Why do I need Insurance?   If you plan on getting a mortgage then you must be aware that your lender will not even consider loaning you money unless proper proof of insurance is shown. This protects the mortgage company if a loss were to occur.What if an unexpected loss were to occur? Example: a fire breaks out and destroys your home and contents. Different insurance coverage’s can protect you from these disasters. There are two basic concerns involving home insurance: protection and price.

What does a homeowner’s policy provide protection for?   A standard homeowner’s policy protects against fire, lighting, storms, hail, falling objects (including a plane!!!), theft and vandalism. Your standard HOB provides protection for the cost of rebuilding or repairing your home if it is destroyed by the above disasters. It also covers your home contents up to the fixed dollar amount stated on your policy. And lastly it protects you if you are held liable for injuring people or damaging property up to your policy limits.

What determines the price I will pay for my home insurance?   Location: If you live in the city you will generally pay a higher premium because you are at a greater risk for fires and theft then those in a suburban area. On the other hand, if you live out in the country you will probably pay a higher premium because the fire department would be further from your home, which would take them longer to arrive.

Construction:   Whether your house is made of wood or brick matters on what you will pay your insurance company. Why? Well, wood burns faster than brick.

Age:   Older houses usually cost more to insure. Old wiring, plumbing, roofs are considered more susceptible to fires.

Do you work from home?   If so, are you covered? If you work from home and expect your homeowner’s policy to cover you then you should keep reading. You may need to add an endorsement or even get a separate policy.

The Texas appeal’s court gave us the definition of a business pursuit in 1991 as follows:
1. an activity done on an regular basis
2. a profit motive is intended or financial gain is intended

Here are some examples that you will need an endorsement or a separate policy to have coverage.
    Child Care/Day Care
    Property Rental
    Hobbies for a profit such as crafts
    Product/Service Sales
    Farming

Do you have expensive items such as jewelry, furs or computers? Take into consideration that you have certain limitations on personal property. You may need to schedule these items.

What does scheduling mean?   A standard HOB policy has limits of coverage to items such as art, jewelry, furs, collectibles and computers. If you have items such as these you will need to schedule them in order to be compensated if a fire or theft were to occur.

An insurance agent can help you select the appropriate coverage’s for all of your property.

Now discover one of the most valuable references you should have as part of your insurance protection.



The IRS recently issued a private letter ruling that lets taxpayers make a choice in deducting
points paid on a home mortgage. Points can either be deducted in full in the year the home is
purchased or pro rata over the life of the loan.

If you take the standard deduction in the year you purchase a home, keep this ruling in mind.
By amortizing the mortgage points over the loan's life, you'll enjoy a tax break that would
otherwise be lost.


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