Your home is probably the biggest investment you’ll ever make. Before you even move in, make sure to protect it with a comprehensive home owner insurance policy. If you’ve bought and sold multiple homes over the years, you’ve probably learned a thing or two about home insurance. If you are a first-time buyer, you may feel overwhelmed by the prospect of selecting an insurance policy. Here are some tips to help you sort through what may seem like a confusing maze of home insurance.
Know What’s Essential and What’s Optional
If you buy your house outright with cash, you are not required by law to have insurance, although it is highly advisable. If you carry a mortgage on your new home, your lender probably requires you have a basic home owner insurance policy to protect what is still, essentially, their property until you pay off your loan. First and foremost, a basic policy covers your house and other structures on your property, such as a garage and storage shed, and your personal belongings. If your house catches on fire, a tree falls on your roof during a rainstorm or a pipe bursts and floods your house, a basic policy will help cover the damage. These policies also cover expenses you may incur if you have to move out of your damaged house while it is being repaired. A basic policy should cover any medical bills that may arise if someone is injured on your property and any money you may have to pay the injured party if he successfully sues you. In addition to your basic affordable home insurance policy, you may be well advised to add optional coverages. Where you live plays a big role in whether you should buy these coverages and if you do, how much the policies should be worth. Examples of optional coverages include earthquake, windstorm, and flood insurance.
Decide How Much Coverage You Need
A good rule of thumb for choosing a policy amount is to insure your home for its replacement value. In other words, if your home burns to the ground, you want your insurance policy to pay enough to cover the cost to rebuild it and replace all of your possessions. Calculating that number is trickier than you may think. Fortunately, insurance companies have computer software to help you pinpoint how much it would cost to replace your home. This software takes into account such replacement expenses as building materials, permits, labor, excavation, debris removal and more. From choosing a deductible to identifying replacement value to deciding which optional coverages you need can be difficult. Buying a new home is exciting, but if it’s your first time, it can also be a bit confusing. If you’re a first-time home buyer looking for affordable home insurance, contact us. We’ll help you identify which coverages, deductibles, and policy amounts make sense. Steven Graves Insurance Agency is one of the most highly regarded independent insurance agents of Dallas, TX, and we’d love to insure your new home.