Three Essential Insurance Tips for New Homeowners
June marks National Homeownership Month, a time to celebrate the joys and challenges of owning a home. Becoming a homeowner is a significant milestone that brings a sense of pride and accomplishment. Yet, it also introduces a host of responsibilities, particularly in financial and insurance matters. To protect your new investment, consider these three essential insurance tips.
Understand Escrow and Insurance Premiums
As a new homeowner, it's important to understand how your insurance premiums are typically paid. Many mortgages include an escrow account where the lender collects monthly payments for both property taxes and insurance premiums. This means your lender usually handles the payment directly with your insurance provider. If you ever receive a bill from your insurance company, don't worry—your lender likely has it covered. However, it's always a good idea to double-check with your lender if you have any payment questions.
Review Your Life Insurance Coverage
Life insurance plays a crucial role in safeguarding your mortgage and providing financial security. If you've purchased a larger home, you might need to increase your coverage to fully protect your mortgage. Conversely, if you've downsized, there's a chance you can adjust your policy to better fit your current financial situation. Reassessing your life insurance ensures that you're neither overprotected nor underprotected.
Consider Additional Coverage
While standard homeowners insurance offers valuable protection, it may not cover every risk. Explore additional insurance options like liability coverage, umbrella policies, and particularly flood insurance, which is not part of most standard policies. If your home is in a flood-prone area, assessing your risk and adding flood coverage can be an essential safeguard.
Homeownership is a wonderful achievement, but it's vital to understand your insurance needs to protect your home and financial future. Consider reaching out to your insurance agent for a policy review or consult a financial expert for personalized guidance.