Beginner’s Guide to Buying First Time Home Insurance

Individual looking for home insurance online

Introduction

 

If you're just starting out in your career or just getting started on your home ownership journey, there's no rush to buy homeowners insurance. But if you've had an accident or have had any other major loss in the past few years, buying a homeowner insurance premium now may be worth it.

The best time to purchase home insurance is during the off-peak season, when rates are lower. This is because you're less likely to have a claim and your premiums will be lower.

The best time of year to buy home insurance is during the off-peak season, when rates are lower. This is because you're less likely to have a claim and your premiums will be lower.

Homeowners have a greater risk of suffering loss or damage to their property than renters. So if you're buying a home, it's worth considering whether to get insurance.

Types of Homeowners insurance cover

There are three main types of homeowner insurance:

Replacement cost coverage

Replacement cost coverage pays for the cost of replacing your property if it's damaged or destroyed. This type of policy will provide cash for the repairs and generally pay out an agreed amount - based on an assessment of replacement costs - after deducting any deductible you have set up with your insurer.

Actual cash value coverage

Actual cash value (ACV) policies pay out when you sell your house and use that money to buy another property at current market value. The difference between what your ACV policy pays out and what the new house is worth is known as "gain" or "loss". If you sell your house for less than its ACV, then the insurer will pay out the difference as a loss on your policy - this could be as much as 25 per cent in some cases!

Replacement cost coverage is more expensive than ACV because it covers more risks such as fire and water damage; however, if you're happy with how much coverage

The best time to buy home insurance is during the first year of your new home. That's when you've got the most to lose if something goes wrong.

How to Buy Home insurance as a first time buyer

You're also likely to have more coverage that you need at that time, so it's easier to get a good deal on your policy.

That said, if your new home has been built within the last three years, you should still consider getting coverage as soon as possible. The longer you wait, the more likely it is that you'll end up paying for it later — or even worse, being sued by an insurance company for not having coverage at all!

Though home insurance is a necessary part of your financial plan, it can be a difficult purchase to navigate.

First, you have to decide how much coverage you need. Then you'll need to compare prices and find the best deal. You should also consider whether a homeowner's policy or a dwelling owners policy is right for you. If you own multiple properties, you may want to consider a renters insurance policy instead.

If you're looking to take out new policies, you should start as soon as possible. Waiting until the last minute means that you might not get the best deal possible, which could result in higher premiums down the road. You can check out quotes on our website to find affordable home insurance policy covers online. 


By Author: Kate Smith | 21 Jun 2022
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