Buying your first home is one of the biggest financial steps you’ll ever take. It’s exciting, nerve-wracking, and full of firsts; from mortgage approvals to walkthroughs to inspection day. And right in the middle of it all? Homeowners insurance.
If you’re a first-time home buyer, you might not realize how important the right insurance policy is, or how much it can impact your closing, your monthly mortgage, and your long-term financial protection.
At Crain Insurance Group, we work with new homeowners every day. Whether you’re weeks away from closing or just getting started, here’s what you need to know to make smart, confident insurance choices.
You’ll Need Insurance Before You Get the Keys
Let’s start with timing.
Homeowners insurance is required before you can close. If you’re getting a mortgage, your lender will require proof of insurance to protect their investment, and yours. This is known as a “binder” or declarations page and shows that your policy is active and paid (or set up in escrow).
Pro Tip: Start shopping for coverage at least 2–3 weeks before closing. This gives you time to compare quotes, choose the right deductible, and resolve any issues that could delay funding.
Understand What Home Insurance Actually Covers
A standard homeowner’s policy is designed to protect you in three major areas:
1. Dwelling Coverage
This protects the structure of your home: walls, roof, foundation, built-in appliances, and attached structures (like a garage or deck).
You’ll want to insure your home for its full replacement cost, not market value. That’s how much it would cost to rebuild your home from the ground up after a total loss.
2. Personal Property
This covers your belongings: furniture, electronics, clothing, appliances. If they’re damaged by a covered loss like a fire, theft, or storm.
Tip: Take a home inventory as you move in. It makes future claims easier and helps you know if you need more coverage.
3. Liability Protection
If someone is injured on your property, or you accidentally damage someone else’s property, this coverage helps pay for legal fees, medical bills, and settlements.
It also follows you away from home in some cases, like if your dog bites someone at a park.
Know What’s Not Covered
One of the biggest surprises for new homeowners? Not everything is automatically covered.
Here are a few things a standard policy typically excludes:
- Flood damage (you’ll need separate flood insurance)
- Earthquakes (coverage available via endorsement or separate policy)
- Sewer or sump pump backup (can be added as an endorsement)
- Wear and tear/maintenance issues (insurance isn’t a maintenance plan)
- Home-based business equipment or liability
That’s why it’s important to review your policy carefully and consider endorsements for added protection.
Understand Deductibles and Premiums
Your deductible is the amount you pay out of pocket before your insurance kicks in for a claim. A higher deductible means lower monthly premiums, but more cost if you ever need to file.
Common deductibles range from $1,000 to $2,500, though some policies use percentage-based deductibles for hurricanes, wind, or hail (e.g., 1% of your home’s insured value).
Example: If your home is insured for $300,000 and you have a 2% wind deductible, that’s a $6,000 out-of-pocket cost before coverage applies.
Balance affordability with what you could comfortably pay in an emergency.
Shop Around, But Don’t Just Chase the Lowest Price
First-time buyers are often tempted to choose the cheapest policy possible, but coverage and service matter.
A low premium might mean:
- Lower liability limits
- Higher deductibles
- Gaps in coverage (like no water backup or personal property replacement cost)
- A carrier with poor claims service
At Crain Insurance Group, we help first-time buyers compare more than just price. We look at what matters: total protection, reputation, financial stability, and how policies respond when you need them.
Bundle to Save (But Compare Wisely)
Most insurance carriers offer discounts when you bundle home and auto insurance. These multi-policy discounts can save 10–25%, depending on the carrier.
But not all bundles are equal. Sometimes, bundling leads to:
- A strong home policy paired with a weak auto one
- Less competitive pricing on one policy
- Service compromises
We always compare both bundled and unbundled options to make sure you get value without sacrificing protection.
Don’t Forget Personal Liability Limits
Liability protection is one of the most important parts of your homeowner’s policy, and it’s often underestimated.
Standard policies come with $100,000 to $300,000 in liability coverage. But if someone is seriously injured on your property, or you’re sued for negligence, medical and legal costs can go far beyond that.
We recommend increasing your liability limits or considering an umbrella policy for added peace of mind, especially if you:
- Have pets
- Own a pool or trampoline
- Host guests regularly
- Have significant assets or income to protect
Ask About Endorsements (Optional Add-Ons)
Endorsements let you customize your policy to better match your life. These small add-ons can offer big protection.
Some common endorsements for first-time buyers:
- Water backup/sewer coverage
- Scheduled personal property (jewelry, collectibles)
- Replacement cost for personal property (not just depreciated value)
- Animal liability coverage
- Home-based business endorsements
- Service line protection
Not sure what you need? We’ll walk you through it, no pressure.
Plan for Escrow and Mortgage Requirements
If your mortgage includes an escrow account, your insurance premium will likely be paid as part of your monthly mortgage. Your lender collects a portion each month and pays your policy on your behalf.
- Make sure your insurance company coordinates directly with your mortgage lender
- Confirm the correct mortgagee clause is added to your policy
- Review your escrow estimates so you’re not surprised by the monthly payment
We handle all the lender communications for our clients to make the closing process smooth and stress-free.
Reassess Your Coverage After Move-In
Once you’re settled into your new home, your needs may change.
You might:
- Buy new furniture or electronics
- Add a security system (discount!)
- Renovate or upgrade appliances
- Get a pet
Each of these changes could impact your insurance. It’s a good idea to review your policy annually, and always let your agent know if you make changes.
Bonus Tip: Work With an Independent Agency
As an independent agency, Crain Insurance Group isn’t tied to one carrier. That means we shop around on your behalf, comparing multiple companies, coverages, and pricing to get the best fit for your first home.
We’re also your advocate during the claims process, your advisor during life changes, and your go-to resource for honest, helpful guidance.
You only buy your first home once. But if you do it right, your insurance policy can protect you for years to come.
First-Time Buyer Insurance Checklist
Here’s a quick recap of what to do when buying your first home:
☐ Start shopping 2–3 weeks before closing
☐ Choose replacement cost coverage, not just market value
☐ Review deductibles and make sure they match your comfort level
☐ Consider bundling, but compare carefully
☐ Ask about endorsements for your lifestyle
☐ Increase liability limits if needed
☐ Confirm lender and escrow info is correct
☐ Reassess after move-in
☐ Choose an independent agent who shops for you
Final Thoughts: Protecting Your First Home Starts Here
Buying a home is a major milestone. Insurance may not be the most exciting part, but it’s one of the most important.
At Crain Insurance Group, we’re here to help first-time buyers feel confident, informed, and fully protected. Whether you need help understanding coverages, navigating lender requirements, or getting quotes from top carriers, we’ve got you covered, literally.
Disclaimer: The information provided in this post is for general recommendation purposes only. Please consult with your own licensed insurance agent for advice specific to your situation. Insurance can vary by state. If you don’t have a trusted agent, we’re happy to assist with quotes and guidance.