Buying your first home is an exciting prospect. Whether you plan on moving in a few years or you’re ready to settle down and start a family, you’ll want to protect your property with homeowners insurance. It will help you replace your belongings and restore your home exactly as it should be if an incident occurs.

Common Questions About Homeowners Insurance

Is homeowners insurance mandatory? 

Most states don’t require you to have it, but if you’re using a mortgage lender, they’ll likely only approve your loan if you have homeowners insurance. 

If you bought your home outright, you’re under no obligation to get it. However, having coverage will allow you to be compensated for stolen items, necessary repairs, and even the rebuilding of your home. 

How does it work?

Homeowners insurance is about providing safety and peace of mind. By paying a monthly or annual fee, your home will be covered if it’s damaged or even destroyed. Once you meet your out-of-pocket deductible, your insurance will take care of the rest, saving you thousands of dollars. Without the coverage, you’d have to pay for the repairs yourself. 

The belongings you list inside of your home will also be covered if they’re damaged, destroyed, or stolen.

The benefits you’re entitled to depend on the details of your policy, the cost of your deductible, and if you chose actual cash value or the replacement value. 

How much do I need?

Policies can be customized to fit your requirements, but there are some coverage areas that you’ll always need. 

Get an estimate for how much your home is worth, so you can insure it for its replacement value—covering you if your home is destroyed and needs to be rebuilt. 

The average policy will cover your belongings at 50% to 70% of your home’s value. However, if you have antiques and expensive items, you can purchase riders to provide the extra coverage you’ll need. 

Liability insurance will protect your property in case someone sustains an injury on it. If you want to increase your liability coverage, consider adding an umbrella policy. 

Can it be canceled?

Your insurance will be canceled if you don’t pay your premium. It may also be revoked if fraud is committed, or you’ve acted recklessly with your property. For instance, if you discover significant damage to your plumbing but don’t get it repaired, it would be grounds for termination. Your insurance agent will help you understand the terms of your coverage. 

 

Homeowners insurance will help protect the dream home you’ve always wanted. When you’re ready, reach out to Absolute Insurance Agency in Foley, AL. With over 30 years of combined experience, their agents will work with you to develop a customized plan that works within your budget while protecting your investment. For more information on their coverage areas, visit their website. To schedule an appointment, call (251) 942-6837.