Long before you’re “clear to close,” your loan officer will request information related to homeowners insurance. Have you done the leg work to find the best coverage for the best rate?
We sat down with Ryan Hendrickson, owner and agent with Farm Bureau Insurance, to help guide you through the process to home ownership.
Michigan Mortgage: Buyers must obtain homeowners insurance before securing a mortgage. When in the process should they start getting quotes from local agencies?
Ryan Hendrickson: I would recommend getting a quote as soon as an offer has been accepted. When purchasing a home, especially in this seller’s climate, a speedy close is often a requirement of the offer. If you’re able to finalize your homeowners insurance early in the process, you will insure that it will not cause any unnecessary delays in your loan closing.
MM: Should home owners shop around and compare rates?
RH: Absolutely! It is always smart to compare rates. Your homeowners insurance is a large determination in what your “cash to close” is going to be. When you are purchasing a home, money can be tight. Saving even a little money can go a long way.
MM: That’s good to know. Thank you! After the home is purchased, how often should homeowners shop around for new rates?
RH: Price is obviously an important factor when determining or keeping your insurance with a company. I would recommend checking around if you ever notice a significant increase to your rates.
Remember, there are determinations other than price. You also have to look at convenience, coverage and customer service. Simply stated; would you ever buy a car by just looking at cost? Or adversely; buy a car without looking at cost? You’re likely not going to be happy either way. With homeowners insurance you need to be sure you are taking coverage and cost into consideration. When you do have a claim, you want to be sure that you have a good policy and are not only looking for a 15 minute, 15 percent discount.
MM: Why is it important for buyers to work with a local agent as opposed to a national branch or call center?
RH: Everyone has a different level of understanding when it comes to home and auto insurance. Most of the time it is a bit confusing. When working with a national branch or call center there are many facets of Michigan insurance law that they might not be familiar with. I would always recommend going local for two reasons: Your dollars stay in your community and we know Michigan insurance.
If you have more questions about homeowners insurance and its impact on the home buying process, your Michigan Mortgage Loan Officer is here to help.