Buying a home is an exciting life event. It’s so exciting that we often overlook some of the nitty gritty details, in order to focus on the more fun parts of house hunting. If you are a first time homebuyer, chances are you haven’t given much thought to one big step of the process: insurance. Does the law require homeowner insurance? How much will it cost? What kinds of damage are typically covered? Let’s take a closer look at homeowner’s insurance and how it affects the home buying process.
A standard homeowner’s insurance policy is a package protects you financially in the case of four different types of damages. Typically, you will receive coverage for:
- The home structure, itself
- The belongings inside the building
- Liability in case someone is injured on your property
- Living expenses if you are forced to leave your home due to damages
Typically, most insurance policies cover damages from perils such as wind, fire, lightning, hail and theft. Additionally, most policies will cover you in case of a liability lawsuit in the event of accidental property damage. The cost of homeowner’s insurance will vary depending on the size and location of your home, as well as the amount of coverage you want to purchase. Environmental factors such as flood and earthquake zones may increase your insurance premiums as well.
Although the law does not require homeowner’s insurance, most banks will require you to purchase a set, minimum amount of insurance in order to qualify for a loan. It is possible to qualify for discounts. Installing new smoke alarms, purchasing a deadbolt and keeping a fire extinguisher handy, are all ways to lower the cost. And after you purchase insurance, be sure to reevaluate your policy once a year.
Call you current insurance agent or contact Chris Mauk of Mauk-Bennett