5 Insurance Policies First Time Homebuyers Should Consider

Dated: 08/25/2017

Views: 143

Before I went into real estate I was an insurance claim adjuster for over 12 years and then got my agent’s license and figured out after a year that this was something I didn’t want to do long-term.

At any rate, the first of our 5 recommended insurance policies are:

1. Homeowner’s Insurance

Compulsory for homeowners with mortgages, homeowner’s insurance can be separated into five key areas that owners are protected against damage to the home, personal property, liability, medical payments and loss of use.

Dwelling coverage: Pays for damage to your home and unattached structures, such as sheds, fences, and garages up to the limit you specify.

Personal property: Repairs or replaces the contents inside your home, such as furniture, appliances, and clothing, should they be damaged or stolen.

Liability protection: Protects you should someone injure themselves on your property and then file a claim against you.

Medical payments: Covers the medical bills associated with an injury that occurred on your property, such as co-payments, visits to the Emergency room, prescriptions, etc.

Loss of use: Pays for living expenses should your home be too damaged to occupy while repairs are being made after you have filed a claim.

2. Flood Insurance

Flood insurance fills in the gaps not covered by homeowner’s insurance. It covers flood damage caused by hurricanes, torrential downpours, and other natural events.

Many homeowners believe they don’t need flood insurance because they don’t live in a high-risk area. This is not true; floods top the list as the no. 1 natural disaster in the United States with20 percent of claims coming from moderate to low-risk areas.

Owners can choose to purchase an NFIP policy that protects your home and personal property or one over the other. The former protects your home up to $250,000 in damages while the latter covers personal property up to $100,000 in damages.

You never know when a flood may strike so it’s important to protect your assets before something happens.  It used to be that the federal government was the only source of flood insurance but now there is a list of private insurance companies who write it as well.

3. Umbrella Coverage

Provides additional liability coverage above the limits set by your homeowner’s insurance policy. Should the homeowner limit get exhausted, umbrella will kick in.

It provides coverage for bodily injury, property damage, slander, libel, malicious prosecution and other personal liability situations.

4. Earthquake Insurance

An optional coverage that protects your home in the event of an earthquake. Western states are more prone to earthquakes, but eastern states have a relatively lower risk.  The exception is the New Madrid fault zone which covers western Kentucky and Tennessee as well as smaller parts of Missouri, Arkansas, Illinois, Indiana, and Ohio.

5. Valuable Items Plus

Provides higher limits for more valuable items that exceed the limits set by your standard homeowner’s policy. These items could be engagement rings, cameras, computers or expensive antiques.

Valuable items coverage provides you extra peace of mind should they be stolen or damaged.

Buying a home is a huge deal. It’s not only a sanctuary to raise a family in, but it’s also an investment in one’s future.

Blog author image

Greg Raymer

I am a Broker with over 15 years experience. We offer our buyers an exclusive VIP Buyer Program where, among other things, you get a free 1-year home warranty that is worth up to $500 along with our B....

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