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Getting your very first house is undoubtedly one of the largest milestones in anyone’s life. This involves years of savings and planning on your end and probably a bit too much scrolling of real estate apps at night. However, what happens after the big move? You need a good home insurance policy to protect yourself, your investment, and all of your belongings from unexpected disasters and damages in the coming years. For first-time buyers, this can prove difficult since the home insurance industry has changed a lot over the past few years due to rising inflation in construction material prices and altered climate patterns. But fear not; now is the perfect time to compare the top national home insurance providers and get the best deal available.
Home Insurance Overview for New Homeowners
As stated earlier, securing a great home insurance policy is an integral part of protecting your asset and personal possessions. There are quite a few things new homeowners must keep in mind when trying to obtain a great insurance plan. First of all, premium hikes seen in early 2020s have finally slowed down significantly to an average of less than 10% per month in most cases. At the same time, geographical factors still play a critical role – high-risk locations with plenty of natural disasters, such as Florida, California, or Texas, require special attention from you as a buyer. Finally, new homeowners need to focus not only on the premium but also evaluate the provider’s financial strength, customer service quality, and deductible structure in detail to make sure the insurer can actually pay out in case of an emergency situation.
Top National Home Insurance Providers for New Homeowners
Each individual and their new property will need a unique policy from the top national home insurance providers, which means the final decision depends solely on your preferences and situation. Here are some of the best options currently available in the marketplace for new homeowners.
Allstate: Best for Beginners and Digital Experience
Allstate is one of the best platforms out there for first-time homebuyers in terms of accessibility and educational opportunities provided. The insurer allows you to manage, change, and submit all information and documents related to your policy using their amazing mobile application, which was rated as one of the best in the market. In addition to that, Allstate has plenty of useful educational resources that explain insurance terminology to the newcomers in detail. Moreover, they offer great discounts when adding your home policy to an existing auto insurance package, along with special claim-free discounts reducing your deductible over time.
Amica: Best Customer Service and Claims Management
If you value high-quality customer services, pleasant communication, and a smooth claims procedure most of all, Amica can be the right choice for you. This provider usually takes the number one spot in any national survey related to claims handling and customer service, as their low customer complaints and great claims satisfaction scores confirm. Being a mutual insurance company, Amica provides its customers with unique dividends in selected states, which means a certain portion of your insurance payment is returned to you in case of financial success. Moreover, their general coverage is very generous and includes many useful perks, such as a specially-trained agent who sets the limits of your dwelling protection accurately.
Travelers: Best Flexible Coverage and Customizing Options
No matter how similar your new property may seem to others, there are always little details making it unique. That is why the best option to go with would be Travelers, as they provide you with many additional coverages and customization options for your policy. Specifically, you can choose from a wide range of extra options, such as green home rebuilding, identity theft protection, and water back-ups. Travelers also offers you an interesting perk, known as “Decreasing Deductible,” when your company’s account receives special bonuses for each year you remained claim-free.
State Farm: Best Insurance Agents and Personal Guidance
If you prefer the old way of purchasing insurance, you should try working with one of the most trusted agencies in the country. Namely, State Farm offers a large selection of insurance agents to communicate and consult about your policy with. Since State Farm is the leader in terms of its market share in the country, they have a great number of offices and agents across the nation to help you personally. In addition, State Farm has rock-solid finances, and they offer great discounts on multi-policies.
USAA: Best Provider Overall (Exclusively for Military)
If you or your spouse served in any military branch, then USAA could definitely become your best option. This company leads customer surveys in terms of customer satisfaction and provides great claims support, while having the lowest average premiums among other providers. Notably, their standard policies are especially rich in coverage and include such perks as automatic replacement cost coverage for your personal belongings, meaning that you would not have to pay extra fees for this upgrade.
Important Coverages New Owners Must Know About
Now when we reviewed some of the best insurance providers, let us talk about the basic coverages everyone must have in their policies. They all differ in their specifics, which is why you should understand what they imply and include in your policy without any doubts.
Coverage A: Dwelling Coverage
This covers the rebuilding or repairing of the physical structure of your property in case of damage done by the listed perils. Such perils include hurricanes, hailstorms, wind storms, fire, or other catastrophic events leading to substantial damage. As a new owner, you should always make sure that this coverage includes sufficient amounts for local rebuilding costs.
Coverage B: Other Structures
These are your additional structures built separately from the main house. Usually, this type of coverage defaults to 10% of your total dwelling coverage limits.
Coverage C: Personal Property
Personal property coverage covers all your clothes, furniture, electronic devices, and other valuable belongings located inside the property. One of the biggest factors you should pay attention to is whether your company provides actual cash value or replacement cost value for your belongings. The latter one guarantees full compensation of the price needed to replace the items.
Coverage D: Loss of Use Coverage
In case you cannot use your house due to any disasters, loss of use coverage compensates your expenses related to renting another place, including hotels, food, etc., until your house becomes habitable again.
Coverage E: Personal Liability Coverage
In case something happens to people visiting your place or you damage the belongings of other people, this coverage will protect you and your assets from being involved in costly lawsuits and other related losses.
Effective Tips to Reduce Premiums
When you are already an owner of a house, you will have to spend lots of money on mortgage and escrow payments each month. To reduce the burden, consider the following tips that will allow you to save up on insurance costs.
Implement Prevention
Insurance companies appreciate proactive and preventative clients the most, which is why they provide many discount programs for installing smart home equipment in the house, such as smart water detection systems, hardwired smoke alarm, or even advanced security cameras. Moreover, insurers nowadays pay more attention to your roof, its age, and quality of shingles used. Buying a home with a newly installed roof can save you money greatly.
Set Up Effective Deductibles
Your monthly premium can be reduced drastically by increasing your deductible. By raising your deductible to $1,000 or $2,500, you will immediately reduce your insurance premium greatly. However, you should always have sufficient funds saved up to pay that deductible in case of unexpected issues.
Bundling Policies
One of the easiest methods to lower your home insurance costs is to bundle it with auto, boat, life, or any other insurance through the same provider. Doing so will give you up to 15% to 25% discount on all policies included in the plan.
Conclusion for New Homeowners
It is necessary to emphasize that obtaining great insurance is just the beginning and not something to be neglected. Make sure to ask for at least three different quotes and analyze them carefully to find the best option for you. Finally, contact at least two of the top national providers and compare coverages, as this may also reduce your premium.
FAQ
What Is the Difference Between Market Value and Replacement Cost?
Market value refers to the price that your property and land can be sold for in the current market. In contrast, replacement cost is the amount you will need to rebuild your entire house with current wages. Always make sure that your insurance coverage implies replacement cost of your property, not the market value.
Does My Policy Include Floods or Earthquakes?
Standard home insurance policies do not include any coverages regarding floods and earthquakes. If your house is located within an updated FEMA flood zone or nearby any fault lines, you will need to purchase special coverage for this via NFIP or a specialty provider.
What Are Methods Used by Insurers to Check House Condition?
Insurers today use modern technology like satellites to scan houses and their roofs before providing you with any kind of coverage. Additionally, some insurers send their employees or inspectors to visit the house shortly after purchase to make sure the structure of your property is in decent shape.
What Is Windstorm/Hurricane Deductible?
Some states located in areas vulnerable to wind and rain have separate deductibles in their insurance policies called Windstorm or Hurricane Deductibles. These are not dollar amount deductibles, but rather percentages of your total Dwelling Coverage (usually 1% to 5%).