Buying your first home is one of the most exciting experiences of your adult life. Whether your purchase is meant to fit your expanding family, or to add to your investment portfolio early on, insuring your new property should be among your top priorities both before and after you sign on the dotted line! If you are in the process of searching for your new home and are wondering how to set up a policy with as little hassle as possible, below are a few pieces of key information, as well as important tips to keep in mind!
Why Do I Need Home Insurance?
Even if your property is brand new and covered by a thorough warranty, an insurance policy is there to cover you when manufacturer guarantees won’t. The unfortunate reality is that accidents do happen, and there is nothing worse than watching your investment perish, along with your precious belongings and memories. The peace of mind provided by a detailed policy is invaluable, especially in the event that you do need to use it. Simply put, even though it might increase your monthly spend, knowing that your home is safe is well worth the cost.
While each individual policy will look slightly different due to personal preference, building specifics, contents, etc., there are a few key areas that are typically covered. These include:
Your policy should cover the main structure of the home, including detached features such as a garage, pergola, shed, in-ground pool and more. Building coverage can also extend to the cost of rebuilding your home in the event of a total loss, typically addressed by either guaranteed replacement value or actual cash value (ACV).
Tip: Know the difference between full replacement value and ACV to ensure you have the coverage you want.
Guaranteed replacement value means the cost of rebuilding your home will be covered from the ground up, with no depreciation factored in. Even if the damage to your home is greater than your replacement value limit, your insurer will fully replace your property and possessions.
Actual Cash Value factors in natural depreciation when calculating a home insurance claim payout. This means that your payment can vary greatly depending on the current market value of fixtures and items versus the value of the same items when you originally purchased.
Personal property refers to “moveable” items within the home, with a few exceptions for certain types of high cost valuables (more on this below). Personal property can include items like appliances, clothing, electronics, furniture, general household goods and more.
As mentioned above, certain items, particularly those of high value (usually above $10,000) may require specific endorsements for protecting their unique value. This includes, but is not limited to: jewelry collections, original artworks, artifacts, furs, etc.
Additional Living Expenses
In the event that your home becomes temporarily inhabitable due to damage or sudden need to evacuate due to an unforeseen hazard, additional living expenses will help cover the cost of relocating to a hotel or other eligible living accommodation.
What Kind of Questions Should I Be Prepared to Answer?
Many first-time homeowners tend to associate the process of obtaining an insurance quote with unnecessary headaches and confusion. Fortunately, with Ravenhill, you never have to worry about feeling stressed. Our agents are experts when it comes to finding you the best coverage, and can even make life easier by bundling your home and auto policies to lower your rates! You can expedite the process by making sure you know the answers to a few of the questions below:
- Is this your primary residence or will it be used as a vacation property?
- Is the construction of your home complete? If not, will it be unoccupied during renovations?
- Is there a rental suite in the home? *
- Do you plan on participating in a home sharing program like Airbnb or are you keeping the property purely for personal use? *
*Homes featuring rental suites or areas designated for use in a home-sharing program must be disclosed as different types of coverages are needed. Failure to share this with your agent may result in your property being insufficiently insured and a claim may be denied.
Ravenhill is your first choice for home insurance, whether you’re a first-time home buyer or are an experienced owner. Our team treats our clients likely family, and takes pride in providing the best solutions for each customer, offering discounts for those who bundle policies, meet certain age requirements, have a long history of previously being insured, and more! Request a quote or learn more by contacting us today!