What Every First-Time Buyer Should Know About Homeowners Insurance

Limor Matalon
Sep 4, 2025
2 min read

Buying your first home is exciting — but it also comes with new responsibilities. One of the most important is homeowners insurance. Lenders require it, but even if you’re paying cash, protecting your biggest investment just makes sense. If you’re a first-time buyer, here’s what you need to know before signing your policy.

What Homeowners Insurance Covers

A standard policy typically includes:

Dwelling Coverage – Protects the structure of your home against risks like fire, storms, or vandalism.
Personal Property Coverage – Covers your belongings (furniture, clothing, electronics) if they’re stolen or damaged.
Liability Protection – Protects you if someone is injured on your property and decides to sue.
Additional Living Expenses (ALE) – Pays for temporary housing if your home becomes unlivable after a covered event.

What’s Not Always Covered

It’s important to know that certain risks may not be included in a standard policy, such as:

Floods
Earthquakes
Sewer backups

If you live in an area prone to these, you may need additional policies or riders.

How Much Does It Cost?

The cost depends on factors like:

Location and risk level (flood zones, crime rates, natural disasters).
Size, age, and condition of the home.
Your credit score and claims history.
The amount of coverage you choose and your deductible.

On average, homeowners insurance costs $1,000–$2,000 per year, but this varies widely.

Tips for First-Time Buyers

Shop Around – Get quotes from multiple insurers to compare coverage and price.
Bundle Policies – Combine with auto or other insurance for discounts.
Raise Your Deductible – A higher deductible lowers your premium (just be sure you can afford it if needed).
Ask About Discounts – Security systems, new roofs, or smoke detectors may lower costs.
Review Annually – As your home value and possessions change, update your coverage.

Final Thoughts

Homeowners insurance isn’t just another box to check — it’s peace of mind. By understanding what’s covered (and what isn’t), how much you need, and ways to save, you’ll protect your home and your financial future.