Selecting the right home insurance policy can save you significant expenses in the future.
Key takeaways:
- Purchasing the right home insurance policy is essential
- Newly built homes could be eligible for new home insurance
- These policies tend to cost less
- Your new home coverage should offer liability protection
Choosing the right home insurance coverage to meet your needs is vital. After all, your home is likely your most valuable asset, so protecting it from damage should be a no-brainer. Many mortgage providers agree and won’t approve your loan request until you have a policy.
The need for insurance extends to newly built homes, as well. Even though these homes are less likely to experience significant structural issues, you’ll still need insurance to safeguard this valuable asset.
There’s different insurance available for new builds, too. Your brand-new house could be eligible for new home insurance, which typically costs less than regular coverage because the property is less likely to incur damage than an older residence.
However, there’s no difference between a new home and an old home regarding liability and the risk of injury. In fact, your new house could be more dangerous because you might be more willing to invite visitors over to show it off.
As a result, choosing a policy that covers personal liability, medical payments, and property damage is usually a good idea. Here’s some information on how new home insurance protects against liability, along with tips for selecting the ideal policy for your situation.
New home insurance coverage options
As you shop for the right home insurance policy, you’ll discover multiple options and add-ons that protect against liability. Three of the most common types to consider with a new build are personal liability, medical payments coverage, and property damage. Your standard home insurance policy might include some liability coverage, but the amount it covers might not be enough.
Personal liability insurance offers coverage if someone is injured while visiting your home and decides to sue you. It could be a friend or a delivery driver who slips on your driveway – the sad fact is, anyone entering the property has the potential to come after you. Personal liability insurance covers legal payouts and bills, so it could save you from a significant financial burden.
Another type of liability coverage you might consider is medical payments coverage. This insurance pays the medical bills for anyone injured on your property, minimizing out-of-pocket expenses. So, if a visitor ends up in the ER after tripping over a stone on your new walkway, you won’t have to worry about paying the hospital bill.
You can also opt for a policy that would cover damage to other houses if, for example, a tree branch falls from your yard on the neighbor’s roof or your kids break a window when playing baseball. You never know when this type of accident might happen, so having some protection is a good idea.
Understanding your liability insurance options puts you in a better position when selecting a policy. You can also adjust your coverage based on your risks.
Factors influencing new home insurance liability coverage
New home insurance typically costs less than insurance for older houses because new builds are more structurally sound, and there’s less risk of significant damage due to wear. However, the amount you’ll ultimately pay depends on some details.
For starters, your property’s location influences your liability premiums. You could be more likely to have issues if you live in an area that commonly experiences natural disasters, heavy snowfall, or significant annual rainfall. Your insurance company will adjust your premiums based on those risks.
Your insurance company will also consider the type of property you own. A large house with a yard and a pool presents a greater risk for liability claims than a condo unit, so it’s also likely to come with higher insurance premiums, as well.
The coverage limits you choose will also influence your annual home insurance premiums. You’ll pay more for a policy with $5,000,000 in liability coverage than a policy offering $2,000,000 in coverage, but you’ll also have better protection.
The deductibles you select impact your rates, too, because a higher deductible means you share more risk with your insurance provider. Lower deductibles typically mean higher rates because the insurer is taking on more risk.
Learning the factors that influence your new home insurance premiums can help you make better decisions as you search for a policy. The more information you have, the easier your choice becomes.
Choosing the right new home insurance liability policy
Once you understand the factors that go into your new home insurance policy, it’s time to make a decision. You’ll begin by assessing your personal risk and determining how much you stand to lose if someone incurs an injury on your property or you’re responsible for damage to a neighboring home. Risk factors can also include how often you entertain guests, how many people you invite to your home, and any dangerous terrain you have on the property.
From there, you can begin evaluating your coverage needs. At least a minimal amount of personal liability insurance is recommended, and some home insurance policies include base coverage. However, topping your policy up might be worth it, depending on your level of risk.
Finally, you can compare coverage options before selecting the best policy for you and your family. Finding the ideal coverage is far easier if you thoroughly understand new home insurance and liability because those factors can heavily influence your expenses.
Get the insurance you need
Having adequate insurance can protect you from a wide variety of risks – including many you’ve probably never thought of. This, in turn, offers peace of mind whether you frequently entertain guests or your only visitor is the pizza delivery guy.
No matter your insurance needs, NICRIS can help. Our team can review your situation and options, making sure you find the perfect policy for your new build home. Contact NICRIS today for more information or to get a quote.