June marks National Homeownership Month, a time to celebrate the excitement of owning your home and to acknowledge the responsibilities it brings. While owning a home is a significant milestone, it also comes with financial and insurance duties that are crucial for protecting your investment. In this post, we’ll cover three key insurance considerations that new homeowners should keep in mind.
Understand Escrow and Insurance Premiums
Many new homeowners might find the process of paying insurance premiums through an escrow account somewhat confusing. Generally, your lender manages this account and pays your insurance premiums on your behalf. This means that even if you receive a billing statement from your insurance provider, you don’t need to worry—your lender typically handles it. However, it’s always a good idea to double-check with your lender if you have any questions about payments to ensure everything is running smoothly.
Consider Additional Coverage
Standard homeowner policies provide a foundational level of protection, but they may not cover every risk. It’s essential to consider additional coverage options such as liability coverage, umbrella insurance, and flood insurance, which can offer more comprehensive protection. Notably, flood insurance is not included in most standard policies, so assess your area’s flood risk and consider adding this coverage if necessary to ensure all aspects of your home are protected.
Review Your Life Insurance Coverage
Buying a home often necessitates a reevaluation of your life insurance. If you’ve upsized, you might need more coverage to protect your mortgage in case of unforeseen events. Conversely, if you’ve downsized, you could potentially reduce your coverage and adjust your policy to better fit your new financial situation. Regularly reviewing your life insurance ensures it aligns with your current life stage and financial responsibilities.
Understanding your home insurance will help you safeguard your significant investment and secure your financial future. Consider reaching out to your insurance provider or a financial expert for a policy review or for personalized advice. Taking these steps will offer you peace of mind, knowing that you are well-protected on your journey as a homeowner.