First-Time Homebuyer Complete Guide to Homeowners Insurance

Why Homeowners Insurance Is Non-Negotiable

If you are buying a home with a mortgage, your lender will require homeowners insurance. Even if paying cash, skipping insurance would be a massive financial risk.

What Standard Homeowners Insurance Covers

A standard HO-3 policy includes dwelling coverage, personal property coverage, liability coverage, and additional living expenses if your home becomes uninhabitable.

What It Does Not Cover

Flood damage, earthquake damage, sewer backup, and damage from poor maintenance are excluded. You need separate policies or endorsements for these.

How Much Coverage Do You Need?

Your dwelling coverage should be enough to rebuild your home at current construction costs, not market value. Ask about replacement cost vs. actual cash value.

How to Save on Your First Policy

Get quotes from at least five insurers. Ask about discounts for new homes, security systems, and bundling. Consider a higher deductible if you have savings.