Virginia Homeowners Insurance
Owning a home is great responsibility, but one that is more of a blessing than a burden. Not only does it allow us to put down roots for our family, but it also helps us build wealth through the growing principle and appreciating value over time.
With all of this responsibility is the need to protect what you are building.
When looking into insurance, it helps if you have someone you can trust to help you in the process. For those who do not, there is always the web to do some good searching. When doing this, many find that there may be a fair disparity between quotes for homes and property in the country versus the city and suburbs.
Do not confuse the savings you get in the country with having less need for insurance. Additionally, when insuring an investment property, the need for coverage is just as important, as is the process of moving out of a home that then becomes a rental.
To start, let's jump into the variations in quotes that come with different locations. Be sure to also use the FREE tool above to start comparing insurance quotes.
Country Quotes vs. City Quotes
For those who grew up in areas like Mechanicsville, a trip to go home shopping in Alexandria can leave you with sticker shock, to say the least. The homes in this great historic town, so close to the capital you can see it with from a north-facing window, are extremely pricey.
With high prices on homes, the cost of insurance is also higher. This is because you need a greater amount of coverage. For those who stay near Washington, DC but from the Maryland side, there is some money that can be saved, but there is the drawback of having a potentially worse public school for your children, as you can note in this NBC report where Virginia is ranked 5th overall and Maryland is 40th, proving that savings can sometimes be very costly.
Having said this, there are trade offs with being in a rural area. For one, those who work in a city will have to commute, which can raise your auto insurance rates, and for those who do not like country or suburban living, the higher premiums need to be accepted as a cost of living to one's preferences.
Just as those who live in the country can take the lower cost as a source of validation for their lifestyle choices being the best ones, those who live in the city can consider the premium on their premiums to be a toll that they gladly pay to not have to drive twenty miles to the grocery store.
Now that this is out of the way, many are left unsure as to how much they need to insure their property for.
How Much to Insure for
When you get your insurance, there are a few simple rules to follow. The reason you need insurance is because you cannot afford to replace your home if it is destroyed. This is the same reasoning many use as to why they don't insure a cell phone.
Next, the level of coverage you need is the amount it would cost to construct your home brand new. This is because when your home is rebuilt, it will be.
Next, you can get the same coverage for a lower price if you will consolidate all of your insurance policies with one company. Just about every company offers this discount, and it can make your life easier if you take advantage of it.
This can cover not only the policy on your home and car, but also for life insurance, retirement investments, and even the policy on an investment property.
Insuring Rental Property
When it comes to insuring your rental property, the same message we have been preaching here also applies there. You need to make sure you have accurate quotes, a good local agent you can trust, and that the coverage is up to the cost of completely replacing the home in new condition.
The reason for this is because while the loss of this piece of property may not be as devastating to your immediate situation, it will be to your future. After all, the hassle of owning a rental is counter balanced by the joy of making money and getting tax breaks.
This is why many young people in Virginia today are taking advantage of investing tips, particularly those from gurus like Dave Ramsey and Clark Howard, who teach people to get out of debt, invest for the long-term, and have the best life they can.
In fact, one of the best ways that many people are finding they can do this is by buying a very modest first home that they won't have a problem keeping when they move out.
Turning Your Primary Residence Into a Rental
When you decide to keep your first home to rent out, you need to realize that you can never negotiate on whether or not it is going to be covered. You need both traditional insurance coverage and a flood policy so as to ensure that your investment is protected.
The only other alternative to spending the hundreds of dollars to do this is to always have tens of thousands at the ready for a catastrophic event.
That aside, there are some tips to keep in mind. For one, if your first home is causing stress on your finances, then it may be unwise to hold on to it unless you have had some drastic changes to your income. This could be the result of a significant raise, inheritance, or your spouse finishing school and getting into his or her career.
The reason for this is because there will be periods of vacancy, or - even worse - when an occupying tenant does not pay, or pays erratically. For these reasons, there are many times when it is to your advantage to sell your starter home to take the equity and/or leave behind the monthly payment that comes with the residence.
Whatever benefits you are looking for in tax breaks or the potential for appreciation in the next five years will be hard to focus on when you cannot make the payment or your cell phone is shut off because you bounced a check. The point is, something is going to have to give.
Remember the Basics
What it all comes down to is that you need to do your research. While many people do not care to understand insurance, the truth is that you should understand something you are going to buy for the rest of your life.
And when you make your buying decision, remember that more populous areas like Ashburn are going to incur more costs than towns like Farmville or Dinwiddle.
Use our FREE comparison quote tool below to get started!