Everything You Need to Know About Insurance as a New Homeowner

Written by: Peter Minkoff

There is nothing more exciting than buying a new home. The thrill that comes with finding a new place to live brings a lot of joy to many people, especially new couples who are expecting a child. This joyous moment sure is special, however it is important to stay on top of the technical details of buying a new home. In the heat of the moment, people often overlook one key aspect of buying a new home and that is getting the right insurance. This one crucial element alone could be a potential deal breaker, because without adequate insurance some properties are just not worth it. This is for a good reason, factors which affect the insurance coverage far extend beyond the confines of the home itself. There are a lot of external factors to take into consideration as well. Luckily, this exciting new chapter in your life doesn’t have to be too complicated if you understand a few key points first. Here is an overview of everything you need to know about getting insurance as a new homeowner.

Know your surroundings

When you first find a potential house that you would like to buy it is extremely important to get as much information about it as possible. This gives you a good starting point for determining the potential insurance costs. Things such as the condition and the age of electrical, plumbing and other systems in a house, as well as the materials used during its construction all play a big role in make the initial cost estimation. In order to do this, you can research current building codes and material recommendations to get a solid idea of what to expect. Once this is done, it is really important to extend your research beyond the scope of the house itself. The home’s location and its surroundings also play a key role for determining your insurance premium. If your selected area is prone to harsh weather conditions or even floods and fires it is well worth considering adjusting your insurance to these. A professional insurance agency will help you adequately assess the situation and offer you the best possible coverage for your particular scenario. In the USA, locations where homeowners pay the most for their insurance based on this factor alone include: Florida, Texas and Louisiana with significant claims for wind and water damage.

Learn the extent of your coverage

It is really important to know what your policy does and doesn’t cover. A basic coverage will make it seem like everything is fine on the surface such as water damage, electrical installations or roof leaks. However, issues that come up during maintenance are not usually included such as mold, infestations and other potential risks which are less obvious. If your home has valuable rare possessions such as a wine collection or fine art you also need to consider getting coverage for this as well.

Look for discounts

There are things which you can do in order to be eligible for a discount. Firstly, it is a smart idea to ask around and see if your insurance professional offers any discounts in the first place. In most cases there are several ways you can get a discount. For instance, people who are over the age of 55 and are retired can receive a price break. You can get a discount in a more proactive way as well. Most of the time when you modernize your plumbing or security systems you can ask for a discount.

Update your insurance

Around 60% of homes in the United States are said to be underinsured. This is because the coverage doesn’t amount to the home’s replacement value. This is the cost that it would take to completely rebuild the same house from the ground up. There has been a significant increase in the price of building materials. This is important for you if you have recently remodeled or rebuilt a part of your house, because your insurance coverage should be refreshed to meet the newly increased replacement cost. This will benefit you in the long run since you could potentially save thousands of dollars if the situation requires it.

Don’t neglect liability coverage

In order to avoid potential lawsuits against you in case a visitor gets injured at your residence, it is a good idea to consider getting an increased liability coverage if your home has potentially hazardous areas such as swimming pools.

Although buying a home is really exciting it is important to pay close attention to how you handle your home insurance. Consider your new home’s location and other external factors, learn what you are actually covered for, search for discounts, make sure to update your insurance and increase your liability coverage.

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