Homeowners Insurance 101

Amanda Flitter

couple holding miniature house modelBuying a home takes time and patience, so when you find the right house for you, you’re probably eager to sign on the dotted line, move in, and take a break from paperwork – and spending money. But what can you do to protect your purchase? After all, a home is one of the costliest and most important things a person will buy in their lifetime.

Enter homeowners insurance. Taking the time to make sure you’ve signed up for a solid homeowners insurance policy that gives you the right level of coverage can help protect your investment and save you headaches if disaster should ever strike.

What does it cover?

Homeowners insurance typically offers financial protection against damages to your home and possessions, and it also covers some disasters. However, make sure you read your policy thoroughly so you understand which disasters it does and does not cover – usually floods and earthquakes are not covered. A typical policy will include coverage for the structure of the home, your personal property, and bodily liability in case someone is injured on your property.

How much does it cost?

Many factors go into determining the cost of homeowners insurance. Things like the value of the home, its location, whether or not there are additional risk factors (for example, having a swimming pool), how much coverage you choose to have, and whether you opt for a lower or a higher deductible all factor into how much you’ll pay for it.

The good news is that, according to Business NH’s 2017 Insurance Guide, cost of homeowners insurance is expected to stay steady after five years of consistently increasing rates. Overall, demand for homeowners insurance has been weaker as millennials are renting for longer.

When and how do I get it?

If you’re financing your home with a mortgage, your lender will likely require you to have homeowners insurance to protect their interest in the property. Since the amount of insurance depends on the home you ultimately buy, it’s time to start shopping when you’ve settled on a home but well before you close. Your best bet is to work with an insurance agent to determine how much coverage you need and to get a policy tailored to your situation.

While you may be eager to quickly buy a homeowners insurance policy so you can move on to picking out paint colors, it’s worth spending some time to find the right insurance for you. It can save you money not only if the worst were to happen, but doing your research and having an honest conversation with an insurance agent can help you get the right rate so you have peace of mind while paying a reasonable price.

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