Homeowner Insurance for First Time Home Buyers

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In the excitement of shopping for a new house, finding the one that feels like home, bidding and getting your offer accepted, it's easy to overlook the insurance you will need. In the avalanche of paperwork that accompanies a transfer of property ownership and mortgage compliance it's tempting to just do what you have to do to get the insurance portion of process put to bed as quickly as possible. But it's worthwhile for several reasons to linger just a little on the important detail that is home ownership.

Insurance to protect your home or the bank?

If you borrowed money from a bank to acquire your home the lender will require that you carry insurance on your new home sufficient to protect their interest in the home - the money represented by your mortgage amount. That's fine for the bank but it likely won't be fine for you.

Standard homeowner insurance coverage:

A standard homeowner policy will provide coverage for your house and other structures, your personal property and some money for extra living expense should you experience a loss that would prevent you from living in your home for a period of time.

Also included in a plain vanilla policy are liability coverage which will protect you should a family household member damage the property of another or cause an injury.

Homeowner insurance policy limits, exclusions and type of coverage:

Is a homeowner insurance policy equal to the amount you paid for you new home the right amount of insurance? Maybe. But consider a catastrophic event like a major fire, flood, earthquake, tornado or hurricane...when a large number of homeowners and businesses suffer property damage the demand for building supplies and labor goes up dramatically. Following the laws of supply and demand the cost of those supplies and services increase with demand, often substantially. If your homeowner insurance policy doesn't include adequate provisions for those cost increases you could find yourself with a serious coverage gap.

...and since we have brought up flood and earthquake it's worth mentioning that those events are not covered in a standard homeowner policy but can be insured against with other insurance. Each homeowner policy includes other exclusions and limits on the amount of insurance that will be paid in a particular loss and all this makes a comparison of homeowner policies based on price alone meaning less.

The advantage of an independent insurance agent:

As an independent insurance agent we represent several top-rated insurance companies. We can help you assess your home insurance coverage needs, compare options and get the right policy in your hands so you can close on your new home on time and worry free.