Buying a new home can be both exhilarating and a little bit scary. You have this new home that you take pride in, but you aren’t quite sure where to begin when it comes to home insurance. You’re not alone; this is a common issue with new home buyers.
What is Homeowners Insurance?
Mortgage lenders require that you have homeowners insurance for your house. If you’re financing a house’s purchase, proof of insurance will be required before the closing. The reason is your home is collateral for the mortgage loan. Mortgage lenders want to be sure the home is fully insured to guard the value of your home in case anything happens.
Even if you pay in full for your house, it’s still wise to have insurance. Accidents are inevitable, hurricane damaged roofs, fire, water pipes breaking any number of incidents may happen. Even if you paid for your home in full, it doesn’t mean you would have enough money to replace it if something were to happen.
What are the Types of Home Insurance?
Comprehensive
The name says it all, comprehensive insurance covers just about everything. It insures your house and personal property such as furniture and electronics, it has liability protection and covers medical payments unless the policy specifically excludes it. Most comprehensive insurance has these clauses:
- Dwelling Coverage: This clause covers repairs or rebuilding your home if it’s damaged or destroyed in a catastrophic event.
- Personal Property Clause: This clause replaces stolen or damaged personal property such as a laptop or a TV.
- Personal Liability Clause: This clause covers medical bills and any lawsuits if someone is injured while on your property.
- Medical Payments Clause: This clause covers the medical bills of anyone injured on your property.
As you can plainly see, comprehensive homeowner’s insurance gives you blanket coverage that can let you sleep easy at night. It also has customization options. It lets you choose a policy that either pays for the actual cost or the replacement cost of your personal property. For example, the actual cost would be your laptop’s current value, where the replacement cost gives you the dollar amount you’d need to buy a replacement. Keep in mind, the better the coverage your homeowner’s insurance gives you, the higher your monthly cost. That being said, you will have to carry comprehensive protection inf you are paying out of pocket for your house.
Standard Homeowner’s Insurance
Standard homeowner’s insurance covers most things with the exception of medical bills and liability. If your house burns to the ground, standard homeowners insurance will pay for it.
Other Coverage
Frankly, other insurance coverage doesn’t cover enough to warrant having it, and most mortgage lenders won’t accept any less than comprehensive insurance.
Megan Dowdy Realty Can Help You to Find the Right House
At Megan Dowdy Realty, we can guide you to the right house for you and suggest some insurance providers. If you are ready to buy a house, call us today or complete our easy contact form online. Don’t wait any longer to buy the house you want, call today!
