How can you protect your most valuable investment, your home, as a first-time homebuyer? This can be accomplished by obtaining home insurance for first time buyers. Home insurance is a type of property insurance that you can purchase to protect your home and possessions.
The task of selecting the right homeowner’s insurance policy is worthwhile, with dozens of insurers to choose from and several factors to consider depending on where you live.
Home buyers’ insurance policies typically cover any destruction and damage to a home’s interior or exterior, as well as the loss or theft of personal belongings and personal liability for any harm caused to others.
In this article, we will walk you through the steps of getting your first home insurance.
What Is Homeowners Insurance?
Homeowners insurance is a type of property insurance that covers losses and damages to a person’s home, as well as furniture and other assets in the home. Homeowners’ insurance also includes liability coverage for accidents that occur in the home or on the property.
Home Insurance for first time buyers consists of coverages that may assist in the repair or renovation of your home and belongings if they are damaged by certain perils such as fire or theft. It may also assist in covering costs if you inadvertently damage another person’s property or if a visitor is injured at your home.
Do I Need Home Insurance for First Time Buyers?
Before we get into the finer details of all your home insurance questions, let us first say that we strongly recommend that you have home insurance as a first-time buyer, simply for the value, it provides — even though home insurance isn’t required by law in the same way that car insurance is. Keep in mind that if you’re looking to buy a home or if you’re a homeowner who has applied for a mortgage, your lender will almost certainly require you to get home insurance first.
If something happens to or in your home, having home insurance can protect you from having to pay a large lump sum to repair damages to your property and personal belongings. So, while home insurance isn’t always required, it does play an important role in protecting what could be your most valuable asset.
How to Get the Most Affordable Home Insurance for First Time Buyers
These are the best steps for first time home buyers to take in order to obtain home insurance without breaking the bank:
- Buy your Homeowners Insurance early
- Determine the Right Amount of Coverage for Your Home
- Weigh How Much You’re Willing to Pay Out of Pocket
- Consider Bundling Your Home and Auto Insurance
- Compare quotes
- Look for discounts
Buy your Homeowners Insurance early
Begin looking for insurance and obtaining at least three to five quotes as soon as you sign the contract and have an address to provide to insurance providers. Compare prices and coverages, as well as company reviews, to ensure that you’re getting the best coverage at the best price. When you’re shopping, make sure you’re comparing policies from the same insurers.
Determine the Right Amount of Home Insurance for First Time Buyers
When getting home insurance for first time buyers is critical to insure the home at replacement cost rather than market value. To determine the appropriate amount of coverage for your home, you must first determine how much it would cost to repair the property.
The best course of action is to contact your insurance company, which can accurately assess the property and its coverage requirements. Once the insurer has determined the cost of replacing your home, inquire as to how it arrived at that figure. Every insurer has a different estimate formula, and you’ll want to make sure yours is correct.
Weigh How Much You’re Willing to Pay Out of Pocket
Inquire with your insurer whether the policy’s deductible is a fixed amount or a percentage of the coverage amount. A deductible is the amount of money you must pay before the insurance company will pay your claim. You can reduce your monthly premiums by raising your deductible, but make sure you can afford it or have it in an emergency fund in case there is a claim.
Consider Bundling Your Home and Auto Insurance
Depending on the insurance company, bundling a home and auto policy can save you anywhere from 10% to 25%. Homeowners should compare individual versus bundled policies when shopping for home insurance to see which is more cost-effective. Other home insurance discounts, such as having a security system or certain smart home upgrades, can help you save money.
Compare quotes
Obtaining quotes from multiple companies can assist you in locating a more competitive rate for your home insurance. Each company has its own set of rates, and prices can vary greatly.
Look for discounts
Most companies provide discounts that can assist you in lowering your premium. When you purchase your auto insurance from the same company that you purchase your home insurance, you may be eligible for a multi-policy discount, which could save you money on both policies. Savings for new roofs, hail- or wind-resistant roofs, paperless policies, and security systems are also common homeowners insurance for first-time buyers discounts.
What to Look for in home insurance for first time buyer
- Check the limits on your personal property and liability coverage
- Be aware of exclusions
- Understand your deductibles
What does home insurance for first time buyers cover?
Home insurance typically covers the followings:
- Coverage for the structure of your home
- Coverage for your personal belongings
- Liability protection
- Additional living expenses
Coverage for the structure of your home
If your home is damaged or destroyed by fire, hurricane, hail, lightning, or other disasters listed in your policy, your home insurance for first time buyers policy will pay to repair or rebuild it. Most policies also cover detached structures like a garage, tool shed, or gazebo for about 10% of the amount of insurance you have on the house’s structure.
A standard policy will not cover damage from a flood, earthquake, or normal wear and tear. Remember this simple rule when purchasing coverage for your home’s structure.
Coverage for your personal belongings
Your furniture, clothes, sports equipment, and other personal belongings are protected if they are stolen or destroyed by fire, hurricane, or another insured disaster. The coverage is typically 50 to 70 per cent of the insurance you have on the house’s structure.
A home inventory is the best way to determine if this is adequate coverage. Personal belongings coverage extends to items stored off-site, which means you are protected anywhere in the world. Some companies cap the amount at 10% of the amount of insurance you have on your belongings.
Liability protection
Home Insurance for first time buyers can protect you from lawsuits for bodily harm or property damage caused by you or family members to others. It also compensates you for any damage caused by your pets. So, if your child (or even your dog) inadvertently destroys a neighbour’s expensive rug, you’re covered. The liability portion of your policy covers both the cost of defending you in court as well as any court awards, up to the limit specified in your policy documents.
Additional living expenses
Home insurance for first time buyers covers the extra costs of living away from home if you are unable to live there due to damage caused by an insured disaster. It pays for hotel bills, restaurant meals, and other out-of-pocket expenses incurred while your home is being rebuilt.
Keep in mind that your homeowners’ policy’s additional living expenses coverage has limits, and some policies have a time limit. These limits, however, are distinct from the amount available to rebuild or repair your home.
Home Insurance for First Time Buyers cost
The average premium paid in the UK for home buildings and contents insurance is £307 (according to the most recent data available), but you could pay more or less in the market today, depending on the rebuild cost of your home, the excess, your no claims bonus, the features you want in a policy, and even your claims history.
For example, according to our research, the average cheap home insurance quote for a typical British home with a £200,000 replacement cost is £294 per year—this reflects the 5 cheapest quotes available, which include £50,000 of contents cover as well as accidental damage, legal, and home emergency cover.
Here are a few factors that will influence how much you pay for first-time home buyer insurance:
- Location
- Home value
- Deductible
- Claims history
- Coverage types
- Personal information
FAQs about Home Insurance for First Time Buyers
What is home Insurance for first time buyers?
Homeowners insurance is a type of property insurance that covers losses and damages to a person’s home, as well as furniture and other assets in the home.
What are first-time homeowner insurance tips?
- Check the limits on your personal property and liability coverage
- Be aware of exclusions
- Understand your deductibles
Is getting home insurance worth the cost?
Yes, home insurance pays for the cost of rebuilding your home in the case of eventuality.
