Tips for Navigating Your Insurance Policy as a First-Time Home Buyer in Georgia 

There are many factors to consider when buying your first home, such as finding the perfect home in a picturesque Atlanta neighborhood for the best price. Location and budget are important considerations, but finding the right first-time home buyer’s insurance is also critical.  

The Excitement and Responsibility of Your First Home Purchase 

You’ve finally found that perfect dream home, and as a first-time home buyer, there is a lot to consider! Keep reading to find ways to make sure you don’t miss a step – including that all-important homeowners insurance. 

Anyone who takes out a mortgage on their home in Georgia must purchase a homeowners insurance policy. Always remember that a lender can turn down a request for financing if you do not obtain sufficient insurance coverage.  

Getting homeowners insurance is in your best interest because it protects you from situations out of your control, such as vandalism, accidents, or natural disasters common in Georgia, like hurricanes and tornadoes. It may not help protect against your new (and very nosy) neighbor, but there are fences for that, right? 

What Should You Consider When Shopping for Insurance in Georgia as a First-Time Home Buyer? 

There are so many complicated phrases in your home insurance policy. Who can understand it all? We get it – this is all new to you, so let’s take a look at some of those terms and what they mean. 

As a first-time buyer, the first thing to note is what your new homeowners insurance policy covers. A standard policy covers the following:  

• Dwelling: Dwelling coverage is the amount it will cost to replace your home in the event of a total loss. Keep in mind this is not how much you paid for your new home: That’s the market value, and it is typically higher than the dwelling coverage. 

• Personal belongings: Personal belongings coverage helps replace or repair damaged or lost personal belongings caused by a covered claim, like that top-of-the-line sound system – we see you home theater buffs.  

• Liability insurance: Liability insurance helps pay for medical expenses and property damage caused by members of your household towards others or when Aunt Gloria slips on Junior’s toys left on the stairs. She may not want to sue, but her insurance company will. 

• Medical payments to others: These payments help cover the medical expenses of guests harmed on your property.  

• Additional living expenses:  If your home cannot be lived in, you and your family won’t have to couch surf with friends. Your policy will pay you to live somewhere while your home is repaired.  

While your standard policy covers much of the above listed, you must remember that each type of coverage has a limit. Your home insurance policy guide will cover all the details about coverages. Ask your insurance company what the maximum limits are for each type of coverage. Also, ask how to increase those limits to fit your needs.  

Essential Insurance Terminology for First-Time Home Buyers 

Why do these documents have to be so hard to read and understand? It’s almost like trying to understand Cousin Joe’s recipe for barbeque sauce he wrote when he was having too much fun at the family picnic! Don’t worry, though, because we will break it down for you in easy-to-understand terms. 

Here are some essential terms to understand before you sign on the dotted line:  

• Premium: the amount you pay for your insurance policy. Usually, you make monthly or yearly payments.  

• Deductible: The amount you pay out-of-pocket when you file a claim.  

• Replacement Cost: The cost of rebuilding your home or repairing damages using materials similar to those used before.  

• Actual Cash Value: The value of your home, considering age and wear and tear. Actual Cash Value pays for your loss but does not pay to repair or replace your property entirely.  

• Market Value: The value of your home, plus the price of your land, depending on the real estate market.  

• Endorsement: An addition to your policy that modifies the coverage. Endorsements can add or exclude certain types of coverage.  

• Exclusion: The exclusions page will list what is not included in your policy.  

• Special Limits: This section lists what is covered and for how much. 

How Much Coverage Should You Get for Your Homeowner’s Insurance? 

Now for the big question: How much home insurance do you really need? If something happens, you’ll want enough to repair or replace your home sweet home. But it is a little more complicated than that. 

Somewhere in the fine print of your policy, you will find the 80% clause. If you do not insure your home for at least 80% of the replacement cost, your insurer may not pay out the full amount of your claim. Here’s an example: 

• Your home will cost $300,000 to rebuild in the event of a total loss, down to the front porch, where you enjoy drinking sweet tea with the neighbors. 

• Your policy’s dwelling coverage amount must be 80% of that number or $240,000. 

Keep in mind that if you make improvements, such as screening in that fine front porch, you may need to increase the amount of your policy to stay in compliance with the 80% standard. 

Note that replacement value and market value are not the same. Your Georgia home insurance agent is the perfect person to help you find the right amount of coverage. Plus now you know the importance of understanding exactly what your home insurance covers.  

Does a Standard Homeowners Insurance Policy Cover Everything?  

Well, if you mean does your home insurance policy cover you when little Joey throws a nice fast ball through the neighbor’s window, the answer is yes. If you are wondering if your home policy covers that smallish rodent problem you have, the answer is probably not. 

That’s because no standard homeowners insurance policy will cover every situation. Common exclusions include: 

• Floods 

• Earthquakes 

• Windstorms and hail (primarily in coastal areas such as Brunswick, St. Marys, and St. Simons Island) 

• Damage caused by mold, sewer or drain backups, or sump pump overflows (and rodents!) 

There are many myths about what insurance covers and doesn’t cover. You can modify the basic policy to address specific risks that are not included. Your insurance agent can help you know what types of coverage are ideal for your location in Georgia. 

Assessing Your Deductible: Finding the Sweet Spot 

When shopping for insurance as a first-time home buyer, pay attention to your deductible, which is the portion of the claim you are responsible for paying. This is the part that comes out of your own pocket. We want to save that cash, right?  

Choosing the right deductible is key—you need one you can afford if you file a claim. A higher deductible lowers your premium, so ask your insurance agent to compare options and find the best balance for your budget. 

Why Is It Important to Know Replacement Cost vs. Actual Cash Value When Choosing Insurance? 

Knowing the difference between replacement cost and actual cash value helps you choose the right insurance policy to ensure adequate coverage. Replacement cost pays to rebuild at current prices, while actual cash value accounts for depreciation, offering lower premiums but less coverage. 

How Can You Get the Best Deal? 

Shopping around is the most effective way to find the best deal. Different insurance companies charge different rates for the same amount of coverage, and not all companies offer the same levels of coverage. Do your wallet a favor and check with several companies before you choose one.  

You can find insurance companies and agents in your area by searching the internet. Asking friends or family for recommendations is a good way to find vetted insurance help. While searching for a number to call, look up the Georgia Office of Insurance and Safety Fire Commissioner website for premium comparison guides.  

How Can You Get a Discount on Your Homeowners Insurance? 

Make sure you ask your insurance agent if you qualify for any discounts. Upgrades like storm shutters, new roofing, or updated plumbing can lower costs. Security features like burglar alarms, smoke detectors, and deadbolt locks may also qualify. Depending on where you live, installing a generator can also get you a discount on your policy.  

The Benefits of Bundling Insurance Policies 

If you already have auto insurance and are now buying Georgia home insurance, you can simplify and save money by bundling your insurance policies. Bundling your policies means you deal with one insurance company for both policies. You won’t have to juggle multiple monthly bills, and most companies offer discounts when you bundle their policies. We all love a bit more simplicity in our lives, right?  

Bundling your policies can also mean you have more control over tailoring the coverage you need. You can adjust coverages to complement each other without overlaps or gaps. A more customized approach means you can be fully protected without paying unnecessary fees.  

Save on First-Time Home Buyer’s Insurance 

Are you ready to purchase your first home? Protect your new home from unexpected risks with Velox Insurance. Your agent at Velox Insurance can answer all your questions and help you find affordable coverage for your first home insurance policy. Get a quick quote online, call us at 855-468-3569, or find a location in Georgia to speak with an agent in person.