Buying Home Insurance – Money-Saving Tips for First-Time Home Buyers

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Buying Home Insurance – Money-Saving Tips for First-Time Home Buyers

Get free insurance advice on demand!

Buying your first home can be very exciting. It is one of the biggest life decisions, apart from getting married and having children. You save up for years and then make a huge investment. Your time and effort goes into making this space truly a home and that is what makes the house so special. A precious investment such as this should be protected from theft, vandalism, windstorms, fire, and other disasters. 

A 2019 survey found out that the average home insurance cost is around $1,083 nationwide. Typically, you can get coverage starting from $600 and going all the way up to $2,000. The higher the premium, the more benefits you will get. A standard home insurance policy covers the following things:

  • Windstorms and hail
  • Theft
  • Civil riots and commotion
  • Mischief
  • Fire and lightning
  • Explosions
  • Smoke
  • Aircraft
  • Vehicles
  • Vandalism and malicious mischief
  • Volcanic eruptions

Did you notice that the words “personal belongings” are missing from the list? Well, the HO1 policy covers incidents and accidents both natural and man-made. If you want to add personal belongings and liability this policy, you will have to pay a higher premium.

It’s possible that you might get a discount, but as a first-time home buyer, the chances are low. Discounts are usually for loyal customers or those who buy multiple policies from the same insurance agency. Then there’s the no-claims discount, which you get after a year or two in which you have made no claims.


What Raises the Home Insurance Policy’s Cost?


There are a couple of reasons why you might end up paying a high premium for your first home insurance policy.

  • Previously, you had renter’s insurance. You made a couple of claims, based on this policy. Now that you are buying a home insurance policy, the company will look into your insurance history to find out how frequently you make claims. The more the number of claims, the higher the premium will be. Moreover, you will no longer be eligible for the no-claims discount
  • When buying multiple polices, try to take your business to one insurer. If you look at each policy individually, you will find the cost is too high. This is because your car insurance is handled by one carrier and home insurance by another. As mentioned earlier, buying multiple policies from one company gives you the advantage of getting a group discount on the entire package
  • Missing payments or taking too long to make the payment
  • Asking for more time beyond the grace period
  • Having a house in a neighborhood where claims are made frequently
  • If your house has been installed with special features or expensive materials are used in its construction

For more information about factors that can raise your home insurance rates check out our – Why Did My Insurance Company Raise My Home Insurance Rates?


4 Tips on How to Save Money as a First-Time Home Insurance buyer


What Is In It for Me?

Now that you know the reasons behind the raised cost, let’s have a look at the following tips for saving on your first home insurance policy:


Tip #1

Don’t Put the Insurance Policy Purchase at the Bottom of the List

Most people get carried away with their home’s pre-approval letter, mortgage, home inspection, repairs, and negotiations that they forget about buying home insurance. When you do realize your mistake, you are in a rush and want to purchase the policy as soon as possible. In your haste, you make rash decisions and end up buying an insurance plan that does not suit your needs. 

One thing that most homeowners don’t take into consideration when they are buying home insurance is the home’s value. This is why they are taken by surprise when an insurance agent quotes the policy’s cost. The coverage is usually based on the dwelling and building value. In the long-term, your insurance policy might protect your building but not the garage because you didn’t read the fine print. This will cost you more because any repairs outside the actual building will be paid out of your pocket.

Note: Your move will increase your car insurance costs because the cost of this policy depends upon the commute distance.


Tip #2

Get Your Home Insurance Policy from an Insurance Agent

A mortgage lender can help you get a home insurance policy, and their rates vary with their clients. For example; if you are 30 years old and have great health, then the rate will be substantially less for you. Moreover, the insurance policy will be tailored to your needs.


Tip #3

Do Get the Home Inspection Done

New homeowners who waive off the home inspection get a discount on the price of the house. While this may save you from spending more money in the beginning, it will cost you a lot more in the future. Let’s assume that you bought a house without a getting a home inspection. You buy the home insurance policy and make a claim within six months. There goes your no-claim discount. Moreover, the more claims you make, the higher the premium will go on its renewal. A home inspector will help you identify the high risk areas so that you can repair them and use them as leverage to get not good but great coverage.


Tip #4

Establish an Insurance History

There are two ways to establish your insurance history, and they are explained as follows:

  1. If you previously lived with your parents and your name was on the insurance policy, you can use it to make a connection. Ask your insurance agent to look into your parent’s home insurance policy and draft a contract for you based on that. Plus, if you buy an insurance policy from the same firm, you might get a referral or loyalty discount
  2. Purchase renter’s insurance

And this is how you get discounts on your home insurance policy as a first-time home buyer. Don’t forget to have the home inspection and have a chat with your insurance agent about your needs. One thing to keep in mind here is that don’t expect to pay the same insurance cost as the previous owners. The cost of your home insurance is based on your age, health, personal choices, credit rating and profession. So answer clearly when your agent asks you about your personal details as it will help him tailor a policy that works for you well.

Visit Pawson now to talk to a professional and qualified agent. The company offers various forms of insurance policies, which include whole life insurance, home insurance, personal accident insurance, renter’s insurance, car insurance and more. To know about the rest of their policies, contact them at 203-481-8898.

Speak with a Pawson agent for free and get Connecticut-specific insurance advice on demand.

Speak with a Pawson agent for free and get Connecticut-specific insurance advice on demand.

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 Informational statements regarding insurance coverage are for general description purposes only. These statements do not amend, modify or supplement any insurance policy. Consult the actual policy or your agent for details regarding terms, conditions, coverage, exclusions, products, services and programs which may be available to you. Your eligibility for particular products and services is subject to the final determination of underwriting qualifications and acceptance by the insurance underwriting company providing such products or services. Statements on this website as to policies and coverages provide general information only. This information is not an offer to sell insurance.