When Should I Buy Homeowners Insurance for My New House?

When Should I Buy Homeowners Insurance for My New House?

There is a lot to do when you decide to buy a home. One of the first things to check off the list after all of the papers are signed, is to make sure you have quality homeowners insurance in place before you move in. The former owners will keep their policy in place until they pass the keys on to you. This is normally a requirement for the lending institution while they still have a lien on the property. Your obligation to provide coverage will begin as soon as theirs ends.

Do I Need Homeowners Insurance?

If you are purchasing a home, it’s important to consider the investment you are making. A home is a valuable asset. Buying a home without purchasing a quality homeowners insurance policy, is like using it as collateral to make a bet. Without insurance, even a small accident can put you at risk of losing your home and your investment all at the same time. Having a homeowners policy in place gives you the protection you need to feel financially secure.

Protect Yourself and Your Lender

When you buy a home using a lender, one of the mortgage requirements is that you will have to carry enough homeowners insurance to cover the loan if the home is damaged or destroyed. If you fail to maintain the appropriate amount of coverage, your lending institution will purchase a policy to protect its interest and charge you the cost of the coverage. If this happens, it’s important to remember that the policy they purchase will normally not cover any of your possessions but only the structures and general liability.

Benefits of Homeowners Insurance

There are several benefits of having homeowners insurance. The financial benefits are what people often consider first. Other benefits include helping you maintain a positive credit rating and lowering your property taxes in most states. This will also give you peace of mind knowing that your home will be repaired or replaced, if you ever experience a devastating event that damages or destroys your home.

Hazard Insurance Vs. Homeowners Insurance

Hazard insurance is the type of coverage that protects the structures on your property. On the other hand, homeowners insurance includes all other types of coverage, including general liability and the coverage that protects your personal possessions. Your hazard insurance is simply one of the parts that make up a homeowners policy.

How Long Does It Take to Get Coverage?

In most cases, it will only take a few hours to get sufficient coverage to protect your new home. Unless there is a problem with the title and transfer of the home, you should be able to apply for a policy, pay the first premium, and set the date on which you want the policy to go into effect. This process can sometimes be completed over the phone in a matter of minutes. It will all depend on how far you are into the loan process and how soon the closing date is.

Do I Need Coverage After My Mortgage Is Paid Off?

Even though you have paid off your lender and are no longer obligated to carry homeowners insurance, maintaining your policy is in your best interest. Keeping your policy will provide you with the resources you need to repair or replace your home if a devastating event occurs. The liability coverage you have in place is always beneficial, in case an accident occurs.

Buying a new home and the homeowners insurance you need to protect it is a big step. There is a lot to think about when looking for an insurance policy that will protect one of your biggest investments. Call our agents at 01 Insurance today to find out more. We will gather the information you need and ensure your home is properly covered from day one.