Buying a home is a huge investment, likely the biggest you will ever make, and it’s important that you protect that investment with the right insurance. There are comprehensive home owners insurance policies that cover all the basics, but depending on where you live you may need additional riders.
A Rider is a term that refers to an add-on insurance policy. Most whole-home insurance policies don’t protect against things like natural disasters. If you live in an area that is prone to flooding, you’ll definitely need to buy a rider to cover that threat.
Just like auto insurance or life insurance, it’s not wise to go with the first name in the phone book. It’s important that you do your research and compare prices to ensure you get everything you need within your budget. The other option is to find an insurance broker and let them do the leg work for you.
Broker Versus Agent
An insurance agent and an insurance broker are not the same thing. An agent works for a specific insurance company and can only offer you what they company has to sell. It’s an agents job to get you to buy their products, so they can be very sales oriented and even pushy. A broker doesn’t work for an insurance agency, they work for you. They look at all the insurance agencies and what they have to offer, and then help you decide what the best policy is for you and your budget. Brokers can be a priceless tool and one that you can use again, and again, as your needs change over time.
If you financed your home, you need homeowners insurance. Insurance will protect the money lenders investment in you, and your investment in your home. If you already have auto insurance with a specific company, that same company may offer you a better deal on a home insurance policy for bundling their products together.