Home Insurance Basics First-Time Home Buyers Should Know
Buying a new home can come with many considerations. From taking care of the property taxes, figuring out the number of bedrooms needed, down to the best neighborhood to pick, many crucial factors need to be considered.
After taking care of all the paperwork involved, getting homeowners insurance often becomes an afterthought. However, you will be putting one of your most significant investments in jeopardy if you put getting home insurance on the back-burner.
If you’re a first-time home buyer, getting homeowners insurance can give you much-needed peace of mind since you are protecting yourself from the risk of liability and any legal claims. Any possible damage to your new home is also covered.
While any homeowner can benefit from getting home insurance, not all homeowners insurance policies have been created equal. If it is your first time getting one, here are all the basics you need to know:
Homeowners Insurance Coverage
As a new homeowner, it is crucial that you are aware of the things your homeowners insurance covers. A typical homeowners insurance policy covers the following:
Your insurance provider will pay for the rebuilding of your home’s structure if any cause damages it unless the cause of the damage is specifically excluded like floods.
Your personal belongings will be replaced or repaired if the cause is covered by the policy like fire or theft. Typically, you have the option to upgrade a policy to cover contents for other problems unless named as exclusions. This also provides broader coverage for your belongings.
Medical payments to others
Your provider pays for minor injuries if a guest gets hurt or injured on your property. Generally, the coverage amount is minimal, between $1,000 and $5,000.
Additional living expenses coverage
Your insurance provider will pay extra “loss of use” expenses such as meals, hotel bills, laundry services, pet boarding, and other costs if you won’t be able to live in your home because of a problem that is covered by your policy like fire or tornado.
Insurance providers will pay for property damage or medical expenses that members of your household might cause to others. For instance, your provider will pay if your child knocks a baseball through the neighbor’s glass window or if your beloved canine companion bites someone.
Liability insurance also covers the legal defense if you are sued over damage or injury. Liability limits on homeowners insurance policies usually start at $100,000. Your liability insurance will also cover what you can lose in a possible lawsuit.
Evaluating a Home Insurance Policy
To evaluate your home insurance policy, you need to:
Have a clear understanding of your coverage level.
You need to be fully aware of the maximum amount that will be paid for your belongings, loss of use, dwelling, and liability lawsuits against you. This is crucial so that you can avoid any unpleasant surprises later on.
Pick your deductibles.
Essentially, a deductible is the amount that’s deducted from your insurance claim check. If you want to save money, you can raise your deductible. However, you need to remember that there are deductibles that are tied to a specific damage. For instance, in some states, there’s a deductible for wind damage.
Compare rates accordingly.
It is recommended that you get quotes from different insurance providers. If you already have car insurance, check with your agent if you can avail of a multi-line discount for ensuring your house and vehicle in the same company.
To determine the homeowners insurance that best fits your need, consider it best to talk to your insurance agent. Your agent can review your specific circumstances and can recommend the insurance policy that is right for you.
About the Author:
Rachael Harper is the Content Marketing Strategist of Bennett & Porter, a wealth management and insurance firm based in Scottsdale, Arizona. When not writing, she makes use of her time reading books and playing bowling with her family and friends.