Steps to Home Ownership- #11: Homeowner’s Insurance

Homeowner’s Insurance is one of the last, and sometimes overlooked, conditions you’ll have to satisfy for your mortgage. Homeowner’s Insurance is a policy that typically covers losses to one’s home, its contents, and personal property as well as liability insurance for accidents that may occur at the home. Contact your insurance agent  to open a homeowner’s insurance policy. Similar to other types of insurance, homeowner’s insurance has options for the level of coverage and an agreed upon deductible. A homeowner’s insurance policy typically covers damage caused by:

  • Water damage from plumbing, appliances, and heating /cooling systems
  • Fire and smoke
  • Severe weather
  • Theft

If it has been determined that your home is in a flood zone, you will also be required to get Flood Insurance as a homeowner’s insurance policy does not cover water damage from floods. In addition, depending on the insurance company, homeowners may have the option to select the following additional coverages:

  • Water damages caused by a backed up drain or a broken sump pump
  • Valuable property such as antiques, jewelry, or sports equipment
  • Yard and landscaping items and equipment
  • Electronic data recovery

This may be a good time to see if your insurance agent can bundle your policies (homeowners, car, umbrella, etc.) together to reduce your premiums. Regardless which policy you select, you will be required to pay for the first year of coverage up-front while subsequent years will be included in your escrow portion of your mortgage payment to Sawyer Savings (not all insurance is escrowed, flood is required to be).