Buying your first home can be very exciting. However, there are a lot of things that you will need to do when you purchase your home. One of the things that you will have to do is make sure that you have the right insurance.
Below are three types of insurance that every homeowner should have.
Homeowners Insurance
If a disaster strikes, then you could potentially lose all of the possessions in your home. That is why homeowners insurance is so important. A basic homeowners insurance plan will cover the damages that are caused by fires and severe thunderstorm. Some policies will also cover hurricanes and tornado.
If someone were to suffer an injury while they were at your home, then they could potentially sue you if you do not have homeowners insurance. There are some policies that will even pay the cost of a person’s medical bills. Many people use the cost as an excuse not to get homeowners insurance. However, you really cannot afford to not have this type of insurance.
You want to make sure that you review your policy carefully because there are some things that are not covered by homeowners insurance. Earthquakes and floods are typically not covered in a homeowners insurance policy.
Income Protection Insurance
If you lose your job, the mortgage company will still expect the payments to be made on time. For that reason, income protection insurance is a must. This type of insurance pays you benefits in the event that you are unable to work because of an incapacitating illness or injury. The amount of money that you get each month can vary, depending on the type of policy that you select. You may be able to get up to 75 percent of your income replaced.
For example, you are making 3,000 dollars a month now. You can get up to 2,250 dollars a month if you have income protection insurance. It is a good idea to compare income protection quotes, regardless of whether you are an employee or a self-employed individual.
Life Insurance
If you died, then the sole responsibility of paying your mortgage and other bills could be placed on your family. This could be a major financial burden, which is why it is always important to be prepared for the unexpected. Life insurance will pay your family members benefits after you die.
Most experts believe that you should get 10 times your yearly income in life insurance coverage. For example, if you are making 40,000 dollars a year, then your minimum life insurance coverage should be 400,000 dollars .