Homeowners insurance offers financial coverage for your home and assets in case of damage or theft. Further, it also includes liability coverage that protects you financially if someone else injures themselves on your property.
Most mortgage providers will require you to have a home insurance policy for the loan to come through, given that it is in their best interest that your home is insured. However, if you are purchasing your home with cash, you are legally not required to have home insurance. That said, it is still a good idea to get it anyway. Here is a quick guide for those purchasing home insurance for the first time:
Shopping for Home Insurance
It’s best to not leave purchasing home insurance for the last minute. While your mortgage provider may have certain recommendations about home insurance companies, make sure you do your research and start the process well in advance. In fact, if you have health insurance or auto insurance, you should, ideally, check if bundling your policies can give you any discounts.
Be Aware of Your Coverage Limits
Before you zero in on a policy, ensure that you are well aware of what the coverage includes. Keep in mind that your policy could have some sub-limits, and you may need to purchase a rider in this case.
Check the Policy Exclusions
It’s also important to be aware of events or damages that your policy won’t cover. For instance, most home insurance policies do not cover damages caused due to earthquakes, flooding, and landslides. So, if you live in an area that is prone to such perils, it’s best to check if you can purchase additional protection for the excluded incidents.
Know Your Deductibles
Your home insurance deductible is likely to be a certain percentage of the claim amount. So, if you raise a claim, you’ll need to pay the deductible amount out of your pocket. Given this, it’s smart to check whether the deductible amount is something you can afford.
Cost of Home Insurance
The cost of home insurance can vary widely based on where you reside. So, make sure to shop around and compare premiums quoted by different insurers before you make your decision.
Home insurance can help you save a lot of money in the long run. So, make sure to purchase one that meets your needs at the earliest.
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