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Buying homeowners insurance as a first-time buyer

The dream of owning your own home has gone a little sour after the bursting of the bubble and the collapse of resale values. Except there is a lot of very affordable property for sale right now and, if you have the right amount to put down as a deposit, mortgages are available. Buying at the bottom of the market is the right time because the only way the value can go is up. In the midst of all the pressure to find the place you want to live and putting the finance in place, it is easy to forget the need to deal with homeowners insurance. Never forget what looks like a beautiful home may look less attractive when you investigate what cover is available and how much it costs. Here is a simple checklist of issues to go through before you confirm the purchase.

1. Know exactly what cover is available
Location is everything. When a realtor say this, it means the property looks good. But consider the geography and local weather patterns. Are you in an area where there are regular storms and hurricanes? Is this area prone to flooding? Have there been tornadoes? Have there been landslides or do sinkholes regularly open up under foundations? If you are proposing to buy in an at risk area, private insurers may either refuse you cover or send out very high homeowners insurance quotes. Check all aspects of what is and what is not included in the offers of home insurance.

2. Know what the rebuilding costs will be
Remember you are insuring the cost of rebuilding and not the resale value. Houses with special features can be more expensive to insure.

3. Know how much your possessions are worth
If you have individually expensive items, they may have to go on a separate schedule and drive up the home insurance quotes.

4. How much liability cover are you buying?
If someone is injured on your land or by something escaping from your land, there could be a claim against you. How pessimistic are you?

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