As a potential homebuyer you probably have a bunch of questions regarding a home loan. One of the biggest is likely “how many extra expenses come with owning a home?” Homeowners insurance provides coverage for your home in the event of certain losses. So you’re wondering “is it required?” Let’s take a look at all things homeowners insurance.
Homeowners Insurance: What Is It and Do I Need It?
What exactly is homeowners insurance?
Say you are gone on vacation and when you get back you notice that your home has been broken into, and all of your valuables are missing. Homeowners insurance covers the losses and expenses tied to the burglary. Now let’s say you are caught in the middle of a huge hurricane that has destroyed your home. Homeowners insurance covers these losses as well. Trees, shrubs, plants and other landscaping are generally covered for about $500 per item. In essence, home owners insurance can help you replaces belongings and repair your home. Additionally, it can protect you in the event that someone gets injured on your property.
When do I purchase it?
Many lenders require evidence of coverage to provide a home loan. Even if your lender is not requiring homeowners insurance, it’s still a good idea to protect yourself against unexpected events. You never think it’ll happen to you… until it does.
Where can I compare policies?
Your lender will recommend certain policies based on the location of your new home if you have no idea of where to start. If you have a certain insurance company that covers all of your assets, make sure to get a bundled quote from them. An important thing to realize is even if you have a certain agency for all your other assets, a standalone expense may still be lower than your bundled price. So make sure to do your research with a few different companies and then select the company that’s best for you and your family.
Cost cutting tips
If cost is making you stressed out about adding homeowners insurance to your monthly payment, there are ways to cut costs. By maintaining a security and system, you can lower your costs by 5% annually. So if you have a burglar alarm monitored by a central station or tied to a local police station, you can actually save on your insurance. Typically, it’s required to provide a bill or a contract to ensure the discount. So if you’re already considering installing a security system, it can save you in more ways than you might think!
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