Five Considerations For First Time Homeowners to Know About Insurance

Congratulations on the pending purchase of your first home! Besides the mortgage and taxes you will now be paying, you are also going to need to fork out some money for homeowner's insurance. This insurance option is required by your mortgage lender, so make sure you understand what you are buying and how to use it if you should need to someday.
Why Homeowners Insurance Is Needed
Homeowner's insurance is necessary to cover damages to a property for unforeseen events. Your lender will require it, because without it they could lose all of the money they invested into your home if you had a fire or other disaster. You need it because it protects your home and items within the home from damage or theft. It also protects you from liability for injuries that happen on your property.
Some insurance policies also cover living expenses if your home should become unlivable after a disaster. For instance, if you are forced to move to a hotel after a fire, your insurance policy may cover that cost, as well as some of the cost for the food you eat while repairs are underway.
How to Find Coverage
To find homeowner's insurance, talk to your favorite Canada insurance provider. Most of them will offer homeowner's policies. However, do not purchase a policy from the first lender that you find. Take some time to shop around, because the cost of home insurance varies tremendously from provider to provider. You can also talk to your mortgage broker or real estate agent to see if they have any good ideas about insurance providers. Friends and family who are homeowners may have names for you as well.
What Is Covered?
Most basic home insurance policies cover the same things. A basic policy will cover your belongings and your home against damages due to natural disasters, accidental fires, and theft or vandalism. These types of policies typically carry exclusions, including things like floods or earthquakes. To have these situations covered, you will need to purchase additional coverage or a rider to add this policy.
Discounts Are Available
In light of closing costs and the other expenses that surround a new home purchase, insurance is not typically a big expense. However, there are many things you can do to lower the cost of your premium if you need to. One is to increase your deductible. Canada insurance providers always lower premiums when a deductible is increased. Choose a deductible amount that you could pay if you had to, but make it as high as is feasibly possible if you need to lower your insurance cost. You can also get a discount by installing a home security system in your home to deter thieves. Insuring your home with the insurance provider that also carries your car insurances or some other insurance product will also earn you a discount.
Always Check Maximum Payouts
When shopping for home insurance, make sure that you check the maximum payouts on the policy. For instance, your garage may be covered, but it may only be covered for up to $2,000 worth of damage. You need a policy that has adequate coverage, because if you do have to make a claim someday, you do not need to be left holding a substantial bill. You will have many other expenses after a disaster to deal with, so make sure your insurance covers what it covers adequately.