Homeowners Insurance for Landlords

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While buying your first home is an exciting experience, it is also a process that can be riddled with stress and fear – first-time home owners are, quite obviously, inexperienced, and need every bit of help and advice they can get. One of the major procedures involved in buying a house is getting insurance, and this can be a confusing process for first-timers. However, a few simple tips and guidelines can make the entire process a whole lot easier. The effort is worth it, as insurance gives homeowners a sense of security, even if they are away from the house on vacation.

Make sure your house is fully covered

Ensure that the amount listed in your insurance policy is enough to comfortably cover the costs of rebuilding and refurbishing the entire house in case you lose it all in an emergency or other unforeseen events – the last thing you want is to be under-insured. The cost replacement estimate is generally determined by insurance companies via a cost estimator, but if you wish to come up with an estimate yourself, you can hire a home builder to ascertain the rebuilding cost. If your home has any expensive or unique features, these should be included in the estimate too. Equipped with the rebuilding estimate, you can select a coverage. Choose between:

  • Guaranteed Replacement Cost Coverage: A rarely offered policy, this ensures that the insurer bears the entire cost of rebuilding, regardless of what the rebuilding estimate was.
  • Extended Replacement Coverage: This extends the coverage cap up to 125% of your home’s insured value.
  • Inflation Guarantee (or Guard): This makes sure that your home’s insured value remains at par with that of the marketplace.

If you can manage to obtain a good home appraisal, followed by extended replacement coverage and an inflation guarantee, consider yourself all set.

Liability insurance

First-time homeowners need to realize that in addition to insuring their property against damages, they also need to devise a plan for situations in which they find themselves the target of third party claims. These might occur when individuals suffer some sort of personal injury on your property, or neighbors demand payment for some sort of damages to their property. To fortify yourself against such scenarios, make sure a liability insurance policy is included with your home insurance. In the case of the above mentioned scenarios, this policy will cover medical bills or damages.

Get additional coverage for your valuables

A standard HO-3 insurance policy covers damages to homes and possessions, but only covers a few assets (that too, indirectly). To prevent yourself from losing valuables like artwork and fine jewelry, you should consider paying a little extra to ensure that all your possessions are fully covered.

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