Homeowners Insurance

[Psychstache]

Hey Guys,

In the middle of the first time homebuyer process and I am trying to understand homeowners insurance. I tried to get a 'phantom' quote of sorts with a random property I was looking at and my eyes glazed over with all of the different deductibles and other numbers.

I am looking for places and I have heard that homeowners insurance is pretty high here, can anyone speak to that? How much flexibility do I have in deductibles? What kind of restrictions will the loan holder make on deductibles for insurance? What is sensible for deductibles?

Basically, if someone has 'Homeowners insurance for dummies' I would love to borrow it.

Thanks in advance!!!

[Another Reader]

The lender will have minimum coverage requirements and a maximum deductible, often $1,000.  You should get the minimum coverage requirements from the lender (fire will be at least the loan amount) and then shop.

[Nords]

In the middle of the first time homebuyer process and I am trying to understand homeowners insurance. I tried to get a 'phantom' quote of sorts with a random property I was looking at and my eyes glazed over with all of the different deductibles and other numbers.
I am looking for places and I have heard that homeowners insurance is pretty high here, can anyone speak to that? How much flexibility do I have in deductibles? What kind of restrictions will the loan holder make on deductibles for insurance? What is sensible for deductibles?

Start with HO1, HO2, and HO3.  Most policies fall into these categories.
http://en.wikipedia.org/wiki/Home_insurance

If you can save enough on premiums in 3-5 years by raising your deductible, then it's generally worth the effort.  If you have an emergency fund that can take a $2500-$5000 hit then raise your deductibles to at least that level.  The sad trend is that a "small" homeowner's insurance claim (under $10K) can result in the company raising your premiums at the next renewal.

It's worth having riders for "cost of rebuilding" (all building materials cost more after the hurricane or earthquake), cost of retrofitting to code (required when rebuilding an older house) and inflation (annual raises in the assessed value of your home).  But it's worth even more to have a home built to the excess code that will get you through most of these natural disasters without having to make a claim.