Beyond the Guidelines: The Truth About Home Insurance Every Homebuyer Needs to Know

When most people think about buying a home, their minds go straight to the mortgage, the neighborhood, or maybe the dream kitchen they’ve always wanted. But there’s a crucial piece of the puzzle that often gets overlooked until it’s too late: homeowners insurance.

On a recent episode of Beyond the Guidelines, we sat down with Ron McCalman, an insurance veteran with more than 16 years of experience, to talk about what every homebuyer—and especially first-time buyers—needs to understand about insurance. From the difference between captive and independent agents to the rising costs of premiums and the right time to shop for coverage, Ron laid it all out.

Here’s what you need to know.

Captive vs. Independent Insurance Agents: Why It Matters

One of the first things Ron explained is the difference between captive insurance agents and independent brokers.

• Captive agents (think State Farm, Allstate, USAA) can only sell policies from one company. That means if your premiums rise or the coverage no longer fits your needs, you’re stuck.

• Independent brokers, on the other hand, work with dozens of companies. That flexibility allows them to shop your policy around, not just when you buy your home, but also at every renewal.

“We have over 25 companies we can shop with,” Ron said. “If your rate goes up, we can move you to another carrier without you being stuck paying more.”

This model is very similar to the mortgage world—where independent brokers can offer more options than a single bank or lender.

Why You Should Shop for Insurance Before Buying a Home

Most homebuyers wait until they’re under contract to start thinking about insurance. Ron says that’s a mistake.

Insurance costs can swing your mortgage payment by $100 to $600 a month, depending on the home. That’s the kind of difference that can break your budget or even prevent you from qualifying for a loan.

Ron’s advice? Shop insurance early. Get quotes on the homes you’re seriously considering so your lender can give you an accurate picture of your monthly payment.

The Hidden Factors That Drive Your Insurance Premium

So, what determines how much you’ll pay for homeowners insurance?

• Credit & Payment History – Insurers use something called an insurance score (not a hard credit pull) to see if you pay bills on time and have had past claims.

• Claims in Your Area – Your zip code matters. If there have been frequent storms, fires, or thefts nearby, expect higher rates.

• Tree Coverage & Location Data – Insurers now use aerial imagery to see how much tree coverage is over your home, which impacts risk.

• Material & Labor Costs – With inflation, the cost to rebuild has skyrocketed. In some areas, replacement costs are now $175–$250 per square foot.

All of this means rates are more unpredictable than ever. Ron noted that while premiums have climbed in recent years, there may be relief within the next 12–18 months as the market stabilizes.

Coverage vs. Cost: Why the Cheapest Policy Isn’t Always Best

While everyone wants to save money, Ron cautioned against choosing a policy based on price alone.

“About 80% of Americans are underinsured,” he explained. “Mortgage companies only care about what you owe them, but that doesn’t mean it’s enough to rebuild your home if you have a total loss.”

For example, if you buy a $400,000 home but only borrow $200,000, your lender might be satisfied with $200,000 in coverage. But what happens if the house burns down? You’d be stuck paying the difference out of pocket.

The takeaway: Always insure for replacement cost, not just the loan amount.

The Truth About Filing Claims

One of the most valuable tips Ron shared was about when—and when not—to file an insurance claim.

“Don’t ever call the insurance company first,” he warned. “Call your agent or broker. If you call the company, they’ll often record it as a claim whether or not you go through with it.”

Why does this matter? Because claims can follow you for years and increase your premiums by 20–25%. For smaller issues—like a roof leak or water damage—you may be better off paying out-of-pocket rather than risking long-term costs.

First-Time Homebuyers: Insurance Basics You Can’t Ignore

For those navigating insurance for the first time, Ron emphasized two big things:

1. Credit matters. Strong credit makes everything easier, from getting a mortgage to securing lower insurance rates.

2. Know your coverages. Don’t just accept the lowest premium. Take the time to understand what each coverage line means—liability, dwelling coverage, personal property, and more.

Beyond the Home: What Else You Should Insure

Home insurance is just one piece of the puzzle. Ron explained that families often overlook other risks, like:

• Golf Carts & Recreational Vehicles – In many neighborhoods, underage kids drive golf carts. If there’s an accident, you could be sued without the proper liability coverage.

• Investment Properties & Landlord Policies – Independent brokers often have access to better rates for landlords and investors.

• Umbrella Policies – These extend liability coverage across your home, vehicles, and other assets.

• Mortgage Protection Insurance – Essentially a life insurance policy tied to your mortgage. If something happens to you, your family isn’t left with the debt.

How Often Should You Review Your Policy?

Ron’s rule of thumb: every 12 months.

Inflation, construction costs, and claim history in your area all change rapidly. Reviewing your policy each year ensures you’re properly covered and not overpaying.

And here’s the kicker—it costs nothing to shop around.

Final Thoughts: Protecting What Matters Most

Buying a home is one of the biggest financial decisions of your life, but protecting it is just as important.

The key takeaways from our conversation with Ron McCalman:

• Shop insurance early in the homebuying process.

• Work with an independent broker for more options.

• Focus on coverage first, cost second.

• Review your policy yearly to stay ahead of rising rates.

At the end of the day, homeownership isn’t just about the mortgage—it’s about making sure your investment, your family, and your future are fully protected.

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