How To Buy Your First Home Insurance Policy

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Buying a home is a big step, no longer a renter you're working towards the goal of ownership

, which will give you a valuable asset for the future. As if buying a home isn't complex enough, you'll also need a home insurance policy to go along with it. Here are a few tips to help you figure out what you need.

Is the property insurable? Generally most properties are insurable for homeowner's insurance. However there are exceptions. Some particularly run down or neglected properties may only be insurable as part of a HUD (Housing and Urban Development). Other insurability concerns will likely be about particular aspects of the building. Does it have a modern roof and basement? How old are the utilities? Has the home recently been claimed on. All of these will affect if the home may be easily insured.

Discounts and deductibles. Most home insurance plans will have some kind of deductible built into the home insurance policy. This means that whatever the number, you'll have to pay that difference before the insurance pays out to you. Deductibles range a wide variety of sums but an average one is just around $1000. Sometimes you may be able to drastically increase your deductible in order to garner better overall price on your insurance.

-Along with modifying the plan by choosing deductibles, you may also be eligible for discounts. A discount is simply an amount taken off the overall price of your home insurance policy. The most common discount is granted for having multiple policies with the same company, such as home, life and auto insurance. This can save you a lot of money in the long run. Other common discounts are often granted for age (being over 50 helps) and for having a relatively new home.
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How much insurance do you need and what does it cover? When buying a home insurance policy you generally buy an amount of coverage that you'd like to receive in event of a disaster. This can be more or less than the home's value, however most insurers start with the home's purchase price and work up from there. It's a good idea to buy 150-200% the purchase price of the home in order to ensure that you can still afford to rebuild despite inflation and other costs.

It's also important to keep in mind that not all personal items and belongings will be covered by the average insurance plan. If you own especially valuable goods such as jewelry, art, antiques or firearms it is best to insure those separately.

by: Mark Etinger

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