Home insurance provides much peace of mind for people looking to buy a property. Technically, it’ not legally required to own a home, but if you’re not buying your home with cash on hand, most money lenders like banks will require a borrower to have home insurance before they approve a mortgage application.
If you’re a first time home buyer, this means you’ve got to study up on insurance and what kind of protection you can expect. Here is a quick primer on the three basics you’ll want to consider for coverage of your property.
The first and most obvious is the home itself. This is the reason people get home insurance in the first place, to provide financial coverage if an incident should happen that damages the home significantly. It’s always why banks and other money lenders want you to have home insurance in the first place.
If your home is damaged and you can’t repair it before paying off a mortgage, then you’ve just hurt the money lenders as well. In the event of a repossession, for example, they’re now getting back a damaged home worth less than the money they loaned you. The coverage for the dwelling normally covers the usual threats, like fire, though additional coverage can be sought for you things like flood damage if you live in a state with a higher risk of flooding.
This may or may not apply to you, but if it does, you’ll want to be clear about how your insurance policy works. Additional structures on the property include any buildings or additional construction that is on your property that is not a part of the residential dwelling.
This can include detached garages that are built on the property, in-law cottages/suites you have built, or even private sheds/workshops for doing work. Fences can also fall in this category, so it’s something you want to keep an eye on if you don’t want to pay out of pocket for storm damage or fire to a garage, for example. Keep in mind; however, you’ll need a different type of insurance if you’re using these structures for commercial activities.
Finally, there are the key items many people forget about, the belongings within a home. If something drastic happens to a home, such as a storm or a fire, it’s not just the structure of the home that can be a significant expense. Many homes now have expensive consumer electronics like televisions, home theater systems, and of course, appliances like stoves, refrigerators, and computers that may have important work and other documents stored on them.
Home insurance coverage may not be able to replace the emotional value of family heirlooms, but it can help with the financial recovery of trying to replace belongings.
If you’re looking into your own insurance for your new home, let us help. Contact Panorama Insurance Agency Inc, and we can guide you through the process of finding out which insurance policies give you the protection and peace of mind you need.