When buying a home for the first time, there are many exciting things to look forward to – finding the perfect home, the day you move in, unpacking your belongings, decorating and making it your own.
Another less exciting but essential thing that goes along with home ownership is homeowner’s insurance. Insurance, in general, is not most people’s favorite topic, whether it’s car insurance, life insurance or medical insurance. But there’s a reason these all exist, so it’s worth taking the time to understand homeowner’s insurance.
Read on to learn everything you need to know about homeowner’s insurance, from what it is and when to get it to what it does and does not cover.
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What is Homeowner’s Insurance?
There is a lot of confusion about what homeowner’s insurance is and what it’s meant for. It’s not meant for every problem. Typically, homeowner’s insurance is meant to cover damage from disasters and unforeseen events. In these cases, it will pay to repair the house and property, to repair or replace belongings, pay to cover alternative living costs while your home is under repair and cover personal liability if someone else is injured on your property and you’re held legally responsible.
Homeowner’s insurance should cover costs related to events that aren’t specifically excluded in your policy.
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When Should I Get Homeowner’s Insurance?
It is likely that your mortgage lender will require that you have homeowner’s insurance in order to get a mortgage. After you find your new home with a specialized Oshawa realtor, you should start looking around. Mortgage lenders generally want to see evidence of insurance a few days before you close.
While last-minute calls to insurance companies from frantic homebuyers needing insurance the same day, they’re closing isn’t unheard of, it risks delaying the closing and can limit your opportunity to compare. Shopping early means you can shop around to compare coverage and rates.
If you’re one of the few people purchasing a home without a mortgage, it’s still wise to get insurance to protect you against weather-related damage to your home, like from fire and wind.
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What Does It Cover?
For those who don’t look over their policies carefully, the things that are and are not covered can be a surprise. Water damage is a good example. Damage from a pipe inside the home is typically covered, but not if the water comes from outside the house like during flooding due to rainfall or sewer backups.
Any damage caused that could have been prevented by reasonable home maintenance typically won’t be covered. That includes leaks from roofs caused by wear and tear, pest infestations and damage, and mold.
It’s also essential to make sure your coverage is up-to-date. It’s wise to do an annual check-in to make sure your coverage is updated if you’ve done renovations or remodelling and also to update your home inventory – a list of personal belongings which can make for much easier and faster claims’ settlements.
Now that you know all about homeowners’ insurance, be sure you’re prepared and get the best policy for your needs.