When you buy your first home, the last thing you want to worry about is your first home insurance. You are in love with your home, and nothing is going to go wrong. Unfortunately, this is not the case, and most lenders require you to be in possession of homeowner’s insurance before closing on the house. It is confusing when you are trying to figure out where to start. It is always a good idea to look to the company that offers you car insurance. Many times, they will offer a discount for having multiple open policies with them. Another good idea is to ask friends and family for recommendations to reputable companies. It is easier to have a general idea where to start than to just open the phone book and start dialing.

Homeowner’s insurance can protect your home from a variety of disasters. There are eight different types of homeowner’s insurance available, and it is important to make sure that the insurance you hold covers what is important to you. Type 1 covers only the property that is specifically stated in your insurance policy, such as expensive art or jewelry. Type 2 works similarly to Type 1, but instead it covers only specific portions of a home. This type of insurance is called a peril policy and is usually used to protect a part of the home in the occasion of a particular type of damage, such as wind damage. Type 3 is the insurance that is most common for homeowners to hold. This insurance covers the home and the belongings on the inside.

This type of insurance also carries liability insurance in case somebody is injured while on your property. Type 4 is renter’s insurance, and it covers just the contents of the home or apartment. Type 5 insurance is very similar to Type 2, however, more threats on the home are covered. Type 6 is for individuals who own condos. Type 7 is for individuals who own mobile homes. Type 8 provides coverage for those who own older homes. This type of insurance is beneficial for these homeowners because many times the replacement cost on an older home is higher than the market value for the same home. This type of insurance policy allows premiums to reflect the lower market value.

Lenders usually opt to have you pay your homeowner’s insurance monthly along with your mortgage payment. This money is kept aside from your mortgage and is placed in a separate escrow account. While a homeowner’s monthly payment is higher, this is usually beneficial to them since they do not have to come up with that large lump sum once a year.

For first time homebuyers, the market of homeowner’s insurance can be a confusing and scary one. With enough research and comparison shopping, you will be able to find an insurance policy that fits your needs as well as your wallet. Knowing what types of insurance are available can help when it comes time to pick your first home insurance policy.