While purchasing a home is very exciting, it also comes with a lot of responsibility. This is one of the largest purchases you will ever make, so you need to do your research and be educated about every step in the process.

One important detail that does not always get the attention it deserves is homeowner’s insurance. The homeowner’s insurance policy on your house can help to cover the cost of damages from things like hail, lighting, wind, fire, smoke, vandalism and theft. Additionally, if you have to leave your home while covered damages are being repaired, many policies will help pay for the additional living expenses that you incur during that time.

Note: While homeowner’s insurance does cover many types of damage, it does not cover floods or earthquakes. Separate policies are required for these matters.

When finalizing your homeowner’s insurance policy, another detail you will have to consider is making sure you have an appropriate level of coverage. Your mortgage lender may require a certain amount of coverage, but you may find that you actually need more in order to fully protect all of your assets. You will also have to decide how much liability protection you need. This is where it can be beneficial to talk with a professional. Someone who specializes in homeowner’s insurance will know how to best determine your needs.

Not only do you need to know exactly what will be covered by your homeowner’s insurance policy, but you should also find out what is necessary in order to keep your policy up to date. If you remodel your home and make significant improvements, you should let your insurance agent know. This will allow your agent to update your policy as needed so that the replacement cost of your home reflects the changes that have been made.

If your home ever experiences such severe damage that it becomes a total loss, the replacement cost is an estimate of what it would cost to rebuild the home as it was. If you fail to update your policy to reflect your remodel or upgrades, then the replacement cost will not be as high as it should be. Rebuilding your home after it has been damaged can be very costly, so keeping your policy up-to-date is imperative to funding the project.

Homeowner’s insurance can be tricky, but it is important for individuals and families to know where they stand when it comes to their coverage.