Here’s What you Should Know About Buying Home Insurance

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You’re about to buy one of life’s biggest purchases, a home. Getting your new house insured is as important as choosing the property itself.

Finding out exactly what your homeowners’ insurance covers prior to taking it out is necessary, according to Experian, a consumer credit reporting agency.

Related: Here’s How to Get Your Credit Ready to Buy a Home

You don’t want to find yourself paying out-of-pocket after an incident. That’s where choosing the right homeowners’ insurance plan is crucial.

According to Experian, standard policies would normally include:

• Liability Protection – If someone visits your property and gets hurt.
• Dwelling Coverage – If your home is damaged or destroyed by high wind, fire, or vandalism.
• Additional Living Expense – If you need to be rehoused while your own property is being repaired or rebuilt.

Experian also notes that homeowners insurance generally doesn’t cover damage caused by earthquakes, floods, and sinkholes. It also does not cover water damage from backed-up sewers, septic tanks, or drains, among other disqualifiers. 

You can use different methods to look for your new policy, either by checking comparison sites or looking at different companies’ websites directly.

Related: How to Build Your Credit From Scratch

Checking with your current provider, like your auto insurance provider, for example, is a good start. Use that agency as a benchmark for future quotes with other insurance companies.

Compare like-for-like policies and the prices, also bear in mind the customer reviews to get a grasp of what the companies are like when dealing with customers.

Each insurance company will have different add-ons for each policy to suit your circumstances. 

Experian says extras can be added onto your standard policy that could include:

• Replacement Cost Coverage – Replaces existing electrical equipment in your home with similar items.
• Collectibles – If you own collectibles like art or jewelry, this could be added to your policy in the form of a floater or endorsement.
• Flood or Earthquake Insurance – If you live either on a floodplain or your property is known to have earthquakes, you could add flood or Earthquake insurance to your policy, depending on your geographical location.
• Additional Living Expense – If your home is damaged and you need to be temporarily rehomed, you can extend your Additional Living Expense coverage.

You can also get some good deals if you shop smart when buying your homeowners insurance.

Related: How to Find a Financial Advisor

Make sure that you have a good credit score. Also building your credit higher can help you pay less on your policy.

Look into insurance bundles with your current provider. Oftentimes, discounts are applied based on the number of policies held with a certain agency.

Also, look to see how much you can save and any discounts provided if you add improvements to your property prior to taking out the policy.

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