June Homeownership Month: Insurance Tips for New Buyers

June is National Homeownership Month, an occasion to celebrate the major milestone of owning a home. This exciting phase also comes with its own set of challenges, particularly around the responsibilities tied to homeownership, such as handling financial and insurance obligations. Secure your newfound investment by following these three essential insurance tips that every new homeowner should prioritize.

Understand Escrow and Insurance Premiums

Many new homeowners find it surprising that their insurance premiums are commonly handled through an escrow account managed by their lender. This means even if you receive a bill from your insurance provider, your lender will typically manage the payment, relieving a bit of stress from an already busy homeownership process. However, it's crucial to maintain a line of communication with your lender. If you ever have questions about the status of your payments, never hesitate to reach out for clarification.

Review Your Life Insurance Coverage

Buying a home often signals the need to reassess your current life insurance coverage. If you've upgraded to a larger home with a hefty mortgage, your coverage may need to increase to ensure the mortgage is fully protected if the unthinkable happens. Conversely, if you've downsized, a review might reveal that you can adjust your policy to better fit your new financial situation. This reassessment can alleviate future stress and secure your family's financial stability.

Consider Additional Coverage

Standard homeowners policies typically don't cover everything you might expect. It’s important to review your liability coverage and to consider additional policies, such as umbrella insurance and flood insurance, for comprehensive protection. It's especially critical to remember that most standard policies do not include flood insurance, so evaluating your risk level and adding appropriate coverage if necessary is imperative.

Understanding the nuances of home insurance is vital for protecting your home and ensuring a secure financial future. Consider reaching out to an insurance agent for a policy review or consult with a financial expert for personalized guidance, helping you make informed decisions as you embark on your homeownership journey.