June is a special month for those stepping into the world of homeownership. Celebrated as National Homeownership Month, it marks a major life milestone, filled with both excitement and the daunting responsibilities of caring for a new home. Among those responsibilities, understanding insurance plays a critical role in protecting your investment and securing your financial future. Allow us to share three essential insurance tips that every new homeowner should consider.
Review Your Life Insurance Coverage
Purchasing a home is often more than just a change in address—it's a commitment with financial implications that can affect your entire household. Keeping this in mind, it's important to reassess your life insurance policy. For those who have upsized, increased coverage might be necessary to ensure that your mortgage is covered in any situation. Conversely, downsizing may open the door for reduced coverage, allowing you to save on premiums without compromising your protection. Tailor your life insurance to your new financial reality.
Understand Escrow and Insurance Premiums
Many new homeowners might wonder about the process of paying insurance premiums—a task often simplified through an escrow account managed by your lender. This means your lender will typically pay your insurance bills on your behalf, so even if you receive an insurance bill, don't worry. It's handled. Nevertheless, it’s wise to confirm with your lender if you're ever in doubt regarding payments. Maintaining open communication with your lender ensures there are no unexpected hiccups in policy coverage.
Consider Additional Coverage
Standard homeowners insurance policies are extensive, but they may not cover everything. Examine your needs and consider additional coverage options. It's often prudent to look into liability coverage, umbrella insurance, and particularly flood insurance, as the latter is not generally included in standard policies. Assess your home's location and risk level to determine if more comprehensive protection is warranted. This proactive approach can save substantial cost and stress should unforeseen incidents occur.
Understanding these aspects of home insurance will not only safeguard your new asset but also contribute to your peace of mind as you settle into your new home. Use this transition as the perfect time to review and possibly revise your insurance needs. For personalized guidance, reach out to your insurance provider or speak with a financial expert. Your home is not just a place—it's an investment in your future.