When Do You Need to Get Homeowners Insurance?

| December 18, 2012

home insuranceDo you need homeowners insurance? Whether you have a mortgage or own your home outright, then the answer to that question is unequivocally yes. Homeowners insurance protects what is likely your most valuable asset and covers your liability for injuries to other people while they’re on your property. Most mortgage lenders also require you to have homeowners insurance before they will lend you money. By learning a little bit about homeowners insurance before talking to insurance agents in your area, you will ensure that you are purchasing the right coverage for your needs.

Please note that if you rent your home or live in a condominium or mobile home, then your insurance needs will vary from that of a single-family homeowner, and you should consult with an insurance agent about your specific situation.

Check Out Educational Resources

If you are new to the world of homeowners insurance, start by familiarizing yourself with the basics. One helpful resource is the consumer section of the National Association of Insurance Commissioners (NAIC) website. There you’ll find the PDF booklet “A Consumer’s Guide to Home Insurance” and other helpful tools, including a clickable map linking you to your state’s insurance department website.

The Insurance Information Institute offers an online brochure titled “Am I Covered?” that answers consumers’ most common questions about homeowners policies. This brochure can help you identify gaps in your coverage that you might want to address with your agent.

Do Your Homework on Agents and Insurance Companies

Before you sign on the dotted line with any insurance company, make sure your agent and insurer are licensed by your state insurance department. This information is available on your state insurance department’s website, where you might also find online price/policy comparison tools.

Ask Agents Plenty of Questions

As you are obtaining quotes for your homeowners policy, keep this list of questions from NAIC’s “A Consumer’s Guide to Home Insurance” at the ready:

  • How can I find out the claims history of a home before I buy it?
  • How will submitting a claim affect my premium when I renew the policy?
  • What discounts are available?
  • What does the policy cover, and what doesn’t it cover?
  • What are the coverage limits?
  • How much personal property coverage do I need? (NAIC offers a smartphone app to help you conduct a home inventory.)
  • Do I need special coverage (flood, earthquake, etc.) based on my location?
  • How will my credit history affect my premium?

Home ownership is a great achievement and a sign of financial stability. The right insurance agent (find one at DexKnows) will help you determine the level of coverage you need to protect all that you have accomplished.

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Category: Insurance

About the Author ()

Kate Johanns is an Austin, Texas-based writer and editor. She is a graduate of the University of Missouri School of Journalism.