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Building Insurance for Your New Home

If you're building or buying a new home, your lending institution will normally require you to carry building insurance on your property.  Building insurance is necessary because, until you have paid down your mortgage, it is actually the bank that owns your property, not you personally.  Accordingly, the bank, or other lending institution, will need assurance that the value of the property will remain intact.

Building insurance also covers other types of permanent fixtures and even interior decoration.  The test for what items are covered under the insurance policy is quite simple.  Simply ask your self if you could remove an item from the home, like shelves or cupboards for example.  If you can remove the item, that means a thief could also remove it, and it will not be covered under your building insurance. 

However, if you can not remove an item from your home, it is considered to be a permanent fixture under the terms of your insurance policy.  This means that the item will be fully covered by your building insurance.

Normally, outside buildings on your property will also be covered.  Garages, sheds or greenhouses would all fall under this category. To the contrary, fixtures such as swimming pools, gates, fences or paved drives are normally not covered.

Building insurance protects your property from various types of damage, such as fire, earthquake, storms, lightning, falling trees, or floods, just to name a few.  Building insurance will not cover damage to your home caused by thieves however.

Often your home building insurance rates can vary greatly depending on your location, the equity you have in your home, and the type of mortgage you have.  Certain states have laws regulating building insurance rates, but in general there are steps you can take to reduce this expenditure if you know how.

For example, installing additional security features to your home or your property can often reduce your building insurance rates.  Examples of security features would be, a home security system, advanced smoke alarm protection, and adding extra fire extinguishers, just to name a few.  If reducing your building insurance rates is a priority, speak to your insurance agent about reduced rates based on increased security features to your property.

Of course you can also shop around to find the best rate on your building insurance.  Comparison shopping for insurance will often reveal huge price differences from one company to the next.  Comparing insurers online is one of the easiest ways to save money.  Often, you can even get a quote for your building insurance directly from the insurer’s web site.

Additionally, some insurers will reduce your building insurance rate by including your vehicle insurance, or even health and life insurance, in one overall insurance package with the same company.  Be sure to ask about these loyalty discounts, as an agent may not mentioned this possibility until you inquire about it.

By doing your research, and comparing various companies online, you are sure to find the best rate for your insurance needs.  Taking advantage of loyalty discounts and adding security features to your property can help you get the best possible rate on your home building insurance.