A First-Time Homeowners Mini-Guide To Insurance

Congratulations! You bought your first house. As you may already know, when you buy a house with financing, you’re required to have homeowners insurance.

Here are a few things to look for to get the best homeowners insurance.

What Is Homeowners Insurance?

Homeowners insurance is a type of property insurance that provides financial protection to homeowners from damages to the home and valuable items. The insurance can also cover injuries on the property or in the home.

What Are Some Qualities Of Good Homeowners Insurance?

Appropriate coverage limits. While the limit won’t be the exact value of the items covered, it should be an accurate representation. If the limit is too high, then the premiums will be high. If the limit is to low, then there may not be enough funds to replace the damaged property.

A rebuild guarantee, no matter what the cost. This could require the insurance company to pay more than the coverage limits of the policy.

Inflation provisions. This will allow for the company to adjust the coverage limits of the policy every year while taking into account inflation.

Good customer service is an integral part of having good homeowners insurance. Checking customer reviews online can give insight into how a company treats customers.

How Much Does It Cost?

There are three main common forms of homeowner’s insurance: basic, broad, and special form.

The basic form covers 10 of the most common risks such as fire or leaky roofs.

The broad form covers everything from basic, plus additional risks such as falling objects.

The special form includes any risk unless mentioned in the policy. The cost of insurance increases with the number of risks covered and also depends on the value of the property, the value of the items in the home, location, and whether any added endorsements.

What Does It Cover?

Homeowners insurance policies offer protection in four main areas.

One area is the protection of the home. This includes damage from fire, smoke, hail, wind, and lightning strikes.

The next area is personal property coverage. This protects items in the home such as furniture, electronics, and clothing. Other structures coverage includes outside objects, like sheds, fences, or detached garages.

There is also liability coverage, which helps pay for medical bills and lost wages of injured, and legal expenses.

Homeowners insurance doesn't cover damages from floods or earthquakes. Those living in areas where these events occur can buy separate flood or earthquake insurance.

Homeowners should identify their needs, research, and compare insurance companies. Careful consideration can make your home a well-protected investment.