Homeowner insurance policies can feel complex and like an overload of information but it’s crucial to understand the policy before you purchase so it will meet your needs. A standard policy protects you from the expense of a dwelling, personal property, or liability loss. The policy should also cover other structures on your property—like your fence, shed, or detached garage. And if your home becomes unlivable due to loss, the policy will also cover the costs of a temporary home, and other costs associated with living accommodations.

Before you buy homeowners insurance, consider these steps:

Research

Check out the risk you’re taking by researching your home on the Comprehensive Loss Underwriting Exchange (CLUE). CLUE is an information exchange that collects and reports up to seven years of home insurance and personal property claims. Searching your home will help you make a solid decision and ensure what is a red flag and/or should be included in your policy.

Coverage Gaps

Earthquakes and floods are usually not covered in a standard homeowner insurance policy, so if you’re anticipating future issues consider purchasing additional coverage. Extended replacements are a good option for your property or an umbrella policy since they provide broader coverage.

Replacement Cost & Market Value

Your insurance policy is based on the replacement cost of your home. It’s important that your policy covers a total loss and not the market value. The cost of repair or rebuilding will almost certainly be more than the cash value of your home, so it’s important your policy covers additional expenses. Determine your needs and do not underestimate.

Take Inventory

Document your belongings and make a list of the items you want included in your personal property coverage.

Savings

Insurance companies might offer a discount if you bundle all your insurance policies under one company. Check with your employer to see if there are partnerships in place with specific insurance companies to help you optimize your savings.

Get Expert Advice

Don’t rely on an internet search or a Reddit thread, call an expert for advice. Have your information readily available to share so you can provide all the variables that should be considered before you purchase the policy. And when we recommend consulting an expert, we actually mean getting multiple quotes, and having multiple conversations. Compare pricing and coverage with at least three insurers.

Purchasing homeowners insurance as a first-time homebuyer can feel overwhelming but taking the appropriate steps and equipping yourself with knowledge will make the process smoother.