The how and the why of protecting your property—and your peace of mind

Buying a home is one of life’s biggest accomplishments—and biggest purchases. Taking steps to safeguard it should be a no-brainer. Enter: homeowner’s insurance.

An online search for a plan can lead to more questions than answers: Why are there so many choices? What’s the difference? How can I be sure this is going to cover what I actually need? And so many more. With the right information, finding the best policy can leave your home—and wallet—in top shape.

What does homeowner’s insurance do?

It’s totally nerve-wracking to consider all of the potential pitfalls of owning a home—from burst pipes to overflowing bathtubs to strong winds that break a window. Homeowner’s insurance protects the property against damages. Think of it as you would car insurance if there’s a wreck.

Why do I need it?

There are two reasons. The first is simply protection. The second is because your mortgage lender says so. Homeowner’s insurance is a requirement if you are financing your home. Though once you’re done paying the mortgage off, it becomes elective. Because your lender requires insurance, the time to purchase a policy is before you close.

What doesn’t it cover?

While most basic homeowners insurance policies don’t cover furniture, appliances, floods or natural disasters, there are options to supplement your policy. When you go through the process of closing on the house, an inspection report will give the state of the property’s roof and plumbing (Bungalo homes come with a certified pre-owned certificate). Buy extended protection for the roof if it was damaged in the past in bad weather. And if the report shows past sewage problems, consider water backup coverage.

Policies also offer add-ons to standard coverage, like personal property insurance, which protects things inside the home like furniture. There is also extended coverage for not-so-common-but-scary events, like earthquakes. Hurricane and storm insurance are additional, but may be necessary depending on where you live.

How do I find the best deal?

Begin your search by getting rates from an insurance company you’re already acquainted with. You may get a reduction on the premium if you have auto insurance with them. Bundling plans with the same company could lead to as much as a 30 percent savings. Also, this is one of those situations where crowdsourcing doesn’t hurt. Check with friends and family: Would they recommend their vendor? The best insurance companies are the ones that promptly and professionally handle claims and payment. Head to social media to see what people say about an insurer you’re considering—is their Facebook page a flood of praise or problems? And if you do start with a Google search, be sure to consult an independent site for advice (such as NerdWallet or Value Penguin).

How much will it cost?

Rates vary from state to state and are affected by a number of factors. It depends on property type, the cost it would take to rebuild that property, and the location of the property. For example, someone living in a coastal community in Maine will have different requirements—like flood insurance, which costs extra—than someone who lives in the Arizona desert.

When looking for a plan, keep an eye out on the deductible (the amount that you must pay before the policy will reimburse claims for damages). It can not be more than 5 percent of your coverage. The typical deductible for standard homeowners insurance policies ranges from $500 to $1,500.


Taking steps to make your home safer, like installing deadbolts and a home security system, can also help you get a lower rate—and help you sleep better at night. Which, honestly, is the true value of homeowner’s insurance.  

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