Buying A Home in Farmington Hills MI? Guide To Homeowners Insurance – If you are planning on buying a home in Farmington Hills MI, and taking out a mortgage to pay for that home, homeowners insurance is a necessity. Although homeowner’s insurance coverage isn’t required by law, homebuyers looking to finance their purchase will quickly learn that your bank or mortgage company will most likely require you to get homeowner’s insurance coverage.
Lenders need to protect their investment
Lenders need to protect their investment in the unfortunate event that your house burns down or is badly damaged by a hurricane, tornado, or another disaster. Typical homeowners insurance policies offer coverage for damage caused by fires, lightning strikes, windstorms, and hail.
It’s important to note that not all natural disasters are covered by homeowner’s insurance. For example, damage caused by earthquakes and floods is not typically covered by home insurance. If you live in an area that is likely to flood, the bank or mortgage company may require you to purchase additional flood insurance.
Home insurance safeguards the lender and you against financial loss
Homeowner’s insurance provides financial relief if a covered event damages your home, property, or personal belongings. It can also cover personal liability if you are held legally responsible for damage or injury to someone else.
Most mortgage companies will require you to have insurance coverage for the full or fair value of a property (usually the purchase price) and won’t finance a residential real estate transaction without proof of insurance.
Home insurance policies typically include six types of coverage:
|Coverage type||What it does||Typical amount|
|Dwelling||Covers damage to the home and attached structures, such as a porch.||Enough to rebuild your home.|
|Other structures||Covers stand-alone structures on your property, such as a fence or shed.||10% of dwelling coverage.|
|Personal property||Pays to repair or replace belongings that are stolen or damaged in a covered event.||50% to 70% of dwelling coverage.|
|Additional living expenses||Helps pay temporary living expenses while your home is being repaired.||20% of dwelling coverage.|
|Liability||Pays if you injure someone or cause property damage unintentionally or through neglect.||$100,000 to $500,000.|
|Medical payments||Pays to treat someone injured on your property, regardless of who’s at fault. Also pays if you, a family member, or a pet injures someone elsewhere.||$1,000 to $5,000.|
Policy rates are largely determined by the insurer’s risk that you will file a claim
They assess this risk based on past claim history associated with the home, the neighborhood, and the home’s condition. Insurers typically consider the following items to determine your home insurance price:
- What it would cost to rebuild your home
- Your home’s age, condition, and other characteristics
- Distance from your home to the nearest fire hydrant
- Your city’s fire protection rating
- Your claims history and the claims history of others in your neighborhood
- Your coverages, limits, and deductible
- Items that pose, major injury risks, such as pools or trampolines
Coverage is subject to a limit and deductibles
Keep in mind that each coverage in a homeowners insurance policy is subject to a limit – or the maximum amount your policy would pay toward a covered loss. In most cases, you will have to pay your deductible before your insurance benefits kick in to help cover a loss. You can typically adjust your coverage limits and deductibles to fit your needs.
Once you pay off your mortgage
No one will force you to buy homeowner’s insurance one your mortgage is paid off. However, since your home may be your largest asset, home insurance is almost always a smart purchase – giving you both property and liability coverage.
Partner With the Best Farmington Hills MI REALTOR® – Tom Gilliam
Whether you are interested in buying a home in Farmington Hills, MI, or its time to list your current property, experience matters most in a changing market.
With over 20 years of local experience, Farmington Hills REALTOR® – Tom Gilliam is very familiar with the Farmington Hils market with access to the most up-to-date listings. Known for his professionalism and care for every detail, Tom is an expert at uncovering the perfect home for his clients’ lifestyle needs.
For sellers, Tom will create a marketing strategy that exposes your home to the public as well as to other real estate agents through the Multiple Listing Service (MLS), other cooperative marketing networks, open houses for agents, and so on.
Your listing will appear on all the most popular real estate sites where buyers spend hours a day looking at homes such as Realtor.com, Zillow, Trulia, REMAX, Redfin, and dozens of others. Your home will also be featured on Tom’s own highly-trafficked website Homes2moveyou.com.
You can be assured that Tom is fully committed to getting your home sold quickly for the best price. Tom works extremely hard for his clients and provides the kind of personalized service you need when buying or selling a home.
As your personal agent, Tom will protect your interests, advocate for you, and be your trusted guide and advisor throughout the home buying or selling process. If you or someone you know is interested in real estate in Farmington Hills MI, please give Tom Gilliam a call at (248) 790-5594 or you can reach him here.
Tom Gilliam, REALTOR®
29630 Orchard Lake Rd.
Farmington Hills 48334
Email: Tom @ Homes2MoveYou.com