For a first time buyer or seasoned homeowner, purchasing a new home is an exciting, but sometimes complicated experience. You will spend countless hours searching for the perfect home that meets all of your specifications. Once you’ve found your dream home, you will be anxious to obtain a mortgage loan and move in. But in the United States, you will be required to obtain homeowner’s insurance before any loan papers are signed. This guide will lead you through the different angles of homeowner’s insurance and can be used as a reference throughout your journey to find the best possible coverage for you and your family.

The following sections will help you find the best sources for insuring your new investment and will give you the basic information you need to purchase a valuable insurance plan. You will learn about the importance of homeowner’s insurance, how an individual home and its location affects premium prices and how to cut insurance costs without losing the coverage you need.

Before beginning your investigation of plans and companies, it’s a good idea to familiarize yourself with some common insurance terms. Listed below are some helpful definitions that will make purchasing insurance a little less intimidating and confusing.

Deductible: The amount of money you pay out-of-pocket for claims filed against your insurance. For example, if your deductible is $500, you will have to pay that amount towards the insurance claim before your policy will start paying.

Risks: Any hazard which can potentially cause damage to your home or possessions. This includes natural disasters, storms, and theft.

Exclusions: Risks that are specifically listed in your policy that will not be covered by your insurance. You will want to review exclusions in your policy carefully and consider additional insurance if necessary.

Personal Property: Items that you move into your new home that are not a physical part of your house.

Actual Cash Value: The value of your personal property and home. Remember that this value is based on its worth minus any depreciation it has suffered.

These terms will help you communicate with insurance agents more efficiently and help you navigate web resources with ease. Undoubtedly, in your search there will be terms or phrases that you may not understand. Remember to ask for explanations about anything you don’t comprehend regarding your homeowner’s insurance before signing any paperwork. You will want to be fully educated about your coverage and protection if a time comes that you must actually use it.

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