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Homeowners Insurance Basics to Help First-Time Home Buyers

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Insurance is one of many items that must be taken care of before you buy a home. First-time buyers in particular may need to get up to speed on homeowners insurance basics. Mortgage lenders typically require insurance to cover your loan balance, but it’s up to you to secure a policy that provides the coverage you need for the property itself. Shopping around for pricing and features can help you find the right policy for your new home.

“Buying a home can be stressful, especially for first-time home buyers, and it can be easy to not take the time to research what’s needed to protect your investment,” said Justin Vedder, Vice President at CastleLine Risk and Insurance. “Doing your research on homeowners insurance options and finding a company that can guide you in the process should be a priority to make sure you have the right coverage for your new home.”

Understand What’s Covered

Homeowners insurance policies cover property damage to your home and the contents. They also cover temporary living expenses, in the event that you can’t remain in your home. Some programs also offer open perils coverage, which includes damage caused by natural elements like fire, lighting and wind. Water intrusion is one area where you want to clarify the coverage stated in your basic policy. Damage from a leak inside your home may be treated very differently from water intrusion related to an external event like a heavy rainfall.

Consider Liability Coverage

Personal liability is another important consideration when you’re purchasing homeowners insurance. Liability insurance included in a homeowners policy can cover accidents and other events that cause injury to another person or their property. According to the Insurance Information Institute, liability insurance may also include damage caused by your pets. Ever worry that when you take your dog over to the neighbor’s place, she might forget her manners and leave her mark on their expensive carpet? With liability coverage, it may be OK — at least financially. Make sure you’ve read and understood all of the terms and conditions before you purchase any homeowners insurance.

Liability caps start around $100,000, but you can talk to your insurance professional about the level of protection that’s right for you. And even if you never use your liability coverage, it offers many homeowners peace of mind.

Combine Policies for Best Pricing

If you already have an auto policy, you may want to reach out to your current insurance agent for the cost of a homeowners policy. Staying with the same agent could nab you the best pricing through a multiplan discount. Develop a working relationship with your agent can help you understand the coverage provided in your homeowners policy and its limitations. In addition to using the same agent, National General Insurance notes that you can save up to 20 percent on your homeowner’s policy by investing in multiple features like a security alarm system, smoke alarms and other safety features.

Research Additional Coverage

Depending on your home’s location, you may need additional coverage for items like floods, earthquakes or hurricanes. Typically, flood insurance is not a part of basic homeowners policies. The National Flood Insurance Program is administered through many insurance agents, who can help you get the proper coverage if your home is prone to this risk. You may also want to consider additional coverage for personal articles with high monetary values. Take an inventory of your belongings, and determine if you need coverage for items like jewelry, fine china or silver beyond what’s provided in a basic homeowners policy.

Insurance helps you manage the risk of unplanned property loss. Today’s homeowners policies cover everything from theft to a volcanic eruption. So no matter if you live in Maui or Marietta, understanding homeowners insurance basics can help you assess your greatest risks and build a policy to manage potential losses. As you work through the settlement process, don’t forget to include shopping for homeowners insurance on your to-do list.

The information contained herein is not an offer to sell or a solicitation to buy any insurance product. No insurance product is offered or will be sold in any jurisdiction in which such offer or solicitation, purchase or sale would be unlawful under the insurance or other laws of such jurisdiction. Some products and services may not be available in all jurisdictions. The information contained herein is provided for general marketing purposes only. For terms and conditions of coverage, please refer to the specific insurance policy.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Owners.com, Altisource or any other Altisource® business or entity. The foregoing content is not intended to constitute, and in fact does not constitute, financial, investment, tax or legal advice by the author, Owners.com, Altisource or any other business or entity.


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