June is National Homeownership Month, a time to celebrate the achievement and joy of owning your home. As thrilling as homeownership can be, it also introduces a new world of financial responsibilities, including understanding your insurance needs. To help you navigate this landscape, here are three crucial insurance tips that every new homeowner should consider adding to their checklist.
Review Your Life Insurance Coverage
Purchasing a home often means reassessing your financial landscape, including your life insurance coverage. For those who have upsized, a larger mortgage may necessitate an increase in your coverage to assure full protection. Conversely, if you've downsized, you might have the opportunity to reduce your coverage and realign your policy to suit your current financial setting. Regularly evaluating your life insurance ensures that your loved ones are protected and your mortgage is covered, no matter what the future holds.
Understand Escrow and Insurance Premiums
Many new homeowners pay their insurance premiums through an escrow account managed by their lender. This setup can simplify your finances, as your lender typically takes care of paying your insurance premiums directly. If you receive a bill from your insurance provider, rest assured that it is likely for your records, as the payment is handled via escrow. However, always double-check with your lender if you have any questions regarding payments to ensure everything is running smoothly.
Consider Additional Coverage
Standard homeowners policies might not cover all potential risks you face. It's wise to assess additional options like liability coverage, umbrella insurance, and flood insurance. For example, flood insurance is an essential add-on since it's generally not included in standard policies but could be crucial depending on your geographic risk. Reviewing these options ensures comprehensive protection for your home and reduces unexpected financial burdens from events not covered under a basic policy.
Understanding home insurance is vital for safeguarding your home and securing your financial future. As you celebrate this significant milestone during Homeownership Month, consider taking the next step by scheduling a policy review or consulting with a financial expert to tailor insurance solutions to your needs.