Three Essential Insurance Tips for New Homeowners

June marks National Homeownership Month—a time to celebrate the exciting journey of owning a home. Becoming a homeowner is a major milestone, filled with both excitement and responsibility. As you embark on this new chapter, it's crucial to recognize the financial and insurance responsibilities that come with homeownership. In this post, we'll explore three key insurance considerations to help protect your valuable investment.

Understand Escrow and Insurance Premiums

As a new homeowner, you might be paying your insurance premiums through an escrow account managed by your lender. It's common for lenders to handle the payment of your insurance, even if you receive a bill directly from your insurance provider. This system is designed to simplify your payment process and ensure timely payments. If you ever have questions about these payments, it's advisable to reach out to your lender for clarification.

Consider Additional Coverage

Standard homeowners policies provide a good foundation, but they may not cover everything. It's essential to review your policy to ensure you have adequate liability coverage, and you might want to consider add-ons like umbrella insurance or flood insurance. Especially note that flood insurance is not typically included in standard policies. Assess your home's risk level and consider adding flood insurance if necessary. This additional coverage ensures you are fully protected against potential risks.

Review Your Life Insurance Coverage

Buying a home often leads to changes in your financial situation. It's an ideal time to reassess your life insurance coverage to ensure it aligns with your new needs. If you've upsized to a larger home, you may need to increase your coverage to provide enough security for your mortgage. Conversely, if you've downsized, you might find opportunities to reduce your coverage and adjust your policy to better fit your current financial situation.

Understanding home insurance is crucial in protecting your home and securing your financial future. Use this National Homeownership Month to review your policies, ensuring you get the coverage you need. For further guidance, consider reaching out to an insurance professional or financial advisor to explore your options and tailor a plan that suits your situation best.