Choosing Excellent Insurance Coverage

Things To Consider When Buying Homeowner's Insurance

As you finalize the details of buying your first home, one of the things that you should never underestimate is the importance of your homeowner's insurance. When it comes to buying a homeowner's insurance policy, there are many things to consider to ensure that you're getting the coverage that you need. Here's a look at some of the things that you need to discuss with your insurance agent.

Market Value or Replacement Cost

One of the first things that you need to understand is the difference between replacement cost and market value. Don't expect your homeowner's insurance coverage to equal what you paid for the home, because that's the market value. Your homeowner's insurance policy will cover your home for the replacement cost, not the market value. 

Replacement cost refers to the cost of actually rebuilding the house the way that it was. This is a different figure than the market value for the same reason that the cost of manufacturing a product is different from the price that it sells for. Talk with your agent to understand how they arrive at the replacement cost to be sure that you're comfortable with the calculations.

Outbuildings and Other Features

You also need to ensure that your policy includes coverage for any outbuildings, fixtures, features, and other elements on the property. Swimming pools, fountains, sheds, and other similar structures should be accounted for in your homeowner's insurance because they are part of your home and your property. Talk with your agent about the best way to ensure that those elements are covered.

Excluded Risks

When you buy homeowner's insurance for the first time, it's easy to face misconceptions about the coverage. Take the time to discuss your coverage with the insurance agent to clarify what types of losses are included and which hazards are not. For example, you may need to secure additional coverage for flood insurance to cover specific types of water damage. An additional rider may be necessary for excess liability if you have a swimming pool or a dog. The more information you can get upfront, the better you will understand your policy and its limitations.

These are some of the most important things to think about when you're buying your first homeowner's insurance policy. Talk with an insurance agent near you today for more details about your coverage options. That way, you're sure to get the policy that you need for your new home.

Contact a local homeowner's insurance provider to learn more.