A key component of becoming a homeowner is obtaining home insurance. When purchasing a property, the contents of your home must be properly insured in case of loss or damage. Homeowners insurance covers structural and personal property losses as well as liability protection if the homeowner is held liable for an incident.
This blog intends to provide readers with useful information on how to become a homeowner, as well as crucial advice on navigating the homeowners’ insurance market in 2023. Let’s get started!
What to Expect in 2023
Factors that influenced the homeowners’ insurance market in 2022 aren’t going to disappear this year. Most policyholders shouldn’t be surprised to see their premiums continue to increase, although certain factors may become less impactful. For example, although construction labor and building material costs continue to affect insurance costs, recent U.S. Bureau of Labor Statistics show that at least the latter’s increasing prices may be leveling off.
Severe weather events and natural disasters will likely remain significant threats in 2023. With that in mind, increasing insurance premiums, specifically in high-risk areas like southern states, should be expected. Fortunately, homeowners in some areas may enjoy some financial reprieve as government officials take action. For example, in December 2022, the state of Florida passed legislation designed to provide a safety net for insurance companies and stabilize the property insurance market.
5 Tips for Buying Home Insurance in 2023: How to Become a Homeowner
Amid market trends and global factors mainly outside of the average policyholder’s control, there are still various ways to optimize homeowners insurance coverage and either reduce premiums or minimize increases:
- Bundling policies—By combining multiple components of their insurance portfolio under the same broker, such as home, auto, and life, homeowners may be privy to discounts as high as 20-25%. Furthermore, bundling coverage can make it easier for policyholders to manage their insurance portfolios and decrease the likelihood of an insurer dropping them in response to an incident.
- Improving homes—Upgrading property can help secure lower homeowners insurance prices. Potential improvements may include installing new plumbing or storm shutters, upgrading roofs, and adding security or fire protection systems.
- Reconsidering home features—Certain additions to your property, such as swimming pools and trampolines, may generate additional risks and exposures. Insurance companies generally must consider such conditions and raise premiums accordingly.
- Exploring discounts—Homeowners who have not filed a claim against their policies for an extended period (generally at least three-to-five years) may receive a discount. Even aspects of a homeowner’s life not directly related to their home could earn them lower premiums. For example, many insurance companies may offer discounts for members of the military or certain professions, such as law enforcement officers, firefighters, and teachers.
- Reassessing coverage—Some homeowners may be able to find lower rates by shopping around for multiple quotes. Altering the details of coverage may also help to keep premiums from increasing. However, policyholders should proceed with caution when adjusting their insurance. For example, increasing deductibles may lower premiums but also mean higher out-of-pocket costs before a policy will render aid.
For most people, homeownership is a dream come true. However, like any significant financial investment, a home must be adequately protected by comprehensive insurance. In 2023, many factors must be accounted for while optimizing homeowners insurance policies.
Without adequate homeowners insurance coverage, homeowners risk losing their investment in the event of an unexpected tragedy. As a result, potential homeowners must prioritize knowing the value of homeowners insurance when preparing to purchase a home.