Michigan Insurance Agent Discusses First Time Home Buyers
Hi. It’s Bryant Goodreau. Michigan Insurance Source located in Clinton Township, Michigan. We are an independent agent working for you, not the companies. You want to make sure you’re properly insured. Congratulations. Today, we’re going to be talking to you, your first time home buyers, and we say congratulations, because you’re doing something, you know, you’re making that first purchase. That big buy, that one thing you’re going to say is yours. Your home. You’re going to raise your family, live your life, and have good times. But you want to make sure that you’re properly insured.
Well, there are few things you need to know. Because if you go in, you buy the house, and you got to good mortgage guy, they’ll walk you through that. And you got to good real estate agent; they’ll help to make sure you buy the home that fits your needs.
Well, one of the things that you’re going to make sure is you want to make sure that house is properly protected. Why? That is one of your biggest assets, and if it burns down, gets into a storm, has an accident, whatever, you want to make sure it’s restored. But there are other things that you need to know besides just restoring your house. Now, when you get the mortgage on the house, the majority of the time, that insurance payment will come out of your escrow account and they’ll pay it in full, and then they’ll charge you the payments over that year. But you still need to work with an agent. Make sure whatever independent agent you’re working with shops around, and make sure they do a good job of finding the plan that fits your needs. One of the things that you can lower your price for your home owner’s policy is make sure they also shop your auto policy because if you put your auto with your home, you get really big discounts on your home policy, by adding your auto insurance right alongside.
Well, there are a lot of things you need to know about home owner’s insurance. The first is replacement cost. Now remember, you need to know the replacement cost of your home. Today’s day and age, a lot of people are buying older homes, never foreclosures, they’re short sales, and they’re buying them at a cheap. So when they call their agent, they’re a first time buyer and they’re going to their agent, their mom and dad did. They said, you know what, I bought the house for $50,000, and the agent might insure it for a cost of a $100,000. But you remember, you should always insure your home at replacement cost. If it burned down to the ground and you want it totally rebuild.
What’s going to be the cost of rebuilding? And I will promise you it will be a lot more, than what you bought it for. Especially in today’s day and age an average home that’s in the $110,000/$120,000 replacement cost is usually around $200,000, depending on what city, or state, or where you live that replacement cost can be a lot higher. Now in Macomb County we’ve been lucky. Our property values have been pretty stable but the cost to replace a home has been a little higher. So you’ve got to make sure your agent properly insures at replacement cost, because here’s the thing. It’s not going to hurt you if it burns down to the ground. Where it hurts you the most is if it doesn’t burn down to the ground and it just needs minor replacements, but if your home is not properly insured, you get penalized and you pay a lot more. The other thing that you’ve got to look at is the liability on the property. Why? Because, somebody falls, gets hurt, you got to make sure that if they’re going to sue you, you’re covered. My recommendation or our recommendation here at Michigan Insurance Source is, don’t go with one less than $100,000 really look at $250,000 or even $500,000.
Other things you got to make sure are properly covered our water back up. The state of Michigan we have homes that are on slabs. We have homes that are in crawl spaces. And we have one that’s a Michigan basement and a full service basement. A lot of times, people shortchange themselves on water back up. If you have a full basement, with a sump pump, you got to make sure that you have water back up. No less than $10,000. Reasoning behind that is if you look at the cost of what replacement is, of most of all, cleanup. Of if you had water sitting in your basement. Even if something as a couple inches can affect mold, an example would be if you had carpeting. Is the carpeting going to need to be replaced, or is it just going to need the water sucked out of it? Those are things that are covered underneath water backup. The lower prices, some agents will cut that short.
Let me tell you, the first time you have an inch of water on your basement; you’re going to be glad that a good independent agent put a good amount of water back-up, at a very low cost. Those are things that you need to know. Those are things that you should consider. Those are the big things that you need to look about. And remember, when you’re also looking at deductibles. Go with $1000 or $500. If they say, hey, we can get you a great price at $2500, don’t take a $2500 deductible. You’re a first time home buyer. A lot of your cost is wrapped up in the house. If a small incident happens, you’re on the hook for the first $2500. And if you pick up the phone and you call me and I file that claim, and the claim is less than $2500, you’re paying the full tab, but the insurance company knows that you had one claim. Truthfully, it’s not worth it. So remember, take the time to work with an independent agent, like us here at Michigan Insurance Source.
Make sure that, 1. That it’s properly insured for full replacement. 2. That you do have water backup. 3. Your deductible is at a reasonable amount. Not at $2500 or higher. That’s not reasonable. 4. Your agent’s working for you, making sure that the plans that fit your needs and fit your house is at a reasonable price.
Michigan Insurance Agent Discusses First Time Home Buyers
Thank you again for taking the time to listen to us. I’m Bryant Goodreau, Michigan Insurance Source. For more information on first time home buyers you can give us a call at 586-846-3133. Or go to our website. michiganinsurancesource.com. Thank you again.