Whether you’re a first-time homebuyer or looking for a new home insurance policy on the house you’re already in, it’s crucial to find the coverage you need. Home insurance typically consists of several key components that provide coverage for different aspects of your home, including dwelling, personal property, and liability. When shopping for a policy, it’s crucial to ensure that your coverage limits are adequate to protect your assets. In this article, we’ll review the basics of this kind of coverage and explore when it’s the right time to shop for a policy so you’re informed throughout the process.
Homeowners Insurance Coverage Basics
Homeowners insurance is a fundamental aspect of protecting your home and personal property from unforeseen events. Explore the basic types of coverage and terminology to help you start the shopping process. These policies typically include elements such as dwelling, personal property, liability, and additional living expenses coverage. Here’s a closer look at how these key components contribute to your policy:
Dwelling Coverage: Dwelling coverage protects the structure of your home from covered perils, such as fire, wind, and hail damage. It typically extends to components of the home, such as the roof, walls, and attached structures like a garage. Make sure your policy covers the total cost of replacing your entire home.
Personal Property Coverage: This component provides coverage for your personal belongings, including electronics, clothing, furniture, clothing, and other items, in the event of damage, theft, or damage. Find out just how much the policy will cover to reimburse the cost of your personal possessions.
Liability Coverage: Homeowners insurance also includes liability coverage, which protects you in the event of legal responsibility for injuries to others or damage to their property. You should understand if or how well you’re protected in the event someone gets injured while on your property and files a lawsuit.
Other Structures Coverage: Other structure coverage, also known as Coverage B in a homeowners insurance policy, provides protection for structures on your property that are not directly attached to your main dwelling. If you have a detached garage, a shed, or some other structure on your property, make sure it’s also included in your policy.
You’ll also want to consider the policy’s deductible. A deductible is the amount of money you need to pay out-of-pocket before your insurance payout kicks in. Lower out-of-pocket payments tend to mean higher premiums, while higher out-of-pocket payments tend to mean lower premiums. Only you can decide which option is right for your needs.
Every home insurance policy has its limitations, especially when it comes to high-value items in your home. High-dollar items such as jewelry, fine art, rare coins, firearms, etc., will typically be covered, but only to a certain dollar amount. If the sub-limits in your policy don’t meet the value of your possessions, it’s recommended to consider adding a “rider” (or “endorsement”) to your policy that can increase the coverage for those items. Keep in mind this will likely increase your monthly premiums as well.
When to Shop for Home Insurance
Home insurance is a critical aspect of safeguarding your property, so it's essential to find a policy that meets your needs and review it regularly. There are several key scenarios and milestones that indicate it may be time to shop for home insurance, including:
Policy Renewal: One of the most common times to shop for home insurance is when your policy is up for renewal. It's an opportunity to review your current coverage, consider whether it’s adequate for your personal property and assets, and compare quotes from different carriers.
Changes in Property: If you’ve made significant changes to your property, such as home renovations, additions, or upgrades, it may be time to review your home insurance policy. These changes can affect the replacement cost of your home and its contents, which may necessitate adjusting your coverage to protect your investment.
Changes in Personal Circumstances: Life changes such as marriage, divorce, or the birth of a child can also impact your home insurance needs. These changes in personal circumstances can influence the type and amount of coverage you require.
Comparison Shopping: Engaging in comparison shopping for home insurance at least every few years, regardless of any specific trigger, is a proactive approach to ensuring that your coverage remains cost-effective and comprehensive. By soliciting quotes from different carriers, you can assess whether there are better options available to meet your current needs. Working with an unbiased brokerage, like SelectQuote, can make this process quick and easy.
How soon should you find home insurance after buying a house?
If you have a mortgage, finding home insurance is a must, since lenders will typically require you to have home insurance to complete the loan. Insurance has to stay current as long as your lender holds the title on your home (i.e., until you pay off your mortgage). You can change providers, but you have to make sure your home insurance coverage is up to date to protect your lender’s investment.
After buying a home, you’ll want to consider how much coverage you need prior to shopping for a policy. The type of coverage and amount needed will play a role in the rates available to you, but you’ll also be asked to provide some basic information, such as:
Name and date(s) of birth of the homebuyer(s)
Address
Coverage start date
Details on the home, such as year built, the total number of finished square feet and any detached structures on the property
Safety features, including deadbolts, sprinklers, fire/smoke alarms, carbon monoxide detectors, security systems, etc.
Insurance history, including most recent property insurance carrier and dates of coverage
If you are looking for additional protection, such as increased coverage on technology or jewelry
Let SelectQuote Help You Find the Best Homeowners Insurance For You
Securing home insurance can seem complicated, but it doesn’t have to be. At SelectQuote, we simplify the process by getting to know your needs and finding you the best homeowners insurance available to you from the trusted insurance companies we work with. In just minutes, we can provide you with multiple home insurance quotes. Let us do the hard work for you.
