Top Homeowner's Insurance Questions for First-Time Home Buyers

In 2017,existing home sales topped 5.5 million,according to the National Association of Realtors. If you're a bout to become one of the many home buyers in the U.S.,choosing the right insurance is part of the process - especially if you're a first-time buyer. Before picking a policy, takea look at what new homeowners need to know about their home's coverage.

Is Homeowner's Insurance Necessary?

If you mortgage your home, the answer to this question is yes.

Lenders require this type of coverage for all home buyers. Homeowner's insurance protects the lender's investment, providing you with the ability to rebuild or repair the home in the event of a natural disaster or another type of damage.

Instead of paying the homeowner's insurance premiums yourself, your mortgage company will pay it for you (along with other costs, such as real estate taxes) from your escrow account.

Homeowners who no longer have a mortgage(or never had one) don't have the same insurance requirement. Even though these homeowners don't need to purchase a policy,coverage is always advisable. The costs of repairing or rebuilding a home after damage or vandalism aren't always easy to pay off without help.

Purchasing a policy fora home that you own outright provides you with a safety net that protects your investment.

Are All Policies the Same?

Simply put - no. There are different levels of coverage to choose from, depending on how much money you want to spend. The broader the policy, the more it covers. Even though buying more coverage will cost more right now, it can save you money if you ever need to use it. An insurance agent can explain different levels of coverage, helping you to choose one that matches your needs and budget.

Do All Policies Pay Out the Same Amount?

Again, the answer to this question depends on the policy and the level of coverage you choose; it also depends on your deductible. Higher deductible policies are less expensive but require you to pay more out-of-pocket if your home needs a covered repair.

Before purchasing a policy, talk to your insurance agent about the cover age and what it pays for. Some policies only pay for the bare minimum, while others cover an expanded list of incidents/types of damage.

Along with the structure itself,ask about the coverage(and pay-outs) for personal property,exterior structures (such as sheds),and costs incurred while displaced from your home following severe damage. This information eliminates surprises later.

Who Sells Homeowner's Insurance?

A wide variety of insurers provide policies for homeowners. While you can find an insurance company (and accompanying policy) online,email and web forms are no substitute for person to person service.

Even though price is certainly an issue, it isn't the only factor in choosing an agency or insurer. Choosing the cheapest quote won't always get you the best service. Make sure that you feel comfortable with both the insurance policy and the agent who is selling it.

Do Insurance Policies Require a Home Inventory?

A home inventory is exactly as it sounds - a document that lists the possessions in your home. While this isn't a policy requirement, this document can help you in the event of damage or another type of loss. Even though an inventory is a smart (and extremely helpful) document, only 52 percentof Americans surveyed have one,according to the Insurance Information Institute.

Are There Extras or Add-Ons for Insurance Policies?

Homeowner's insurance doesn't cover every issue that can affect a home. As a new homeowner, you aren't always aware of the possible problems,accidents,and disasters that can destroy your investment. Talk to your agent about extra or special types of insurance, such as flood coverage, that isn't included in a traditional policy.

Are you buying your first home? Do you need insurance? Contact Coast Comp Insurance Agencyfor more information.