June marks National Homeownership Month, a time to celebrate the dream of owning a home. As exciting as this milestone is, it comes with its share of responsibilities, including those related to insurance. Here we explore three essential insurance tips every new homeowner should consider to protect their investment.
Review Your Life Insurance Coverage
Purchasing a new home often prompts many homeowners to reassess their life insurance coverage. A new mortgage could mean increased financial obligations, making it crucial to ensure that your life insurance policy covers the home loan fully. If you have recently upsized, you may need to increase your coverage; conversely, downsizing might permit you to decrease it. Consider consulting with an expert to recalibrate your policy to fit your financial situation accurately.
Consider Additional Coverage
Standard homeowners insurance policies do not cover everything. Many homeowners are unaware that flood insurance is not included in most basic policies, despite it being vital for homes in high-risk flood zones. Beyond this, evaluate your needs for liability coverage and umbrella insurance to safeguard against unforeseen events. Periodically reviewing your policy ensures you have the comprehensive protection needed to secure your new home.
Understand Escrow and Insurance Premiums
Many new homeowners find that their insurance premiums are paid through an escrow account managed by their mortgage lender. This can be confusing, especially when a bill arrives from the insurance provider. However, your lender generally handles these payments. It's always wise to stay informed by checking with your lender if you're unsure about any payment details. Keeping yourself in the loop can prevent mishaps and financial blunders regarding your insurance premiums.
Understanding the intricacies of homeowner's insurance is a crucial step in protecting your home and financial future. For a more personalized approach, consider reaching out to experts who can assist in evaluating and adjusting your insurance policies. Empower yourself with knowledge and secure peace of mind as you embark on this exciting journey of homeownership.