The emotions that come with purchasing a home for the first time can run the gamut from excitement and exhilaration to confusion and concern. And every one of them is completely justified, given the range of questions being asked, decisions being made, papers being signed and dollars being doled out at seemingly every turn.
Advice also typically flows in from numerous corners on any number of topics that are brand new to the new buyers, and few are as important as homeowners insurance. Among the unforeseen issues first-time home buyers encounter perhaps more than any other, says Brian Bergman, President/CEO Personal & Commercial Insurance with Meyerson-Roth Insurance in Long Beach, “is they just are not aware of what it takes to maintain a home.”
“When it relates to insurance, it’s always that maintenance issues happen,” Bergman says. “They don’t understand what it’s like to maintain a house, to keep things on the up and up so you don’t have a problem.”
They never seem to cover that on all those home-show and real estate TV series showing new buyers flipping or loving or listing a property.
“We see that a lot, where people have owned the house for three, four, six months, and they’ll call up, saying, ‘I’ve noticed a crack in the foundation, I have mold in this closet, the roof is warped, the floors creak,” Bergman says. “They have to understand that this is all part of owning a house. You have to keep on top of the maintenance. You can’t let that dripping water faucet drip—you have to fix it before it’s a broken pipe. Or the leaky toilet that turns into this or that.
“So that’s my advice for first-time homeowners—understand everything you can about maintaining a house. Even if you don’t do it yourself, just understand what has to be done. They get these home inspectors who will tell them everything’s in good shape, or this has five years left so don’t worry about it, but that doesn’t help them on how to clean their air conditioner or how to clean their heating system. Keep the refrigerator clean so it doesn’t break down. I’ve had dryer fires—people don’t actually know how to clean the dryer vent. It’s that simple. ”
Another area Bergman says first-time home buyers could better understand and focus on earlier in the process is their valuable item coverage. This could be an engagement ring, a watch, perhaps some artwork.
“They don’t think to cover those things, because as a first-time home buyer there’s that whole rush to get paperwork in for the real estate brokers and the lawyers, and they want to get all that stuff so they can close on the house,” Bergman says.
“They don’t think about what they need, they just want to know that the paperwork is in so they can close on the house,” he adds with a knowing smile, borne of experience over years in the business. “It becomes a challenge to explain to people, ‘Oh, while you are looking at a homeowners policy, let’s discuss—do you have jewelry, do you have artwork, whatever it may be that should be covered separately? They don’t want to hear about that. It’s just ‘give me enough to get to the closing, so I can get the mortgage.”
Down the road, of course, such conversations will become more important. “Your seasoned home buyers, through their experience and sometimes having a problem, they’re more attuned to those kinds of things. Plus, over time they collect more things. First-time home buyers aren’t really concerned with that one watch or that one ring—but they should be.
“I had somebody lose an engagement ring during the move,” Bergman continues. “It got lost in a box when they were unpacking. They didn’t have it covered.”
Such a cautionary tale applies not only to first-time home buyers, of course. And part of that tale, Bergman says, is the fact that many people either don’t think items such as jewlery or the like are worth covering, or they believe under their policy these items are automatically covered. That likely isn’t the case.
“Anything of value based on its rarity is a difficult thing to insure on a standard homeowners policy,” Bergman says. “That’s why they have these floaters and riders to add things like artwork and jewelry—and I don’t want people to skimp on that. I understand it’s an expense, but when they lose something, sometimes it’s devastating for people.”
Brian Bergman is President / CEO Personal & Commercial Insurance at Meyerson-Roth Insurance in Long Beach. Learn more at yourcoverage.com.