homeowners insurance & home warranties

by | Oct 27, 2014 | Real Estate | 0 comments

Know someone thinking about buying a home?
Upcoming home buyer classes are:

Saturday, 11/8/14, from 9am-12pm
Marshall Community Center, upstairs conference room
1009 E McLoughlin Blvd, Vancouver Wa (kitty corner from Clark College)

 Monday, 11/10/14, from 5pm-8pm
Marshall Community Center, upstairs conference room
1009 E McLoughlin Blvd, Vancouver Wa (kitty corner from Clark College)

…if these dates/times don’t work for you, we have others. Check out the website for more class dates, times, and locations. PLEASE always check  the website www.freehomebuyerclasses.com for any changes regarding the classes!

Remember…with reservation…we will throw in lunch, or dinner!  🙂
Happy Sunday~

Pumpkin day Part TWO!   Why part two?  Because it didn’t happen last week.  🙂  We left early Sunday morning, and had breakfast at Carol’s Corner Cafe (yummy!), then we trekked over to the pumpkin patch….alas, too late.  The place was PACKED!  So we went to a different one, and the fields were naked!  So we traveled north, and two patches were closed.  Ok, enough signs…we went home with the plan to head out today.  Wish us luck in our hunt for a pumpkin!!  🙂  Yes, I am aware we could go to the store, and we just might end up there if todays adventure leads astray again.  However, I have faith that we will find the ‘great’ pumpkin.  We believe….  😉

***Don’t forget…  our upcoming Client Appreciation Night… Saturday, December 6 from 3pm-6pm at Cinetopia for Big Hero 6.  Chris Berg & I are happy to include you in this event.  We know how busy our lives get, and while we enjoy keeping in touch with you, and your family, on Facebook, and through emails….we miss seeing you!  😀  So, twice a year we rent a theater room at Cinetopia so we can all get together and have a good time.  Friends….family…all are welcome, and if you would like to come, please rsvp to either me, or Chris Berg at chris.berg@pmblending.com.  You can also catch us on Facebook, or text.  Come see us and watch a movie!

Now…on to our weekly home buyer education!  We are *finally* going to talk about insurances, and this is going to be a couple of week topic.  Why?  Because there are lots of types of insurance when buying & owning a home, and it gets all mixed up.  I want you to understand the differences though, so I am going to spend some time on these for you.  🙂  This week we will talk about homeowners (aka Hazard) insurance & home warranties….heads up…it is a long blog this week.  Next week we will talk about title insurance & a little bit about title reports.  Then we will follow up with Mortgage Insurance.  So….are you ready?  Here we goooooooo…..

Let’s get into this weeks topic and talk a bit about Home Owners Insurance & Home Warranty.  These two often get confused, and most folks don’t understand what either do.  So…let me help!!

Home Owners Insurance (aka Hazard Insurance)

Home owners insurance always seems to be the last thing many buyers think of, but it should be one of the first things.  Remember that this is your first legal reason to back out of an offer.  After you, and your buyers agent, make an offer on a home, you should call your insurance company to verify that the home is insurable.  If there has been a previous claim on the property, the home may not be.  Remember that a claim follows the previous homeowners, and the expense will also follow the home to the new home buyer.

Shop around for home owners insurance….remember that you can often get a better deal if you ‘bundle’ your insurance.  Call your current renters insurance company, call your vehicle insurance company…maybe call a few more.  Once you have an agent and company you are happy with, contact your lender and give your lender the name and phone number of the insurance agent.  The lender will call your insurance agent to request an insurance binder. You can also give your insurance agent your lenders information and s/he can send the binder directly to them.

What is homeowners insurance?

Homeowners Insurance is often referred to by lenders as Hazard Insurance.  When you purchase a home, you are taking responsibility for that loan.  Homeowners insurance protects the bank, and it protects you.   If you have a fire, and your home burns down, you are still responsible for that loan….even if the home is no longer there.  I know that we don’t have enough money to re-build a home on our own, and that is where insurance comes in.  Your home owners insurance will pay to re-build your home, and often help you out with living arrangements in the meantime.

Three words you need to remember for home owners insurance is Care, Custody, and Control.  If the event that damages the home is outside of your Care, Custody, and Control…that is where homeowners insurance comes in.  Fire?  Yes?  Leaking Roof?  not so much.  If there was a violent storm in the last couple of days…maybe.  Technically roof leaks are considered maintenance of the home owner.  Is it a claim?  Yes.  Will you receive insurance funds to repair?  No.  A leaking roof is within your Care, Custody, and Control….unless there are extenuating circumstances….  A tree falls on your home?  Yes, call home owners insurance.  Busted pipes while you are on vacation?  Should be a call to your home owners insurance company.  What about if your dog bites someone?  Well, do you have a “beware of dog sign” on your yard/home?  If you do then you could be claiming responsibility and it would be outside your coverage!  I know you ‘think’ you are protecting yourself with this sign, but in actuality you have just negated your insurance claim because you are already claiming your dog to be dangerous.  Home insurance is all about those three little words…Care, Custody, and Control….

It is all very confusing, so I urge all of my clients to have a relationship with their insurance agent.  If you have any questions regarding whether or not you have a claim, call your agent and ‘hypothetically’ ask them the question of whether or not you have a claim.  🙂

Remember as well that you have a deductible.  Most deductibles are around $1000….so if you do have a claim be sure that it is going to cost more than that to repair.  You might have an insurance claim, but if it is going to cost less than your deductible to repair it, don’t make the claim.

Always remember…Care, Custody, and Control.  For more information, call your insurance agent.

Homeowners insurance is paid by your mortgage company, and is part of your monthly mortgage payment.  Your monthly mortgage insurance covers Principal, Interest, Taxes, and Insurance….aka PITI payment. Your mortgage payment also covers your mortgage insurance, but that would make it the PITIMI payment, and how much sense does that make???  🙂

When you are getting your pre-approval, one of the questions your agent should ask your lender is what tax amount your lender used for your pre-approval.  If the home you are interested in as higher taxes than used, you may not be approved for as much as you thought, and if it is less, you may be approved for more.  This is something your buyers agent will help with.  Remember, we are all supposed to be working together to help you find, and purchase a home.  🙂

Now home warranties are not required…but it is something I am a HUGE advocate for…..

Home Warranty

I urge all buyers to have a home warranty.  Home warranty typically covers everything but siding, roofing, windows, walls, and flooring.  There are the basic coverages, and additional coverages you can add after you close and move in.  There are three ways to get a home warranty….the buyer can pay for it, the seller (or sellers agent) can pay for it, or the buyers agent can pay for it.  Find out if you are getting a home warranty, which home warranty company it will be, and then do some research on it.  What is the basic coverage for?  How much are the co-pays/deductibles?  What are the additional coverages you can add?  What do they cover, and how much are they?

Why is a home warranty such a good idea?  Because things happen.  For example…in July of 2009, my water heater went out.  No hot water!!  We had to go purchase another one at $500.  This would have been covered for about $55 with a home warranty.

On 12/31/2010, my electric furnace stopped working.  It was very cold!!  And of course…new years eve, so no one was available to repair it until Tuesday…..that was 3 days away.  Luckily, our furnace guy had his assistant come by and drop off some space heaters for us.  Come to find out, the builder put in a furnace that was too small for my home.  The furnace is meant for homes 1200 sq ft or smaller…my house is almost 1700 sq ft….no wonder why it burnt out!  We still need a new furnace that is going to cost $2500!!  The band-aid cost to repair it was $600!  Home warranty would have covered the repair, and paid for a new furnace.  Sadly, even though I get home warranties for all of my buyers, I don’t have one on my own home!  This has since been remedied!  I now carry one on my own home.  😀  I still don’t have a new furnace though….my band aid fix is still working so that works for me!

I urge buyers to continue with a home warranty every year, but it is, of course, up to you to continue it after the first year.  That first year is always so important as you are painting, getting used to mortgage payments, utilities, yardwork, maintenance, etc….if something were to happen, it’s nice to have that back-up.

Home warranty is a back up insurance, so to speak, that can cover those items that the homeowners insurance can’t.  You can add additional insurances to cover items that the basic warranty doesn’t cover.  Again, I am a huge advocate of a home warranty.  I feel so very strongly about this that I make sure all my clients have a home warranty when they buy their home.  That first year you have so much going on that something happening in your home can be a financial burden that you don’t need.  This is where that home warranty becomes your best friend.  Get a home warranty!  Remember…three ways to get one…ask the seller to pay for one, you can pay for one, or your buyers agent can pay for one.

Some home warranty companies are:  American Home Shield, Fidelity Home Warranty, 2-10 Home Warranty, First American Home Warranty, Home Warranty of America, among others.  The one I typically set up for my clients is with Old Republic Home Warranty.  My clients have been very happy with their service, and they are very affordable.

I hope this helps you this week!  Please, if you have any questions, please feel free to call, email, text, or even facebook me anytime.  I am always here to help!

Information is power, and I hope that I am help you!  Good luck, and as always…May the odds be ever in your favor out there….  If you are looking for a real estate agent, I would love to be able to help you.  
As always….this is just a quick overview…. please remember that your agent, and your lender work for YOU.  You drive the bus…we are merely GPS to help you get to your goals.  Like the classes, this weekly blog email is to help you with your homebuying adventure.  The goal is to be informative and non-promotional.  🙂  We are, however, hoping you will call and want us to help with your adventure.
If you have any questions about this, or something you have heard…or if you would like me to help you with your homebuying adventure, please call, email, text, or facebook me anytime.  I am, as always, happy to help!

Thank you again for your business and your referrals!!  …and thank you for referring these classes to your friends, family, and co-workers.

…disclaimer…if you have already purchased a home, or would no longer like to receive these emails, please let me know and I will be happy to remove you from any further mailings…

Next Week:  Title insurance…explained
followed by:  Mortgage Insurance explained,
 Best time of year to buy, or sell a home?
Real estate timelines…time is of the essence.
Last Week:  Buyers Due Diligence

Have a great day, and I will talk to you soon,

Tracie DeMars / Realtor

ReMax Equity Group
License# 81289
Vancouver, WA

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