First-time Homeowners Insurance

Understanding how much homeowners coverage you need for your first home.

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Home insurance for first-time homebuyers

A home is a major investment — not only of time but also of financial resources. Once you’ve closed on your home, the next step is insuring your new asset. Let’s walk through the steps you should take to insure your new home affordably and effectively.

  1. What information do you need to get a home insurance quote?
  2. Insuring your home: 6 key steps
  3. What is the average cost of homeowners insurance?


What information do you need to get a homeowners insurance quote?

While you can find an in-depth guide to homeowners insurance here, we’ll outline below the key information you need to get home insurance quotes.

Your new address

Your prospective insurer will use your address to gather basic details about your home. 

Your personal information and insurance claims history

Every state allows insurance companies to utilize different factors to determine rates — for both home and car insurance. Begin the insurance comparison process with an understanding of your credit score and claims history. Although home insurance companies will check this via your CLUE report and a soft credit check, anything you don’t reveal will impact your premium.

Info on additional safety features and extras

This includes fire alarms, sprinklers, or home security hardware. These components can help lower your overall insurance premium.

The age of your roof

This information may come prepopulated with your address, but you should have an idea of your roof’s age. Like your home’s safety features, this can impact your premium.

The type — and amount — of coverage you need

Most quoting experiences will offer an explanation of what each coverage provides but understanding your assets and how that applies to home insurance coverage will be important. Ask yourself how much liability and personal property insurance you need. Keep any special items such as jewelry, watches, and pieces of art in mind.

Here is an in-depth article discussing what homeowners insurance does and does not cover and lists some special considerations.

 

Insuring your first home: tips and important info

Now that we’ve outlined what information you need to get a home insurance quote, let’s detail some key steps and takeaways to keep in mind as a first-time buyer.

1. Research the company’s claims satisfaction 

You don’t want to find out after a major claim your current provider doesn’t have a good history of handling claims. Subpar insurance companies will look for opportunities to get out of compensating you for your losses — or at least make it more difficult to recoup funds. Make sure you check the satisfaction of each insurance company's claims prior to purchasing a policy.

Google Reviews, the Better Business Bureau, and J.D. Power are good starting points when researching insurance providers.

2. Think coverage first, price second

Your home is a major financial investment. Compared to the actual cost of your home, your insurance is significantly less expensive. With this in mind, don't skimp on coverage just to save money. In the event of a catastrophic loss, i.e., a total loss, you'll only be hurting yourself by limiting your coverage. 

3. Understand what your insurance covers and how much coverage you need

Understand what perils your policy covers — and doesn't cover. Insurance companies will often exclude certain causes of loss from coverage, providing the option to add coverage back via an endorsement. Review the coverage you might need and how much to purchase with an insurance agent before you need the coverage.

Below are the basic coverage components of a homeowners policy.

  • *Dwelling coverage — protects the home's physical structure
  • Other structures coverage — covers a detached garage, gazebo, fence, pool, or other on-property structure
  • Personal property coverage — covers the insured party's personal property
  • Liability insurance — covers damage the insured inflicts on others and their property
  • Additional living expenses — compensation for additional living expenses in the event of a home being deemed unliveable
  • Medical payments to others — covers the medical expenses of someone injured at the insured property

*First-time homeowners might not understand the difference between dwelling coverage (calculated at a replacement cost value) and the market value of the home. Dwelling coverage is designed to repair or replace the home if it’s damaged as a result of a covered loss. This cost is independent of the market value of your home.

The dwelling coverage replacement value will not match the market value of the insured home. A mortgage lender might require you to raise the value of your replacement cost and your insurance company might not allow this. Speak to a representative at your insurance company if this happens.

4. Consider location-specific weather events 

If you live in an area prone to natural disasters, it’s unlikely you will have insurance coverage for these perils. Hurricanes or other flooding events will not be covered by your homeowners insurance. If your home is located near the coast, you need to buy flood insurance through FEMA. Other natural disasters worth considering include earthquakes, tornadoes, wildfires, mudslides, and sinkholes. If you live in an area prone to these events, consult your insurance company regarding the best course of action.

5. Insure high-value items individually

Coverage for certain valuables will be limited by your insurance company because of their high value — this is known as an insurance company’s sub-limit of liability. Below is a list of the common limitations and typical maximum reimbursement amounts (minus the deductible). 

Sub-limitPropertyLimitations
$200Money, Gold, Coins 
$1,500Jewelry, watches, fursTheft-only
$1,500Watercraft, trailersTheft-only
$2,500Firearms 
$2,500Silverware 
$2,500Business propertyOn-premises
$500Business propertyOff-premises
VariesElectronics


If you own any of these items, consider adding a personal property endorsement or scheduled endorsement to your insurance policy. A personal property endorsement will raise your content coverage for that entire item classification — for example, the total value of your jewelry collection. A scheduled personal property endorsement is a common approach when insuring one very valuable item, such as an engagement ring. This would require an appraisal, but is the best way to protect your belongings.

6. Consider bundling policies

Most major insurance providers offer different insurance products, including car insurance, home insurance, renters insurance, and life insurance. You can earn discounts if you bundle multiple policies with the same company. By bundling policies with the same company from which you carry homeowners insurance, you could earn a discount on each of the products.

7. Compare rates carefully

Once you have an idea of which coverage — and how much insurance — you need, compare quotes from as many insurance companies as possible. Research reviews and compare premiums. Although it can be a tiring process, it’s certainly easier than dealing with a sub-optimal insurance provider after a claim. 

For new homeowners, we recommend Hippo. The company's coverage is easily customizable and comes with a quick quoting process, not to mention great claims satisfaction ratings and competitive insurance rates. Click below to check out homeowners rates from Hippo.




If you’re still researching and would like more information, check out our related articles below.


What is the average cost of homeowners insurance?

The average price will vary based on your location, your home, and you. Using a methodology outlined here, we checked insurance rates from the top carriers in the US. Bear in mind, these rates should be evaluated as rough averages. Based on your location and coverage needs, your rates will differ.

Insurance ProviderAverage Annual Premium
Allstate$1,635
Farmers$2,027
Liberty Mutual$1,830
Nationwide$1,737
State Farm$1,501
Travelers$1,709
USAA$1,736

 

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