There are many considerations to be made when shopping for a new home. Selecting the best neighborhood, property taxes, figuring out the number of bedrooms you need, and more. But, while it’s natural to get caught up in the excitement of buying a new home, make sure to not forget about homeowners insurance. Home insurance is what protects you financially in case your home or possessions are damaged. Here’s a quick guide to home insurance. 

Mortgage Lenders Require Home Insurance

Banks or financial institutions will require home buyers who apply for a mortgage loan to have homeowners insurance, as they must protect their own investment. That said, even if you are not getting a home loan, it’s a good idea to have an active homeowners insurance plan at all times. 

What Does Home Insurance Cover?

Homeowners insurance covers the structure of your home and your belongings in case of a fire, lightning, tornado, explosion, vandalism, and theft. The coverage offered by homeowners insurance is as follows:

Dwelling: Pays to help rebuild the structure of your home.

Personal belongings: Pays to help replace or restore your personal belongings.

Liability insurance: Helps pay for medical expenses and property damage that you or the members of your household cause to others.

Medical payments (to others): Pays for minor injuries if a third-party gets hurt on your property. 

Additional living expenses coverage: This helps pay for expenses like hotel bills, meals, and more if you can’t live in your home because of a loss covered by your policy.

Things to Consider when Comparing Home Insurance Companies

When comparing homeowners insurance companies, here are a few things you should consider:

Customer service rating: Customer satisfaction can be a good indicator of how a company responds to a situation. The homeowners insurance company you choose should score high for claims satisfaction.

Financial stability: Check out a company’s financial strength before making a decision. A number of insurers post their financial strength ratings on their websites.

How to Get the Right Amount of Coverage

Your insurance company will evaluate the various characteristics of your home and recommend an appropriate amount of coverage. Make sure that the coverage amount will be sufficient to rebuild your home at any time, in case disaster strikes. Also, the policy should cover all your belongings.