Asked by Michael  |  Submitted September 03, 2013

Do we need to buy anything more than Homeowners Insurance?

My wife and I bought our first house and now that we've gone through the closing, do we need anything in addition to the Homeowners insurance we were required to purchase? Are there other things we should be considering?

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  Answers  |  5

September 04, 2013

This simple question could lead to a fairly complex answer depending on your needs. As far as the home insurance - you should be fine. To keep it simple, you'll want to consider your net worth and what you need to protect.

For personal insurance, it's best to consider your risk exposures. Generally, it's auto insurance, life insurance, home insurance and an umbrella policy. Risk only what you can afford to lose.

The most common mistake people make is not carrying the same liability limits for their auto and home insurance. They will carry state minimum liability limits on their autos and a different limit on their home. If your net worth or future projected net worth is considered - you'll want the same level of protection. Otherwise, it's kind of like building a mote around a castle and only have it go only around two thirds of the castle. Trying to predict where a lawsuit or loss would arise would be foolish.

It's generally, best to package your auto and home insurance as you'll generally get the best coverage with things like common cause deductibles and the best prices. It can close a lot of gaps too.

Carrying higher limits not only offers you better protection - it can get you better rates too. As it can put you in a better rating tier.

The best tip is using an experienced agent and getting their advice doesn't cost anymore and saves a ton of time.

$commenter.renderDisplayableName() | 02.27.17 @ 00:12

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January 26, 2015

Yes, an umbrella policy and permanent life insurance on each of you based on the value of your home, not the mortgage, as people almost always refinance or move.

$commenter.renderDisplayableName() | 02.27.17 @ 00:12

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March 03, 2015

If you would like to make sure you pay off the mortgage so that your family can stay in the house rather then be obligated with a financial burden, then yes. Life insurance helps keep your family from having to sell your house after you're gone, and keeps them in their home

$commenter.renderDisplayableName() | 02.27.17 @ 00:12

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August 17, 2015

If you have minimal equity (put a small percentage down) I would say you don't need an umbrella policy - make sure your auto coverage limits are high enough to pay someone who survives (sounds horrible but true) find an agent you can speak with who will show up when you have a claim. What can you afford? Have main wage earner get life insurance from your job it could cost pennies but be helpful if that person dies

$commenter.renderDisplayableName() | 02.27.17 @ 00:12

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February 22, 2016

I'm very late to the game as far as providing an answer to this question, but I want to make sure you understand the distinction between Homeowner's Insurance and Mortgage Protection insurance, as a lot of people are confused and think they are one in the same.

The simplest explanation is this: Most homeowners insurance policies will cover structural and personal property damage caused by such perils as fire, windstorms, hail, lightning, theft or vandalism., as well as a personal bodily injury liability component. There are other homeowners policies that cover additional perils as well. Typically, floods and earthquakes are excluded unless you purchase insurance against them separately.

Mortgage protection insurance is a life insurance policy that typically covers your mortgage if you lose your job or become disabled, or it pays off your mortgage when you die. Payouts are paid directly to the beneficiary, and then can be spent on whatever the beneficiary deems best.

Make sure to consult a qualified expert in your area.

Mike Zaino
www.TZGFinancial.com

$commenter.renderDisplayableName() | 02.27.17 @ 00:12

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