If you’re about to purchase your first house, it’s important to acquire homeowners insurance right away. This form of coverage protects your property and belongings in the event of an unlikely accident, like a fire or flood. If you’ve never had one of these policies before, use the guide below to get informed.

What to Know About Homeowners Insurance

Which types of insurance policies exist?

There are two types of policies, those that cover the replacement costs or grant you the home’s cash value. The former compensates you based on how much it would cost to repair or rebuild the damaged area. The latter is similar, but it subtracts the amount at which your home depreciated before the damage occurred.

What kind of coverage should you expect?

It’s standard for this type of insurance to also cover your belongings inside it, including any personal, sentimental, and expensive items. Liability is typically included as well, which compensates you for accidental damage caused by you or a family member. It also pays the medical bills of anyone who is injured on your property.

Is a basic policy enough?

If you live in an area that experiences frequent natural disasters, like flooding or earthquakes, look for an insurance policy that covers those events as well. Otherwise, you’ll have to get separate policies for them.

If you want coverage beyond what’s available, an umbrella insurance policy may be the best option. It allows you excess coverage beyond the policies you already have.

Is it required?

Although it isn’t mandated by law, the Federal Housing Administration requires insurance through an escrow account if they’re providing your loan. Most private lenders will require you to get it for conventional loans before they finalize your purchase. The only way to get around it is to pay for the entire price of the home in cash.

How can it be paid?

If you have an escrow account, it would include the insurance with your monthly mortgage payment. With conventional loans, it’s not uncommon for a lender to require that you pay anywhere from 10 to 100% of the first year’s worth of insurance when you close. After that, you would make a separate payment monthly.

To get the coverage you need from homeowners insurance, contact Associated Insurance Services in Anchorage, AK. These professionals will make the process easy and put your interests first. Each broker has over 25 years of experience, and they’ll help you create a personalized policy to suit your situation. To get a quote, call (907) 349-2229 or send a message online.