Becoming a first-time homeowner can be equally exhilarating and nerve-wracking. Not only is it a significant financial commitment, but it’s also a considerable responsibility. Fortunately, homeowner’s insurance can help protect you from potential pitfalls, like natural disasters and personal injury litigation. Here’s what you should know about insuring your new home.

What to Know About Homeowner’s Insurance

Do I need it?

Unlike car insurance, homeowner’s insurance isn’t required by law. However, you’ll most likely need to buy a policy to receive a mortgage loan. Even if you pay cash for the property, purchasing insurance is needed to protect your investment.

How much coverage do I need?

Most insurance policies are based on real estate market value or replacement construction cost. In most cases, it’s best to purchase a policy based on the full replacement value to ensure you can rebuild your home if it’s totaled by a fire, flood, or natural disaster.

In some cases, particularly in a depressed housing market, the rebuild cost may be higher than the resale value. In other instances, the resale value may be greater since the land is factored into this price even though it isn’t a factor in rebuilding costs. Ask your agent for guidance as to how much coverage is appropriate.

What does it cover?

Policies vary depending on the provider and type. However, standard policies pay to repair or replace the home in the event of a fire, extreme weather, vandalism, or theft. Many plans also include some coverage for personal belongings lost in a covered incident.

Liability protection is another important component. This protects you financially in the unlikely event someone is injured on your property. Most policies don’t cover damage caused by flooding or earthquakes. Depending on your area, you may want to ask your agent about purchasing separate coverage for these instances.

What’s included?

In most cases, policies cover all of the structures on the property. This includes sheds, garages, fences, hardscaping features, play equipment, and mother-in-law units. You can also purchase coverage for valuables, such as boats and snowmobiles, that are stored on the premise.

If you’re in the market for a new home in Fairbanks, AK, secure your investment with an insurance plan from Dunlap Agency. This insurance agency has been the state's preferred resource for personal coverage since 1986. Call (907) 456-5202 to request a free quote, or visit the website to learn more about their policies.