Buying your first home is exciting, but it comes with responsibilities—including protecting your investment with homeowners insurance. Here’s what you need to know.
What Does Homeowners Insurance Cover?
A standard homeowners policy includes several types of coverage:
Dwelling Coverage
Pays to repair or rebuild your home if damaged by covered perils like fire, wind, or hail.
Personal Property Coverage
Covers your belongings—furniture, electronics, clothing—if stolen or damaged.
Liability Coverage
Protects you if someone is injured on your property and sues you.
Additional Living Expenses
Pays for temporary housing if your home is uninhabitable due to a covered loss.
What’s NOT Covered?
Standard policies typically exclude:
Flood damage (requires separate flood insurance)
Earthquake damage (requires separate policy or endorsement)
Normal wear and tear
Pest infestations
Neglected maintenance issues
How Much Coverage Do You Need?
Your dwelling coverage should equal the cost to rebuild your home (not the market value). Consider:
Local construction costs
Home size and features
Building code requirements
How to Save on Premiums
Bundle policies - Combine home and auto for discounts
Increase your deductible - Higher deductible = lower premium
Improve home security - Alarms and deadbolts can lower rates
Maintain good credit - Insurers often use credit-based scores
Shop around - Compare quotes from multiple insurers
Choosing a Policy
When comparing policies, look beyond just the premium. Consider:
Coverage limits and deductibles
Exclusions and limitations
Company reputation and claims service
Available discounts
Protect your biggest investment with the right homeowners insurance coverage.
Homeowners insurance covers dwelling damage (fire, wind, hail), personal property (belongings), liability (injuries on your property), and additional living expenses if your home is uninhabitable. Standard policies don’t cover floods or earthquakes.
▸How much homeowners insurance do I need?
Your dwelling coverage should equal the cost to rebuild your home (not market value). Personal property coverage is typically 50-70% of dwelling coverage. Liability should be at least $100,000, but $300,000+ is recommended if you have assets to protect.
▸What's not covered by homeowners insurance?
Standard policies exclude flood damage, earthquake damage, normal wear and tear, pest infestations, and neglected maintenance. Business activities at home may not be covered. Valuable items like jewelry often have low limits.
▸How can I save on homeowners insurance?
Save by bundling with auto insurance (10-25% discount), raising your deductible, installing security systems and smoke detectors, maintaining good credit, shopping around annually, and asking about all available discounts.
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