Finding the right home insurance in the USA can seem like an insurmountable challenge if you’re not familiar with what you’re getting into, but it doesn’t have to be that way.
It’s a big decision, which is why knowing what you should know before buying home insurance in the USA is so important.
To help you on your journey, we put together this guide on ten things you need to know about finding and applying for home insurance in the USA, including how to get it and at what price points you can get it.
1) What type of home do I need to buy?
The type of home you buy will play a big role in how much home insurance you need. If you’re buying a house or condo, then your property could be insured under what’s called the four corners policy—or just four corners—which covers both you and your mortgage holder.
If you’re looking for more protection, look into purchasing an all-risk policy, which can cover virtually anything that might damage your home or personal belongings.
Some states have limits on how much coverage is available; others require certain types of homes (like mobile homes) to get additional coverage from private insurers.
2) How much does it cost?
Home insurance premiums are typically one of a homeowner’s biggest expenses, but don’t let sticker shock keep you from buying.
There are things you can do to lower your rates, including raising your deductible and making sure that all of your gadgets are properly insured (so you aren’t paying for two policies).
When comparing quotes, it might also be helpful to know that all insurers offer three different levels of coverage: liability only; limits up to $100,000; and full replacement.
And never just shop online—because the price isn’t always an indicator of quality.
3) Who do I buy it from?
When it comes to buying home insurance, you’ll have plenty of options and lots of decisions to make. There are multiple levels of coverage, varying deductibles and so many different companies and brokers that each offers their take on how it should be done.
Each type of policy is designed for a specific kind of property.
So before you choose an insurance company or get quotes from them, you need to decide what sort of property you’re insuring: do you have a condo, house, or apartment? What kind is it (single-family house/townhouse/duplex)? And how old is it?
4) Is there a checklist for my needs?
When you’re shopping for an insurance plan, do some comparison shopping. It’s a good idea to start by creating a list of your wants and needs and then compare what your potential policies can provide.
If there is anything that you absolutely must have, make sure that it’s covered by your policy. For example, let’s say you have a lot of expensive electronics and pricey jewelry.
5) Do I need contents cover as well?
Many people are covered for contents under their household insurance.
However, if you have valuables such as jewelry or high-value electronic items such as a television and video games console, it’s worth checking that your contents policy covers these separately.
If it doesn’t, they can be insured with a standalone policy. Premiums start from around £12 per month depending on how much coverage you want.
It is sometimes possible to add them to your home insurance at an extra cost.
6) Are buildings covered as standard?
In many countries, buildings are covered as a standard under home insurance. However, you must check your policy wording and consult with your insurer before buying a property.
In some states, buildings are not covered (and therefore must be insured) if they’re constructed on a separate piece of land from your main residence.
Certain US states such as Florida also force developers to purchase contents cover for new-build homes. If you’re moving across state lines or emigrating altogether and looking for home insurance in the USA, it might be worth thinking through all potential risks first before deciding whether or not building cover is right for you.
7) What are fire sprinklers?
Fire sprinklers are designed to detect small fires and bring them under control before they can spread. They’re most often found in commercial and residential buildings, but that doesn’t mean you don’t need them—they can also be found protecting some cabins and outbuildings.
Fire sprinklers work by releasing water when they sense a fire; heat causes an indicator liquid inside of them to boil, which in turn trips a switch that opens a valve at the top of each sprinkler head.
This releases water from beneath your roof into your attic or throughout your house. Sprinklers are activated by both high temperatures and smoke, so if one goes off chances are it isn’t alone.
8) Am I protected against extreme weather conditions?
Depending on where you live, extreme weather conditions can seriously damage your home and put your life at risk.
If a tornado or hurricane strikes and destroys your home, it’s possible that insurance won’t pay for everything, even if you have comprehensive coverage.
Not all policies cover losses from certain perils—like earthquakes or floods—or losses caused by war, terrorism, or nuclear accident.
While you might think you’re protected against these hazards, you must read your policy thoroughly so that when disaster strikes, you don’t face a huge bill.
9) How can I keep my premiums down?
One of your biggest concerns when it comes to insuring your home is likely keeping down those monthly premiums. It’s a big investment and protecting it against fire, flood, theft and other natural disasters is essential.
However, you can also do some things on your end to keep insurance costs as low as possible. For example, if you want to save money on homeowners insurance, make sure that you have adequate coverage for all of your belongings.
The more items that are covered by your policy, such as jewelry or electronics, the higher your premium will be.
When considering how much coverage to buy, think about what would happen if everything were lost in one fell swoop—would it financially ruin you? If so, consider buying more coverage than what’s required by law.
10) Do I need legal protection too?
In some states, some laws cover your personal property if it is damaged by fire or flood.
If you live in a state where these legal protections don’t exist, consider purchasing extra coverage from your insurance provider.
Otherwise, your best bet for additional legal protection is life insurance; most major carriers sell a policy that will pay out a lump sum for accidental death and dismemberment—something you don’t want to have to happen. (Although if it does, do note that many types of life insurance policies provide replacement value rather than actual cash value.)