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Homeowners Insurance 101: What You Need To Know

$320,000 is quite a bit of money. It is also the current cost of an average home in the United States, according to financial expert Dave Ramsey. With that being said, it’s safe to say you will want to protect such a large investment. Although, if you’re like many homebuyers, you have questions about homeowners insurance. Don’t worry, it’s a complicated matter for many people. Kirby Soar Insurance wants to help you understand it better with this helpful guide to homeowners insurance policies.

Kirby Soar Insurance Homeowners Insurance 101

What Should My Homeowners Insurance Policy Cover? 

Homeowners insurance policies differ based on your situation and needs. The most important things to ensure your home has coverage on are:

  1. Damage: Your insurance policy should cover smoke, wind, lightning, and/or hail damage to your home. You should also check to verify that this protection extends to other structures on your property such as your shed or detached garage. To ensure you have enough coverage for floods, double-check your coverage with your agent. 
  2. Personal Property: This protects your belongings, should they be stolen or damaged during a disaster that is covered under your plan. There are limits and extensions to these policies that change based on your preferences and pricing. If you have collectibles or high dollar items in your home you should consider adding more coverage to your policy.
  3. Liability: Simply put, liability coverage protects you if another person has an accident occur on your property. This includes someone being injured on your property, or your property causing damages to someone else’s personal property. For example, a tree branch falling on a friend’s car. 

Is Insurance Required for a Mortgage?

You are not required to have homeowners insurance when you purchase a home outright in cash. Although, it should still be a priority. However, no one can force you to purchase it. 

However, if you are like the majority of home buyers, your mortgage lender (Fanny Mae, Freddie Mac, FHA, USDA, the VA, and most banks) will require some type of homeowners insurance coverage. These companies require coverage because they’re lending you a large sum of money and assuming they might not get it back. Your insurance protects their investment until your mortgage is paid in full. It protects the property should the unexpected happen. 

Facts About Homeowners Insurance. 

  1. Coverage is up to your lender. You have to have enough insurance to replace/rebuild your entire home, if necessary. Think about how many natural disasters like hurricanes and tropical storms happen in Florida each year.
  2. Mortgage Lenders Require Coverage. We mean IMMEDIATE coverage. Mortgage lenders require buyers to have an insurance policy on the home at the time of closing. 
  3. You’ll Likely Need To Set Aside Money For One Year’s Coverage In Advance. This money is put into an escrow account. Over time, your payments will come out of this account. If your lender does not require an escrow account, you’ll need to set up payments yourself.
  4. You Can Switch Insurance Carriers In The Middle Of Your Coverage Period. When this happens and you have a prepaid escrow account, you’ll receive a check for any unused months. Don’t get too excited, you will need these funds to continue coverage with your next provider.

Homeowners Insurance in Florida

Buying a home is one of the most rewarding yet complicated and expensive endeavors you will experience. Don’t make it harder on yourself by searching for the best coverage and rates on homeowners insurance. Let the professionals at Kirby Soar Insurance help you with this process. We work with a wide array of major insurance companies to find the best value for your home insurance needs. Find out more by calling us at (813) 752-1680. We serve customers in Polk and Hillsborough County, FL. This includes cities such as Plant City, Valrico, Lakeland, Mango, Brandon, and Mulberry, FL.