How to Buy Homeowners Insurance

Buying a home is often one of the biggest purchases—if not the biggest—that you will make, so it’s essential to make sure that your property and possessions are protected. Homeowners insurance covers your home and its contents in the case of a disaster like a fire or a tornado and even in the event of theft or vandalism.

But every home insurance policy is different, and the cost can vary depending on your location, the size of your home, and a variety of other factors. That’s why it’s important to do your research and choose the policy that best meets your specific needs. 

What does homeowners insurance cover? What doesn’t it cover? How much does it cost? What is the difference between homeowners insurance and a home warranty, and why do you need both? These are all questions we’ll answer so you can close on and move into your home with confidence.

Do I have to buy homeowners insurance?

All homeowners should invest in insurance to protect their property and belongings. Your mortgage lender will most likely require you to buy homeowners insurance before closing if you finance your home. Even though you might not technically need homeowners insurance if you don’t have a mortgage, it can help you save a significant amount of money to replace damaged or destroyed items.

What does homeowners insurance cover?

Think of homeowners insurance as a safety net in case of an emergency event that damages your home or its contents. A home insurance policy covers damages to your home or personal belongings as well as legal and medical costs for anyone outside the family who is injured on your property. 

Standard homeowners insurance coverage includes damage and loss related to:

• Fire or smoke
• Wind
• Lightning
• Explosions
• Hail, trees, or other falling objects
• Vandalism or theft
• Civil unrest
• The weight of snow, ice, freezing rain, or sleet
• Burst pipes or ruptures affecting your HVAC or sprinkler system

What does homeowners insurance not cover?

Most homeowners insurance companies don’t cover damage from flooding or earthquakes in their standard policies. Still, they typically offer additional coverage if you live in areas prone to these natural disasters. You may also want to invest in additional coverage if you own any valuable items, such as antiques, artwork, fine jewelry, or collectibles.

Other types of damage that your policy may not cover include:

• Damage done by pets, insects, rodents, or birds
• Deliberate damage
• Failure due to normal wear and tear
• Pollution damage
• Perils related to acts of war or collapse or overthrow of the government

While repairs to your home systems and appliances due to age and use may not be covered under your home insurance policy, home warranty coverage can help ensure that your budget is protected when covered items in your home break down. The combination of a home warranty from American Home Shield® and homeowners insurance can provide maximum protection for your home and minimize worry. Learn more about our pricing and plans.

How much does homeowners insurance cost?

Homeowners insurances costs depend on the type of policy, your location, and the size and value of your home. Costs are also impacted by the frequency of major weather events in your area. 

Many homeowners insurance companies offer discounts, like: 

• A loyalty discount, if you have been with the company for a certain number of years
• A bundling discount, if you choose to purchase your home insurance and auto insurance from the same company

Even if you plan to go with your auto insurance company, comparing homeowners insurance quotes is a good idea to ensure you’re getting a good deal. 

How do I buy homeowners insurance?

A simple online search will turn up dozens of homeowners insurance companies, but it’s important to choose a company that serves your area, has a good reputation, and has stellar customer reviews. While you can buy homeowners insurance online, you should work with a licensed insurance agent who can help customize a policy to meet your specific needs. 

Make sure to choose a policy that will cover the cost to rebuild your home and replace your property: 

• A replacement-cost policy ensures that you will be able to cover the actual cost of replacing your belongings. 
• A cash-value policy will only pay the current market value of your belongings and tends to be cheaper than a replacement-cost policy.

Compare policies from at least three different companies to make an informed decision. Take the time to read through each policy, so you understand exactly what is covered and what isn’t, and don’t hesitate to ask for any clarification from your insurance agent. The best homeowners insurance is the one that works best for the type of home you have, the region you live in, and your budget.

How can I save money on homeowners insurance?

When you see your first premium statement, you may be in for some sticker shock, but fortunately, there are several ways to help lower the cost of your homeowners insurance. 

The most common way to reduce your costs is to increase your deductible. Just like with health insurance, a higher deductible means lower premiums. Just make sure that you have enough money to pay the deductible if necessary. 

Another way to reduce premium costs is to add security features to your home, such as cameras, burglar alarms, deadbolts, and smoke detectors. You can also keep your premiums low by: 

• Keeping your credit score high
• Installing storm shutters on your windows
• Storm proofing your roof
• Replacing and updating home systems and appliances as necessary
• Maintaining storm gutters
• Removing brush or dead trees that could present a hazard to your home

Of course, home improvements you should make will vary by location. After all, protecting your home against hurricanes won’t help if you live in Kansas. However, adding safety measures that are relevant to your region can end up saving you a bundle when you buy homeowners insurance. 

Final Thoughts

Homeowners insurance protects your most important assets, but if you’ve never purchased a policy before, it can be challenging to understand the nuances of each policy. Take time to research and know what your policy covers, what it doesn’t cover, and what you can do to lower your costs and extend your coverage. If you ever need to file a claim, you’ll be glad you took the time to educate yourself.