How To Buy Homeowners Insurance: Tips For First-Time Buyers

Owning your first home is an exciting milestone, but getting there can be overwhelming. Besides the confusing mortgage jargon, there are seemingly endless things to do before the keys are in your hands. One of them is buying home insurance. This is not the same as the private mortgage insurance you purchased to get a mortgage loan. Homeowners insurance is coverage that protects your home and the things in it against unexpected and accidental damages and losses due to fire, theft, wind, lightning, and other disasters listed in the policy.

When you shop for homeowners insurance, some tips could help you choose a policy that adequately meets your needs. This article discusses how to buy homeowners insurance by listing the things to remember when evaluating insurance policies.

How to choose homeowners insurance: Top 6 steps

Here's what to do:

Start shopping for your homeowner's insurance early

You may need to present proof of insuring your home on the closing date - most mortgage lenders ask for it. Since you don't know how to buy homeowners insurance yet, give yourself ample time to look around, assess your coverage needs, and evaluate different policy offers. You might also get a discount that could save you money because many insurers offer early bird discounts.

Get clarity on what the homeowner's insurance covers

Typically, insurers group policies in different tiers, each covering specific circumstances. Most carriers offer three policies: a basic policy covering only a few circumstances, an intermediate inclusive policy protecting your home and belongings, and an intensively inclusive tier covering your home and belongings.

For first-time homebuyers not sure how to choose homeowners insurance, it's best to go for an insurance policy that covers a considerable amount while keeping the costs down. The second tier is most favorable because it covers your home and the structures attached, and often, liability in the event someone is injured on your property.

Insure your home based on the replacement cost, not the market value

A home replacement cost is the amount needed to rebuild it with the same type and quality material. It's different from the market value, which is the home's cash value. The replacement cost is often higher than the market value because it includes the cost of clearing debris from the damage and rebuilding the house. When deciding how to buy homeowners insurance, opting to insure your home based on its market value may leave you with deficits when you rebuild. So, be sure the insurance is based on your home's replacement cost before you sign.

Think about the liability coverage

Your home insurance plan's liability coverage is the section that pays legal or medical fees if you injure a person or damage their property. For example, suppose a guest is injured in your home and needs medical assistance. In that case, you can claim liability coverage to cover their medical expenses or pay litigation costs if the accident results in a lawsuit. So, when determining how to choose homeowners insurance, check the liability coverages and how much each offers. It's best to go for maximum liability coverage if your budget allows.

Consider bundling

Bundling is buying your insurance policies from the same company in a 'bundle.' For example, you could buy your home, life, and auto insurance policies from the same insurer. Bundling makes shopping for insurance easy and paying bills more convenient because you only have to make one payment. In addition, insurance companies give generous discounts if you take out more than one policy with them. So, as you plan on how to buy your homeowners insurance, consider getting it from an insurer you're already working with to receive a discount.

Involve an expert

While this is last on our list of tips on how to buy homeowners insurance, it should be first on your to-do list. Contract the help of an independent insurance agent to guide you through the process. They will help you establish coverage needs by reviewing your house, location, and situation and recommend a policy. A local insurance agent will be better versed in the real estate field and know the happenings in your area for which you need to be insured.

LendMeMoney.com will teach you how to buy homeowner's insurance

Buying a home for the first time is a significant investment and a major milestone in your life, so it's prudent to step gingerly to ensure you make all the right choices. One of them is getting suitable homeowners insurance to safeguard you and your home from unexpected and accidental damages. The above steps are an excellent guide for how to choose homeowners insurance, and you can add to this knowledge with more LendMeMoney.com resources, including a list of the best homeowners insurance offerings in America. Contact us for more information and to get the best offer.