Estimate property insurance to plan for monthly expenses.
Homeowners insurance, which is also called property insurance or hazard insurance, covers a property from loss. These policies cover a variety of expenses, such as items inside the home, the cost to replace the home and loss of use (such as staying at a hotel during repairs). Mortgage companies require the purchase of property insurance on a home. Estimating this cost will assist in planning your home buying budget.
Instructions
1. Estimate the home's value. Property insurance is typically based on the value of a home. Find an estimated property value through online databases, such as Zillow or Yahoo Real Estate. For a new home purchase, the real estate agent can provide a market analysis on the home.
2. Calculate the estimated value of property insurance. Generally, the cost of property is approximately 0.5 percent of a home's value. Multiply your home's value by 0.5 percent to get an estimated property insurance value. For example, on a house value of $200,000 the cost is $1,000 annually.
3. Talk with insurance agents. Find reputable agents in your area through professional associations, such as the National Association of Professional Insurance Agents. Request quotes from a few agents to find the most affordable policy.
4. Ask about multi-policy discounts. Some insurance agents provide a discount for buying property insurance, auto insurance and life insurance at the same agency. This will drive down the cost to insure your property. Talk with agents about these discounts when shopping for properties.
5. Purchase extras, such as earthquake insurance. There are some items, such as earthquakes, excluded from basic homeowner's insurance policies. Depending on where you live, talk with your agent about adding coverage.
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