Purchasing your first home is an exciting life milestone, but it can also be overwhelming. There are many details to consider as you go through the buying process, with one of the most important being homeowners insurance. You will need adequate coverage to safeguard your investment in the event of an unexpected disaster. However, these policies are often challenging to understand, making it difficult to know which options are most suitable for your situation.

How to Successfully Buy Homeowners Insurance for the First Time

1. Don’t Shop Based on Price 

To cut costs, one of the biggest mistakes new homeowners make is only getting enough insurance to cover the amount of their mortgage. This could leave you drastically underinsured and unable to repair or replace your home and possessions should you experience a significant loss. You may also end up with a poorly rated provider who doesn’t have the financial stability to pay your claims. 

2. Learn the Difference Between Replacement Cost & Actual Cash Value 

You will have the option to insure your home for its actual cash value or its replacement cost. If a total loss occurs, an actual cash value policy will cover what your property is worth minus depreciation. In contrast, a replacement cost policy will pay out whatever amount you would be charged to rebuild your home with items and materials of equivalent quality according to today’s market prices. 

3. Know What’s Covered

Before buying homeowners insurance, it’s vital to go over exactly what events the policy will and won’t cover. The last thing you want is to be unpleasantly surprised by a claim rejection for a loss you didn’t realize was excluded from your coverage. Standard policies will pay out on damages associated with perils such as fire, wind, hail, vandalism, and theft, but typically, endorsements must be purchased for floods, earthquakes, and higher valued assets. 

4. Take Advantage of Discounts 

Most insurance providers offer policyholders a variety of ways to save on coverage. For example, bundling more than one policy with the same insurer, installing security features, raising your deductible, and keeping a smoke-free home can all help you reduce your premiums. Ask your agent what discounts you’re eligible to receive.

Homeowners insurance will help you start this new chapter of your life with peace of mind and financial security. For professional assistance customizing a plan that meets your unique needs, contact Shelter Insurance® - Michael Flynn. Based in St. Peters, MO, he has earned a solid reputation across St. Charles and St. Louis counties for providing clients with reliable and affordable coverage. He will take the time to explore all your options and make sure you’re clear on the ins and outs of your policy. To request a quote, call (636) 441-8177 or visit him online to learn about the different types of homeowners insurance products he offers.