6 Essential Home Insurance Tips for First-Time Buyers

When you’re buying a home for the first time, the process may feel a little overwhelming. There are a lot of things to do that you might not be very sure of how to go about, and that’s perfectly normal. One thing that may give people pause is hiring home insurance, as you might not know what to prioritize on a policy. We’re here to make things easier for you with a few simple tips!

Buying a home is a significant life decision, so it’s easy to see why each step can give you pause. However, it’s also deeply satisfying to have a place to call yours, without having to respond to a landlord. Don’t fret, here are our basic things to keep in mind.

1. Shop Ahead

Usually, when you close a deal on a home, mortgage companies will require some proof of insurance a few days in advance. By closing time, you need to have your place insured. Give yourself at least a month to shop around and find the company and policy that feels right. There’s no need to leave it for the last minute!

2. Research

Another upside of taking your time is the ability to research and find what best suits you thoroughly. We recommend paying particular attention to these four critical areas: house structure, living expenses if you must leave due to an incident, the structure of the house, and liability to others. You should also check the reputation of each company online, leaving no stone unturned.

3. Favor Replacement Cost Coverage

There are two basic ways a policy can cover your expenses: “cash value” or “replacement cost.” Cash value includes how much your possessions would fetch in the open market at the time of damage, while replacement cost means the insurance covers new items that are the same or similar to the ones you lost. The latter option ensures you can have precisely the things you lost, so go for that for both the house and your possessions. Also, check that your policy takes inflation into account!

4. Look Into Claims Response

You might find policies from different companies that look virtually the same. One significant deciding factor should be seeing how they handle claims. Talk to brokers and have them walk you through the process of taking claims. Go for whoever responds quicker, as, in a time of crisis, you’ll need a fast response.

5. Take Inventory

To be safe, take pictures of everything around your home and keep them somewhere safe, perhaps on the cloud. You’ll need them for your claim if there’s an incident.

6. Focus on Big Loss

Think of home insurance as a relief for significant losses, not necessarily the little things. If you’re continually making claims over every little thing, yes, the insurance will pay for them, but you might get a premium raise. If you have more than three applications in five years, the insurer might even drop you as a client, forcing you to go to another company at a much higher rate. Or you could end up having problems in the case of a considerable incident.