You were able to secure a loan from an SBA lender in Salt Lake City. The loan proceeds will finally pay in full the property that will serve as your home and simultaneously your place of business.
According to the Insurance Information Institute (III), around 95% of households in America have insurance. Purchasing a homeowner’s insurance is going to be your next move after acquiring the property.
You were told and understand the concept that not all insurance companies are the same. With the mortgage payments and the cost of starting your business, you want to make sure that you get the right insurance and be able to save on cost.
An Overview of Homeowner’s Insurance Industry
The homeowner’s insurance industry recorded a total revenue of $104 billion in 2018. Thousands of properties-homes, farms, cars, buildings, etc.-were lost in the current bushfire in Australia. So far, some 8,900 insurance claims were valued at around $400 million. That amount might seem a lot, but if you compare it to the size of the industry, it’s practically just a drop in the bucket. With a robust average annual growth rate of 2.6%, the industry will continue to grow.
Unless something catastrophic happens, there’s no need to be pessimistic about the capability of the industry to pay, even in extreme situations.
Shopping and Saving on Insurance Cost
There are no two ways about it. The fact that you will also be operating a business from the same property as your home, you need to get the right insurance.
- Gather Data . You need to gather data first, which you should present to your insurance agent to determine the insurability of your property. This is a crucial step because the data will impact the type of insurance you can get. How old is your building or home? Are the plumbing and electrical systems newly installed as part of the recent renovation effort? What is the size of the property, and where is it located? The answers to these questions will form the data set required by your agent.
- Shop around. If you don’t have an agent, you still need to do the data gathering. And then you can shop around. Consult your friends and find out what their insurance coverage is like and how much they are paying. Go online, do your research, and discover the different insurance companies’ offerings. Note that the biggest might not necessarily be the best. Local insurance companies sometimes get higher satisfaction ratings from customers.
- Higher deductibles. Insurers give discounts, typically starting at a $500 deductible. If you raise the deductible amount, the discounted amount will also increase. But be wary with an over-excited agent offering you a higher discount if you go higher on your deductibles. Note that many companies put a limit on deductibles at $1,000.
- Get the same insurer for your automobile and your home. If you buy your home policy from the same company that insures your motor vehicle, then you can get between 5% to 15% less on your home insurance policy.
Understand the different types of coverage-HO-1 Basic Form, the HO-2 Broad Form, the HO-3 Special Form, and the HO-5 Comprehensive Form. Your policy will depend on the type of coverage. Sometimes, you might pay less in the beginning. But when claiming time comes, what you will get will be less than what you expect. Do your due diligence above all.
