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How To Buy Home Insurance

Householders' insurance is a requisite, something every property should have. If you have a mortgage, your loaner will command coverage -- and if your home is mortgage-free than you should have reporting anyhow.
But not all coverage is alike. Policies and protectives cover differ, then do costs. In essence, you want the most shelter for the least number of dollars.
Householders' insurance broadly comes in exchangeable packages. For instance, the most basic sort, HO-1, proffers protectives cover atomic number 47.


  • What form works best in your situation?
  • What is included under the form you select -- and what is excluded.
  • Do you have a personal office at home? If yes, what is covered?
  • Do you have a home-based business? If yes, you may require additional coverage specific to the type of business you operate. In this case, think in terms of clients dropping by, business equipment, inventory, etc.
  • Do you have antiques and jewelry? What coverage are you getting? What coverage do you need?
  • How much personal liability protection will the policy provide? What is the cost of additional coverage? What about an "umbrella" policy?
  • If you have a loss, will coverage be for actual cash value or replacement cost? Have the insurance broker explain the difference.
  • What is the policy deductible? (Generally lower deductibles mean higher premiums, higher deductibles result in lower premiums.) ·
  • How will the policy be paid? If your lender maintains an escrow account, the insurance policy will be paid by the lender -- remember, the house is security for the lender's mortgage. If you pay for property taxes and insurance directly, you will pay the bill. For details regarding escrow accounts and insurance requirements, speak with your lender.
  • Is your home an historic property? If yes, what special coverages are required?
  • When a policy says it covers "personal property" what does that term mean? What does it include and exclude?
  • How can you reduce policy costs? For instance, if you buy auto and home insurance from the same source will your combined expenses decline?
  • What home improvements can you make that would result in lower premiums?
  • How are claims handled if you have a loss? For your protection, it's a good idea to photograph or video your home and special possessions -- and then keep such photography in a safe deposit box.

How to Choose a Planner

You may be considering help from a financial planner for a number of reasons, whether it’s deciding to buy a new home, planning for retirement or your children’s education, or simply not having the time or expertise to get your finances in order. Whatever your needs, working with a financial planner can be a helpful step in securing your financial future.

You should interview and evaluate several financial planners to find the one that’s right for you. You will want to select a competent, qualified professional with whom you feel comfortable, one whose business style suits your financial planning needs.


10 Questions to Ask When Choosing a Financial Planner
1 Q. What experience do you have?
A. Find out how long the planner has been in practice and the number and types of companies with which she has been associated. Ask the planner to briefly describe her work experience and how it relates to her current practice. Choose a financial planner who has experience counseling individuals on their financial needs.

2 Q. What are your qualifications?
A. The term "financial planner" is used by many financial professionals. Ask the planner what qualifies him to offer financial planning advice and whether he is recognized as a CERTIFIED FINANCIAL PLANNER™ professional or CFP® practitioner, a Certified Public Accountant-Personal Financial Specialist (CPA-PFS), or a Chartered Financial Consultant (ChFC). Look for a planner who has proven experience in financial planning topics such as insurance, tax planning, investments, estate planning or retirement planning. Determine what steps the planner takes to stay current with changes and developments in the financial planning field. If the planner holds a financial planning designation or certification, check on his background with CFP Board or other relevant professional organizations.

3 Q. What services do you offer?
A. The services a financial planner offers depend on a number of factors including credentials, licenses and areas of expertise. Generally, financial planners cannot sell insurance or securities products such as mutual funds or stocks without the proper licenses, or give investment advice unless registered with state or Federal authorities. Some planners offer financial planning advice on a range of topics but do not sell financial products. Others may provide advice only in specific areas such as estate planning or on tax matters.

4 Q. What is your approach to financial planning?
A. Ask the financial planner about the type of clients and financial situations she typically likes to work with. Some planners prefer to develop one plan by bringing together all of your financial goals. Others provide advice on specific areas, as needed.

Make sure the planner’s viewpoint on investing is not too cautious or overly aggressive for you. Some planners require you to have a certain net worth before offering services. Find out if the planner will carry out the financial recommendations developed for you or refer you to others who will do so.

5 Q. Will you be the only person working with me?
A. The financial planner may work with you himself or have others in the office assist him. You may want to meet everyone who will be working with you. If the planner works with professionals outside his own practice (such as attorneys, insurance agents or tax specialists) to develop or carry out financial planning recommendations, get a list of their names to check on their backgrounds.

6 Q. How will I pay for your services?
A. As part of your financial planning agreement, the financial planner should clearly tell you in writing how she will be paid for the services to be provided. Planners can be paid in several ways:

A salary paid by the company for which the planner works. The planner’s employer receives payment from you or others, either in fees or commissions, in order to pay the planner’s salary.
Fees based on an hourly rate, a flat rate, or on a percentage of your assets and/or income.
Commissions paid by a third party from the products sold to you to carry out the financial planning recommendations. Commissions are usually a percentage of the amount you invest in a product.
A combination of fees and commissions whereby fees are charged for the amount of work done to develop financial planning recommendations and commissions are received from any products sold. In addition, some planners may offset some portion of the fees you pay if they receive commissions for carrying out their recommendations.

7 Q. How much do you typically charge?
A. While the amount you pay the planner will depend on your particular needs, the financial planner should be able to provide you with an estimate of possible costs based on the work to be performed. Such costs should include the planner’s hourly rates or flat fees or the percentage he would receive as commission on products you may purchase as part of the financial planning recommendations.

8 Q. Could anyone besides me benefit from your recommendations?
A. Some business relationships or partnerships that a planner has could affect her professional judgment while working with you, inhibiting the planner from acting in your best interest. Ask the planner to provide you with a description of her conflicts of interest in writing. For example, financial planners who sell insurance policies, securities or mutual funds have a business relationship with the companies that provide these financial products. The planner may also have relationships or partnerships that should be disclosed to you, such as business she receives for referring you to an insurance agent, accountant or attorney for implementation of planning suggestions.

9 Q. Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career?
A. Several government and professional regulatory organizations, such as FINRA (formerly NASD), your state insurance and securities departments, and CFP Board keep records on the disciplinary history of financial planners and advisers. Ask what organizations the planner is regulated by and contact these groups to conduct a background check. All financial planners who have registered as investment advisers with the Securities and Exchange Commission or state securities agencies, or who are associated with a company that is registered as an investment adviser, must be able to provide you with a disclosure form called Form ADV Part II or the state equivalent of that form.

10 Q. Can I have it in writing?
A. Ask the planner to provide you with a written agreement that details the services that will be provided. Keep this document in your files for future reference.

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