How to Purchase Homeowners Insurance for the First Time

Your lender will need you to get home insurance before closing on a new home. While many lenders provide insurance suggestions, selecting a home insurance provider is your responsibility. You are responsible for ensuring that your policy's coverages sufficiently protect your home, detached structures, and personal property.

How to Compare Homeowners Insurance

During the mortgage approval process, your loan professional will inform you of the appropriate time to get homeowners insurance. However, you can begin shopping for coverage once your new address is established. You'll have more time to choose the best coverage and investigate ways to save money if you purchase homeowners insurance early.

Before making a final decision, it is prudent to examine pricing, coverages, and customer ratings, even if your lender provides a referral. You can frequently save money by bundling house and auto insurance with the same insurer or by switching home insurance providers. Learn how to obtain the most affordable homeowner's insurance.

How to evaluate a house insurance coverage

Check your personal property and liability coverage limitations.

Your clothing, furniture, gadgets, and jewelry are covered by Coverage C (personal property) of your homeowner's insurance policy. Ensure that the limit is sufficient to cover all of your belongings. Consider that certain things may fall under a certain category with a "sublimit" established by your insurance company. And if you own expensive objects such as art or jewelry, you may need to add a rider to your policy to cover them in full.

Coverage E (liability) protects you in the event that you are responsible for an incident that injures another person. Be sure to choose a liability limit that adequately covers your assets. Most home insurance policies max out at a $500,000 liability limit. If you require more protection, you can acquire umbrella insurance, which extends the liability coverage of your house and auto policies.

Be Conscious of Exclusions

Depending on where you shop for homeowner's insurance, there will be a list of items not covered by a regular policy. These include earthquakes, mudslides, flooding, and landslides.

Ask your home insurance agent or company whether you can acquire coverage for excluded situations if you are at risk for a peril that is not covered by your policy.

Recognize Your Deductibles

When purchasing home insurance for the first time, it's essential to pay attention to the property damage deductible. Your deductible is the portion of a claim that you are responsible for, so ensure that the amount is affordable.

Unlike auto insurance, the deductible on your house insurance policy will not necessarily be a specific financial number. It could be a percentage of the dwelling coverage on your policy. Your policy may have a split deductible as well. This means that you have a fixed monetary amount for most claims, but a percentage may apply for wind damage and other risks.