Having home insurance is important if you’re a homeowner, and in most cases, it’s required. You need it when unexpected issues arise, and if you don’t have it, you could be looking at stiff financial ramifications. While it can be frustrating to add another monthly payment obligation to the long list of bills you have, home insurance is one of those you can’t skip out on without serious consequences. If you’re a first-time homebuyer, you may not be aware of the proper time to get homeowners insurance. Learn about when you should get home insurance as well as options you may need to add, like flood insurance, liability coverage, and more.
Purchase a policy before you close on a home.
If you’re in the process of buying a home, then you likely have a long list of tasks before you. Make sure you add an insurance policy to that list. That way, you have the policy in place and your home is protected from day one. Research various home insurance companies and look into each policy to ensure that it complies with the requirements set forth by your mortgage lender. Doing a home insurance compare can save you from buying a policy that is insufficient or costs you more money in the long run.
Remember, many lenders won’t release funds unless you show proof that you do have insurance already. That’s why it is vital to do your homework on the type of coverage you will need. For example, if you live in a state like Florida where hurricanes can strike, you may want to add flood insurance to your policy. You will also need earthquake coverage if you live in a place prone to earthquakes, like a fault line. These types are not covered in a typical insurance policy and require additional coverage. Some flood insurance policies also offer you protection in the event of a wildfire or other natural disasters.
In some cases, you may be able to bundle your car insurance and homeowners insurance together, which could save you money. A local insurance broker may be able to help you with finding those opportunities. Often, your insurance payment is lumped in with your mortgage payment and your lender pays out the insurance for you.
Do not let your coverage lapse at any point.
It is easy to let a bill slip here or there, especially during times like the COVID-19 pandemic when we are all feeling financial strains. However, you should make sure to always stay current on your insurance payments, as a lapse in coverage could prove disastrous for you. Any lapse in insurance coverage could mean that you won’t be covered if an unexpected disaster hits or if your home catches on fire. The replacement cost for the damage from that would far outweigh the monthly payments. Your lender will likely also require you to keep everything current so that their investment is protected.
Additionally, your home insurance will provide some level of liability coverage. This means if someone is on your property and they slip and fall and then try to sue you, your insurance should protect you from having any financial obligation provided that you have done everything needed to reasonably maintain your property. The personal property coverage is there to protect your home and the items in it in the event of a disaster, burglary, or other events. You cannot predict when these will happen, so you should make sure to continue your monthly payment.
If your coverage does lapse, then you need to reach out to your insurance providers immediately to see what can be done and if they are willing to extend your policy for you.