Tips to Purchase Insurance for First-Time Home Buyers

If you have never bought a house before, you will have a lot of questions about homeowners’ insurance. There are several tips for first-time homeowners looking for a quality insurance policy to protect their investment. While some are mainly common sense, other questions may have to do with widespread myths and rumors about what a homeowners’ policy covers. Here are some useful tips for first-time homeowners.

Cheaper Isn’t Always Better

When it comes to protecting your home, don’t settle for the first policy you look at, especially if it is cheaper. Cheaper isn’t always better when it comes to protecting your home or cars. In many cases, a cheaper policy will leave you covering most of the bill if disaster strikes. Make comparisons while shopping for the policy. Find out what you are getting for your money. A little research may show you that spending a little extra will offer you many additional benefits.

Know What Type of Coverage You Need

Contrary to what many people believe, flood insurance isn’t included in a basic homeowners’ policy. Many first time home buyers mistakenly think that their policy covers water damage caused by floods or hurricanes. This isn’t true. Flood and hurricane insurance are two different policies and must be purchased separately. If you are unsure if your new home is in a flood plain or that you are at risk for loss from a hurricane or another calamity, ask your insurance agent. They will be able to give you the information you need to make an informed choice.

Current Market Value and Replacement Cost

Homeowners’ insurance policies are written to cover your home’s current market value, not the cost of replacing it. If you have a mortgage on your home, the payout must be greater than the loan amount. In many cases, first time home buyers assume that the insurance policy they purchase for their home will cover the cost of rebuilding it. While this isn’t necessarily true, policy amounts can be adjusted to meet the homeowners’ needs.

Find an Insurance Agent You Trust

Insurance is a complex subject. It can be misunderstood, leading first-time home buyers confused and frustrated. Instead of feeling alone and abandoned, find an agent you can trust. There is no such thing as a dumb question, especially when it concerns protecting your home and property. The right agent will give you the information you need and guide you through the insurance process. They can offer tips for first-time homeowners who may not have a good idea about buying insurance.

Assuming Your Deductible Is a Flat Amount

Most homeowner’s insurance policies have a deductible, the amount you must pay yourself before coverage kicks in. Choose a higher deductible amount to save money on your premium. However, for a severe weather catastrophe like a hurricane, the deductible could alter from a flat amount to a percentage of your coverage. This percentage can go up to 10-15 percent. Therefore, if you have $200,000 in coverage, your deductible could spike from say $1,000 or to $30,000. Discuss with your insurance agent thoroughly about deductibles.

If you are a new homeowner, don’t fall into the typical first-time homebuyer insurance traps. Call the agents of Pierce Insurance Group today. We have established a solid reputation for being the best at what we do. Our agents can answer your questions and will work hard to build your trust. When you are ready to seal the deal on your new home, contact an agent from Pierce Insurance Group.