Insurance – First Time Buyers

7 Nov , 2014  


First time homeowners are sometimes confused by how much insurance they will need and exactly what it covers. Here are some tips to help you choose the best insurance.

What Should Be Covered
The coverage stated on your homeowner’s insurance policy should truthfully reflect the amount that will cover the expense of rebuilding and refurbishing the entire property should you lose it in, say, a fire. The insurance companies tend to use a cost estimator to determine this cost but if you prefer, you can have a builder assess the property and give you an accurate estimate.

Once you have that estimate, people taking out home insurance for 1st timers need to decide which coverage to take. The three main choices are:

1. Extended replacement coverage which involves capping the payout you would receive to about 125% of the entire insured value of the house.
2. Inflation guarantee – also known as guard, this feature will ensure that the insured value of the home stays aligned with the marketplace.
3. Guaranteed replacement cost coverage – with this coverage, the insurance company will bear the cost for rebuilding the home, no matter what the cost is. There are very few companies that offer this option.

Liability Insurance
Home insurance for 1st timers needs to include some degree of liability insurance – should someone hurt themselves on your property, for example, or a tree from your property falls over into the neighbor’s property and causes damage.
This type of insurance will protect you from the financial uncertainty arising from injury or property damage that may be caused to other people.

You need to have enough liability insurance to ensure your assets won’t be at stake. The coverage on the homeowner’s policy will protect your future paychecks, your stock investments, your retirement accounts and any other equity to your name.

Make sure you discuss all the assets that require protection with your insurer to make sure you get the right level of liability coverage for your circumstances.

Additional Coverage for Valuables
The standard homeowner’s insurance will cover your home and personal belongings including electronics, clothing and furniture, against theft, fires, accidents and disasters. Often the policy will cover precious items like watches and jewelry too. If you only own a small amount of not very valuable jewelry, the basic home insurance for 1st timers may well be good enough. But if there is sentimental value or high value involved, it is worth considering taking out additional coverage.

Final Words
Home insurance for 1st timers and long-time homeowners will keep your home and possessions safe when you’re not there. It offers an important sense of protection and peace of mind. Before settling on an insurer, make sure you look at recommendations and current customer reviews to ensure your provider is reputable.

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