For most people, buying a new house is the most significant investment they will make. That’s why insurance is critical to protect this new valuable asset. Different types of homes require different insurance, so it pays to know your options while browsing properties.
Read on to find out the five most important types of insurance you might need for your new home:
1. Standard Homeowner’s Insurance
Pretty much every property requires standard homeowner’s insurance. This policy offers dwelling coverage, contents coverage, and personal liability. Dwelling coverage protects the structure of your home from a range of common risks. These include fire, theft, vandalism, hail damage, and some other instances of a significant or total loss. Contents coverage protects the assets inside your home. These include clothes, electronic appliances, furniture, and other belongings. Personal liability covers bodily injury on your property.
2. Flood Insurance
Flood insurance protects your home and your assets from damages related to a flood. In some policies, flood insurance is optional, but some homeowner’s insurance policies come with mandatory flood insurance. This is especially true in flood-prone areas. Flood insurance comes with its own deductible and will vary depending on several factors. In order to calculate the flood insurance cost, the insurer takes into account your location, the age of your property, and any flood measures that are already in place. If your insurance policy does not cover floods and your property is in a flood-prone area, consider expanding the policy. Your insurance won’t pay for structural damages or damages to your belongings if there is a flood involved.
3. Earthquake Insurance
This optional policy ensures your home is against damages caused by an earthquake. Earthquake insurance is important only if you are buying a house in an earthquake-prone area. Since earthquakes can cause total property loss, and this is not covered by a standard homeowner’s insurance – you should not ignore it.
4. Medical Payments Coverage and Extended Personal Liability
This coverage provides payment for medical expenses that occur because of an accident on your property. This is an expanded version of the standard personal liability that covers immediate medical treatment regardless of cause.
5. Old Home Insurance (HO-8)
Finally, old home insurance is a specialized type of homeowner’s insurance. This type of insurance protects homes that were built with materials and techniques that are no longer in use. Such a policy ensures your home is against the cost of installing modern materials in case of renovation or repair. HO-8 is ideal if you are buying a historical house.
If there have been a number of claims on other homes in the neighborhood, it can affect the cost of your premium, even if you have a perfect record. If you live in Manitoba, Canada, make sure to visit NationWest, a Winnipeg Insurance company, for more information.