A First-Time Homebuyers Guide to Insurance

When you are buying your first home, there are a million things going through your mind. Your real esate agent is guiding you through the process and helping you pull together the paperwork, your lender is asking you for a lot of documentation of your current financial situation, you are setting up an inspection—and that’s all in the first week! Another important aspect of the home buying process is selecting your homeowners insurance. But how are you supposed to know what you need when you’ve never had to purchase homeowners insurance before?

It’s important to start looking for an insurance provider early on and to keep a level head throughout the entire process. Some say you should get a few quotes before you even put in an offer, so you can see the true cost of owning the home. Here are a few other key tips for selecting your first homeowners insurance policy.

• Find an insurance agent. An insurance agent is a great resource as you are looking into homeowners insurance. He or she can be a sounding board for any of your questions and offer you advice on what type of coverage you will need and how much. Also, if you select an independent agent, an insurance agent who represents multiple insurance companies, you will get quotes from multiple companies and can choose the one that works best for you.
• Know your replacement cost. The replacement cost is the full amount it would cost to replace your home and possessions if anything were to happen. This can be confusing for new homeowners because even though you are paying $140,000 for your new home, you will likely need a higher amount for your replacement cost. According to Marshall & Swift/Boeckh, 60 percent of homes in the U.S. are undervalued for insurance purposes, by an average of 17 percent. This leaves many people without the ability to truly replace their home if disaster strikes.
• Perform a risk assessment. As you walk through and around the house, try to think about things that could go wrong. For instance, does the yard not drain well, or is there chipped paint or damp carpet in the basement? Either could be a sign of flooding or water backup issues, and you may want to add a water endorsement to your policy.
• Bundle your policies for savings. It is always a good idea to see if you could save money by packaging your car insurance policy with your homeowners policy. Most insurance companies offer discounts for bundling insurance. At Acuity, you could save up to 20 percent by going this route. Get two quotes from each company—one that has the house by itself and one that has your auto and home bundled.

Buying a home can be stressful, but selecting your homeowners insurance doesn’t need to be. That is where Acuity and our great network of independent insurance agents come in. You can get a homeowners insurance quote online and then reach out to your Acuity independent agent who will answer any questions you may have.