There are several things a buyer (and renter) needs to consider when buying or renting a home related to monthly costs, something that often matters much more than the asking price. You’ve probably heard the acronym before. “P.I.T.I”. It’s what makes up your monthly housing expense: Principal, Interest, Taxes, Insurance (and we can’t forget about the HOA).
Today’s opinion piece is about the often unnoticed or overlooked INSURANCE component.
In most of the US insurance premiums are rising. They are rising much faster than the rate of inflation. MUCH! And in some areas they are rising at a pace whereby owners cannot keep up with them. Even to a point where some home owners are being told their insurance provider is dropping their policy entirely (Ouch!). Here is a great… or rather scary article from the NYT that got me thinking…
There are multiple reasons for this, and I do not see quick and/or easy solutions in the near future. Too many homes exist in areas prone to nature’s extremes including fires, hurricanes, tornadoes and flooding. Add in the massive insurance frauds. Then add in the massive – often abusive – litigation in insurance claims that causes additional cost. Now add in much higher building and repair costs. Then add in higher financing costs. The list goes on…
No buyer or renter should ignore what their monthly insurance cost will be, and what exactly that will cover.
- What are your deductibles and do you have sufficient funds to cover them?
- Is your property fully insured for REPLACEMENT value and are you updating this annually?
- Do you live in a very wealthy area where some may self-insure?
- Do you live in an area where you are at higher risk for fire? (Anyone living in our mountain communities are certainly feeling this pressure)
This aspect is just another area where professional agents with real-time, outstanding knowledge and resources can assist the consumer….
At FORM we work with only the BEST local insurance agents. If you have questions about your coverage, we would be happy to make an introduction.
