Buying a house is a major investment, and as a homebuyer, it's important to do everything you can to protect the investment you make in your property. Homeowners insurance is one of the biggest keys to protecting your investment, and most lenders require you to purchase insurance if you have a mortgage. Even without a mortgage, insurance is important for every homeowner. Our REALTORS® are here to help you protect your home, with our guide to making sense of homeowners insurance.

Home Insurance 101

• Why Mortgage Lenders Require Homeowners Insurance
  Whether you're shopping for Beavercreek homes for sale or homes in another location, your mortgage lender is likely to require you to purchase homeowners insurance. Lenders require insurance because it protects their investment in your home. If something goes wrong with the property, the lender wants to know any costs will be covered. With the right insurance policy, you'll be able to cover repairs of the most common issues that can damage your home. In addition to covering damage to the home itself, many home insurance policies provide coverage to repair or replace personal belongings in the home.

• How Insurance Costs Are Calculated
  Just as with other types of insurance, homeowners insurance costs depend on the level of coverage that you choose, along with the current condition of the home. Higher coverage limits and lower deductibles will lead to higher monthly premiums. If there are risks in your area not covered by a standard insurance policy, then you may have to pay extra for supplemental insurance to cover them.

• Choosing the Right Level of Homeowners Insurance
  The right level of insurance depends on your property, the requirements of your lender, and your personal tolerance for risk. By choosing a higher deductible or lower coverage limits you can lower your premium costs but will have to pay more if you need to make a claim. Ideally, you want to insure the property to cover the rebuilding cost of the home, rather than the purchase price. By insuring for the rebuilding cost, you can make sure you'll have enough for repairs if the home is seriously damaged.

• Actual Cash Value vs. Replacement Cost
  When insuring a home, you'll want to make sure to know the difference between actual cash value (ACV) and replacement cost. ACV factors in depreciation, which means a claim may pay significantly less than the cost of the items that you need to replace. Replacement cost compensates you for the full value of replacing or repairing lost items. Choosing ACV may lower the cost of insurance, but you'll be left to pay the difference if you need to replace something in the home.

• Problems That Homeowners Insurance Doesn't Cover
  While homeowners insurance covers many potential risks, there are some perils that no homeowners insurance policy will cover. These include floods, landslides, earthquakes, mold, infestations, and government actions. Make sure you understand exactly what risks and perils are covered by your policy.

• Other Insurance Products to Protect Your Investment
  If you live in an area with a high risk of flooding, earthquakes, or windstorms, then you may wish to consider supplemental coverage to protect from these risks. You can purchase coverage for these risks separately from your main insurance policy, and your insurer can help you choose the right supplemental coverage for your needs.

Whether you're a first-time homebuyer or an experienced shopper, our team is here to help you find the right property for your needs. Contact Wright-Patt Realty to buy and sell homes throughout the Beavercreek, OH area.