Homeownership Month: Insider Insurance Tips for New Owners

June is celebrated as National Homeownership Month, a time when many new homeowners revel in the joy of their new beginnings. Owning a home is indeed a major milestone—it signifies stability, accomplishment, and the start of new responsibilities. Alongside the excitement, it is essential to acknowledge the financial and insurance obligations that come with homeownership. Protecting your investment through informed insurance decisions is crucial. Let's explore three vital insurance tips every new homeowner should consider.

Consider Additional Coverage

A standard homeowner’s policy provides the basic coverage you need, but it may not cover all potential risks. For instance, flood insurance is commonly excluded. Assess your area's risk level for floods and other natural events not covered under standard policies. Consider bolstering your protection with umbrella insurance or increasing your liability coverage. Being fully covered ensures peace of mind, knowing you're sheltered from unexpected events.

Understand Escrow and Insurance Premiums

Many new homeowners often find themselves confused by the way insurance premiums are paid. Typically, these are managed through an escrow account established by your mortgage lender. This means your lender pays your insurance premiums on your behalf, using funds collected monthly along with your mortgage payment. Even if you receive an insurance bill, don’t worry. It's a good practice to confirm details with your lender if there's ever any doubt or if you receive unexpected bills.

Review Your Life Insurance Coverage

Becoming a homeowner is an ideal time to reassess your life insurance needs. If buying a home has caused you to upsize, you may need more coverage to ensure that your mortgage is fully secured if something were to happen to you. Conversely, downsizing might present an opportunity to adjust your coverage, potentially lowering your premiums. Align your life insurance with your new financial realities to safeguard your loved ones.

Understanding home insurance thoroughly helps in securing your home and financial future. New homeowners should take a proactive approach—whether that's arranging a policy review or consulting with a financial expert for personalized insurance guidance. Taking these steps ensures that you are protecting what's likely your largest asset—your home.