions
• Extended or guaranteed replacement cost coverage
  for the structure
• Building code upgrades
• Sewer and drain back-ups
• Inflation-guard
• Umbrella coverage for a pool or other high-risk
  items
• Special riders for jewelry, collectibles and
  expensive items

9
Flood, Windstorm and Earthquake Risk

• Flood Insurance
• Provided by National Flood Insurance Program
• Flood Hazard Zones require Flood Insurance
• Windstorm and Hail Insurance
• Included in most policies
• Deductible varies due to location and
  susceptibility
• Earthquake Insurance
• Expensive
• High deducible

10
Customer Service

• Talk to other customers.
• Call an agent.
• Do your research.
• Insurance Information Institute
• www.iii.org
• NM Insurance Division www.nmprc.state.nm.us/insura
  nce/inshm.htm

11
Summary

• Defined Homeowners Insurance
• Discussed the Stability of Insurance Companies
• Determined the Cost, Coverage and Services
  Provided by Homeowners Insurance