Congratulations! All your hard work paid off, and you’re ready to purchase your first home. You should be proud of yourself and this massive milestone. As you know, buying a home comes with many expenses, fees, and paperwork. From choosing the perfect property to finding the best homeowner’s policy, being a first-time homeowner is a thrilling but overwhelming experience.
Purchasing homeowner’s insurance should be at the top of your “to-do” list to ensure that your belongings and property are financially covered. Although there are many companies to choose from, there are also various ways to customize your plan based on your location and provider. Here are a few tips for first-time homeowners purchasing insurance to help make your insurance shopping easier.
Budget Enough To Pay Out of Pocket
When shopping for insurance, ask the agent if the policy’s deductible is a percentage or fixed dollar amount. Your deductible is the sum you must pay when filing a claim before the insurer pays their portion. Working with an affordable company that will negotiate with you is important. Ensure that you choose an insurance policy you can afford just in case you need to file a claim.
Know What Your Policy Doesn’t Cover
Homeowner’s insurance covers a lot of surprising things. It’s important to ask the insurance agent or check their website for exclusions in their policies. Many homeowner insurance policies will list damages they won’t cover. Depending on where you live, some insurers won’t cover earthquakes, floods, mudslides, or natural fires. However, you can always check if there are any available add-ons you can purchase separately.
Consider Bundling Your Insurance
You can save money by bundling your insurance policies together. For example, if you have auto and home insurance, you could save up to 25 percent! However, it would help if you compared individual policies to bundles across multiple insurance companies to determine what’s cost-effective. You should also ask if there are any special discounts for adding upgrades.
Calculate How Much Coverage You Will Need
The most important tip for first-time homeowners buying insurance is to calculate how much coverage you will need accurately. You should calculate this number by estimating its replacement cost, not its market value. Ask yourself, how much would it cost me to repair this properly? And that’s how you’ll know how much you need in coverage. Talk to your insurance agent to accurately assess the property and the coverage estimate.
