First Home Insurance - What First Time Homeowners Need to Know

For the first time homeowner one of the most important things they need is that first home insurance policy. This is without a doubt the most expensive purchase for most people and protecting that asset from natural disasters and other unforeseen hazards is an important piece of mind.

For those who think that homeowners insurance is not needed the coverage you get can be had at a very reasonable rate. In fact if you are obtaining a mortgage you will be required to have some form of home insurance if you wish to close as it is a requirement of all lenders.

Most home insurance policies are the same and offer standard coverage for the following things.

1. Covers losses caused by damage to the structure of your home - Any damage to the structure of your home caused by lightning, fire, hailstorm, snow storm, break ins, vandalism, as well as plumbing leaks or faulty electrical problems is covered. One thing new homeowners need to know is that flood, earthquake, and in some cases wind damage are not covered by standard homeowners insurance. This type of coverage has to be purchased separately.

2. Covers the loss or damage to the contents of the home - Home insurance will help cover the cost of paying for any items within the home that are damaged. Furniture, appliances, electronics, clothes, and the like are normally covered up to 50% to 75% of the homes structural coverage.

3. Covers temporary living expenses - If your home is ever damaged or destroyed homeowners insurance would cover the cost of your temporary housing.

4. Covers personal liability - If anyone has an accident or gets hurt on your property you insurance will pay for their medical bills. If they decide to sue you for damages your legal and any judgment/settlement will be covered.

Throughout the insurance industry there are eight home insurance policy types. These include HO-1, HO-2, HO-3, HO-4, HO-5, HO-6, and HO-8. HO-3 is the one most opted for. It offer comprehensive coverage and is closely followed by HO-4. HO-5, HO-6, are for condominium owners and HO-8 is for older homes. HO-1, HO-2 offers limited coverage.

Getting quotes and purchasing your first home insurance policy is not difficult if you understand how homeowners insurance works. For the first time home buyer doing a little research beforehand can help streamline the whole process.