Buying your first home is one of the most exciting and overwhelming events you’ll ever experience, and it starts well before you sign on the dotted line.
From saving up your deposit, to deciding on whether you’ll build a new home or buy an existing one, there’s heaps to do prior to your settlement date.
One of the most important things to get in order early on is your home insurance. More than just protecting your most valuable asset, the right home insurance policy can also help you sleep at night.
If you’re in the market for your first home, wrap your head around home insurance first with this quick and simple guide.
An easy way to think of home and contents insurance is that home insurance (also known as building insurance) protects the bricks and mortar, while contents insurance protects all the things inside that make it a home.
In particular, home insurance is designed to protect your home against damages to the house itself, and may also provide liability coverage in the event of an accident in the home or on the property. If you are taking out finance for your home, most lenders will require that you have home insurance effective the date that you sign the contract to take ownership of the house (more on this later).
Contents insurance protects against theft, damage or loss of your possessions resulting from a range of insured events. Although contents insurance is not essential, it’s a smart thing to have in the event of a burglary or fire, or just for peace of mind. It could also come in handy while you’re moving into your new home. Some content insurance policies even offer a level of cover for your contents if they’re lost or damaged due to a motor accident or fire whilst in the truck of a professional removalist.
Often insurers will bundle home and contents together for you, for total peace of mind.
Although you might think to start your home insurance policy on settlement day, this could put you in a dangerous situation. Home insurance should actually be effective from the date you sign the contract for the house. At this time, you take a legal interest in the property and should protect it accordingly. There is every chance that the current vendor of the property does not have adequate insurance, or cancels their insurance during the settlement period. In either of these situations, your house would not be covered in the event of a fire, flood or other damage, unless you have taken out home insurance as the owner of the property.
If you don’t have any home insurance in place by the date that you sign the contract for the house, you may be obliged by your lender to take out a tentative policy of their choice, until you are able to provide them with details of your chosen insurer. This could result in you having to pay more than you would if you had shopped around for home insurance quotes beforehand.
Your best bet is to look into home insurance the moment you consider making an offer on a property. That way, once your offer is accepted, you’ll be able to organise your own policy quickly and avoid paying a higher premium than you need to.
When you’re obtaining home insurance quotes, you’ll need to provide your potential insurer with accurate information about your new home. Any incorrect details could have consequences down the road when it comes time to make a claim, and they could also result in a higher premium than you should be paying.
Here are some of the common questions most insurers ask that you should be prepared for. If you don’t know all the answers, ask your real estate agent or solicitor to find out on your behalf.
Remember, buying your first home should be a wonderful experience. Make it easy on yourself by putting all your ducks in a row well before you start packing. And when you do find the home of your dreams, start a quote with us to see how much we could save you on your first ever home insurance policy.