Home Insurance First Time Buyers 2024
From choosing a mortgage lender to picking a real estate agent, there’s a lot to consider when purchasing your first home. One of the final steps in the home-buying process is purchasing an insurance policy, and your mortgage lender usually requires it.
But finding the right policy and provider can do more than check a box: It can provide valuable peace of mind that your property will be repaired, rebuilt or replaced after a destructive event, such as a fire or storm. We at the Guides Home Team have analyzed the best homeowners insurance companies on factors important to homeowners looking to purchase a policy, such as overall coverage, brand reputation and customer service.
Keep reading to learn more about our top picks for the best home insurance for first-time home buyers.
What To Look For in a Home Insurance Company
When looking for a home insurance company, it is important to analyze each provider’s coverage details, cost and overall reputation. We explain each consideration below to help you find an ideal policy.
- Coverage: To ensure adequate reimbursement in the event of a claim, your policy’s coverage limits should meet your needs. Ensure your dwelling coverage is enough to rebuild your home at current market rates in the event of a catastrophe. Similarly, assess the value of your possessions to determine how much personal property insurance you need. Try to avoid under- or over-insuring.
- Cost: Review your financial situation and choose a policy based on your budget. Affordability is important so you can continue to make on-time payments — if you do not make timely payments, your insurance coverage will lapse. Compare rates from different providers to ensure you get the best deal. We also recommend figuring out the average cost of home insurance based on your location so you know what to expect when looking for a policy.
- Reputation: A company’s reputation can help you understand important information about its financial stability, overall customer service and claims-handling experience. You can assess an insurer’s claims handling and customer satisfaction through sources like J.D. Power and Associates, and look at AM Best ratings to learn about a company’s financial stability. For customer reviews, you can look at the Better Business Bureau (BBB) or Trustpilot.
How Much Home Insurance Coverage Do I Need?
You can use the table below to better understand how much home insurance coverage you will need based on recommendations from the National Association of Insurance Commissioners (NAIC). To determine your dwelling coverage limit, calculate how much it would cost to rebuild your home based on the average building cost per square foot in your area. Also, factor in any planned home upgrades or improvements, which can increase your rebuilding cost.
What Type of Damages Does Home Insurance Cover?
Your home insurance company usually pays for damages to your home and personal property caused by unpredictable events. Homeowners insurance also includes liability protection in the event someone is hurt on your property. Below, we explain what homeowners insurance covers and common exclusions to help you understand your policy.
How Does Filing a Claim Work?
The exact claims process may vary depending on your provider, but generally, you should first assess and document the damages to your home, creating a list of affected items. If necessary, file a police report. Once you have reviewed the totality of the damage, contact your insurance provider to file a claim.
The insurance company will assign a claims adjuster to inspect the damage. You will receive a payout based on your coverage limits and deductible when the insurer approves your claim. Then, you can start damage repair or replacement. Your insurance provider may also provide coverage for additional living expenses if you must relocate during repairs or renovations.