When I assist buyers with purchasing a property, there comes a point where they have to shop around for insurance quotes. Quotes can differ by hundreds or even over a thousand dollars.
I always make sure someone does not end up paying too much, but also don’t recommend choosing the “cheapest quote”. Some insurance agents give out quotes with low insurance value to gain the business, but this is not okay and underwriters are catching up on it.
As part of their business inspection process, underwriting departments now run a Replacement Cost Estimator on all home owner applications submitted using the information from public sources and their inspection. If the risk is determined to be “under-insured”, they will adjust the coverage and generate a new bill to the policy holder. This process may take up to 90 days after closing on the property. Buyers like to have an accurate estimate of their monthly housing payments before they close on a property, and getting a bump in their insurance rate and total housing payment a few months after closing could be very disappointing.
To avoid billing and premium adjustments after a policy has been bound, please make sure to check that your insurance agent completed a Replacement Cost Estimator when he or she presented you with a quote and a binding coverage.
Another important note on insurance: Roof condition makes a big difference on how a roof performs in a storm, and is a critical underwriting component. Roofs must be in good condition with little or no defects especially on:
- Tile roofs that are older than 25 years
- Shingle roofs older than 15 years
- Flat roofs older than 10 years
If you want to make sure your property or vehicles have proper coverage, let me know and I will be happy to recommend several great insurance agents.
Have a nice week!
Best, Niki
