CHANTILLY, VA, Mar 29, 2024—When you're wading through the legalities of buying a home, the process can be daunting, especially if you're a first time buyer. Interest rates, mortgages, and appraisals, oh my. Below, Scott MacDonald, President of RE/MAX Gateway spares you some confusion by weighing in on what type of homeowner's insurance is your best bet.
“For most buyers, a standard insurance policy will do,” explains MacDonald. These basic policies protect against several natural disasters and catastrophic events. “However,” says MacDonald, “it will not guard against earthquakes, floods, war, and nuclear accidents.” Looking for a little extra disaster coverage? The policy can be expanded to include these disasters as well as coverage for such things as workers' compensation. In fact, the lender may require that you purchase flood or earthquake insurance if the house is in a flood zone or a region susceptible to earthquakes.
Looking for even more coverage? “You can increase coverage beyond the depreciated value of personal property such as televisions and furniture by purchasing a replacement-cost endorsement,” says MacDonald. And dome-based business-coverage, once overlooked, is an ever-increasing popular rider. It does not cover liability associated with the business but rather contents such as home-office equipment and general liability to cover injuries to clients and employees.
Other considerations: an inflation rider, which increases coverage as the home’s value rises, and getting insurance that is equal to the full replacement value of the home. In these instances, insurance companies usually require an amount equal to at least 80 percent of the full replacement value, MacDonald explains. Otherwise, only a portion of the loss would be covered.
For more real estate information, please contact RE/MAX Gateway at scottmacdonald@remax.net, 703-652-5777, or RE/MAX Gateway.
RE/MAX Gateway is an award-winning real estate company serving Northern Virginia and the DC Metro area with four office locations. Agents are licensed in Virginia, Washington, D.C., and Maryland.