Buying a home can be a simultaneously exhilarating and intimidating experience, especially if it’s your first time doing so. You’ll have a long list of important things to consider such as location, size, style, number of bedrooms and bathrooms, and of course the price. One thing that can be easily forgotten during all this is homeowners insurance. If you own a car, you’ll already have auto insurance to cover your liability in case of accidents and potentially to protect your car. You’ll need something similar for your new home.
A homeowners insurance policy can protect your home against disasters, protect your personal property within the home, or provide you with protection against liability for injuries or other accidents on your property. The best time to organize your plan with a home insurer is immediately after moving in, if not before. In fact, some lenders will require you to have some level of homeowners insurance before they’ll approve you for a loan. There are a few types of coverage you’ll want to consider to find the best deal for you.
This protects the objects in your home, and you’ll likely want some level of coverage to protect expensive items or those with sentimental value. Even if your home itself is covered in case of a natural disaster, the personal property within can get extremely expensive to replace. Calculate the value of all items you would want to replace in case of a disaster to help you determine how much coverage you should take out. It’s also a good idea to take photos of these items so you can prove your loss if you ever need to make an insurance claim. There are two main types of personal property coverage.
New for Old: These plans cover you for the entire replacement cost of damaged or lost items. These plans cost higher premiums, but they offer the best value since all your items will be replaced with new, higher-value ones.
Replacement Value: These plans are cheaper, but they’ll only reimburse you for the current value of your items. Since the value of most items will depreciate over time, you may still be stuck covering costs yourself.
If you’ve rented before, you’ve probably had contents coverage, but building insurance will be new for first-time homeowners. Building insurance protects against natural disasters as well as things like fires and floods. Building and contents insurance are often sold together, and buying them as a package is usually the best value. These are the main types of building insurance.
Total Replacement Cover: This type of home insurance policy is typically more expensive, but it covers you fully for all costs to rebuild your home and return it to its state before the event that damaged or destroyed it.
Sum-Insured Cover: You can likely get this coverage for a lower premium, but it only covers replacement costs up to a specified amount. You’ll need to carefully calculate the value of your home based on its size and materials, as well as the cost of labor for repairing it, so you’ll know how much coverage you need. It’s best to discuss this with an insurance agent to make sure you get it right.
In fact, while you’re talking with your insurance company, ask if you should take out any additional coverage such as flood insurance. Depending on your area, general building coverage may or may not cover all types of disasters. You’ll generally be covered for events your area is prone to, but expecting the unexpected can save you significant costs. Comparing home and contents insurance with Iselect is easy using home insurance compare. Find a great plan with the best rate for you.