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Insurance Tips for First-Time Home Buyers: Your 2023 Guide
Homeowners Insurance | Safety & Prevention
By Adam Cutter
May 16, 2020 3 minute read

Walking through the door of your new home is an exhilarating moment. But the path to get there—inspections, negotiations, and financial preparation—can be daunting. Before you unlock the door to your new life and start making memories, it’s essential to secure homeowners insurance.

Deciphering Home Insurance Policies

Home insurance policies can be complex and rife with jargon. It's crucial to understand what's included in a standard policy, which usually covers:

Essential Tips for First-Time Home Buyers

  1. Research Before You Buy

Investigate the potential risks involved with a property before making a purchase. Obtain a Comprehensive Loss Underwriting Exchange (CLUE) report, which provides a seven-year history of claims and losses on the property. Also, research location-specific factors, such as crime rates and proximity to a fire station, that could affect your insurance premium.

  1. Know the Difference: Replacement Cost vs. Market Value

Insurance based on Replacement Cost covers rebuilding your home with similar materials, whereas a Market Value policy covers your home's current cash value. Opt for a replacement cost policy to avoid potentially significant out-of-pocket expenses.

  1. Fill in Coverage Gaps

Standard policies have exclusions. Consider adding coverage for flood, earthquake, and sewer backup damages if necessary. Extended replacement cost coverage and umbrella policies can also provide additional peace of mind.

  1. Bundle Up

Bundling multiple policies—like home and auto—with one company can lead to significant discounts on your premiums.

  1. Be Smart About Filing a Claim

Keep thorough records, including receipts and a digital inventory of your belongings. When filing a claim, act quickly and provide all necessary documentation to ensure the best outcome.

  1. Keep Up-to-Date

Regularly review your policies. Changes to your home, or even your neighborhood, can affect your premium. Be sure your coverage matches any new additions or improvements to your property.

  1. Talk to an Expert

A Chalmers agent can review your situation and recommend a policy that suits your needs. They can explain your policy in detail and suggest any additional coverages that may be beneficial.

Protect Your Investment

A 2013 survey found that 60% of homes in the United States are underinsured, meaning that many homeowners are left shouldering a significant portion of the rebuilding costs after a disaster. Don't let this be you.

Taking the time to understand homeowners insurance can prevent this devastating scenario and ensure that your new home remains a source of joy, not stress. It’s a crucial step towards safeguarding your most valuable asset: your home.

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