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By Matt Cole State Farm
# The insights Costs of Buying Your First Home in Franklin: What Your Realtor Didn't Tell You About Insurance Your realtor walked you through the inspectio...
Your realtor walked you through the inspection, helped you negotiate the price, and got you to closing day. But there's a good chance nobody sat you down for the insurance conversation you actually needed to have.
It's not that realtors are keeping insights. They're just focused on getting you into the house. Insurance usually shows up as a line item on your closing documents, you scramble to get a policy in place, and everyone moves on. The problem is that insurance costs don't stop at that initial premium, and Franklin's unique characteristics can create some expensive surprises.
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When you're getting ready to close, your lender requires proof of homeowners insurance. That's great, except they only care that the dwelling coverage meets their requirement. They want to make sure their investment is protected if your house burns down.
What they don't care about? Whether you have enough coverage for everything else. Your personal belongings, liability protection, additional living expenses if you can't stay in your home during repairs—none of that matters to your lender. You could be dramatically underinsured in ways that would devastate you financially, and your mortgage would still go through just fine.
Most first-time buyers shop for that magic number the lender wants, find the cheapest policy that hits it, and call it done. Then something happens, and they discover their policy doesn't come close to covering their actual needs.
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Middle Tennessee has a way of keeping insurance interesting. We get severe thunderstorms that can shred roofs, hail that dents everything in sight, and tornadoes that don't always make the national news but definitely make a mess.
Your standard homeowners policy covers these things, but here's what catches people off guard: the deductibles. Many policies in our area come with separate wind and hail deductibles that work differently than your regular deductible. Instead of a flat amount, you might have a percentage-based deductible.
That percentage applies to your dwelling coverage amount. If you have a percentage-based deductible, you could be looking at a substantial out-of-pocket expense even for damage that feels like it should be a straightforward claim. That's money you need to have sitting around, which is tough when you just drained your savings for a down payment and closing costs.
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Here's where things get really interesting. That dwelling coverage number your lender required? It's often based on your home's market value or loan amount. But replacement cost—what it would actually take to rebuild your house from the ground up—can be quite different.
Franklin's construction costs reflect our area's growth and demand. Materials, labor, permits, code compliance—it all adds up. If your house was built a while ago and you're buying it at market value, there's a decent chance the rebuild cost is higher than what you paid.
You might think you're fully covered, then discover after a major loss that your policy doesn't cover the full cost to rebuild. The difference comes out of your pocket, and it can be significant enough to create serious financial hardship.
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Walk through your house right now and mentally price everything. Your furniture, clothes, kitchen items, electronics, tools, sports equipment, everything in your garage and closets. Really add it up.
Most people dramatically underestimate the value of their personal property. You didn't buy everything at once, so you never felt the full impact. But if you had to replace it all tomorrow, you'd be shocked at the total.
Standard policies provide personal property coverage, but it's typically calculated as a percentage of your dwelling coverage. That might not be enough, especially if you're a young professional with a solid wardrobe, decent electronics, or any hobbies that require gear.
And here's another fun surprise: certain categories have sublimits. Jewelry, collectibles, art, cash, business equipment—these often have low maximum payouts unless you specifically schedule them with additional coverage. That engagement ring or those nice watches? Probably not fully covered under your base policy.
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Franklin's a wonderful community, but it's also full of people who can afford good lawyers. If someone gets hurt on your property and decides to sue, your homeowners liability coverage is your financial protection.
The standard liability limit on basic policies might sound like plenty, but it disappears fast once lawyers get involved. Medical bills, lost wages, pain and suffering, legal defense costs—it adds up quickly. If the judgment or settlement exceeds your coverage, they can come after your personal assets.
This becomes even more important if you have a pool, a trampoline, a dog, or regularly host gatherings. These increase your liability exposure. Young families with kids having friends over, professionals hosting work events, anyone with a lifestyle that brings people to their property—you need to think carefully about whether your liability coverage is adequate.
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Here's the thing almost nobody tells first-time homeowners: umbrella insurance exists and it's incredibly valuable for the coverage it provides.
An umbrella policy sits on top of your home and auto insurance, providing additional liability coverage. It kicks in when you exhaust the liability limits on your underlying policies. For young professionals and high earners especially, this protection becomes essential.
You're building a career, accumulating assets, and establishing your financial future. You're exactly the kind of person someone would target in a lawsuit. An umbrella policy protects everything you're working to build.
The other benefit? Umbrellas often provide broader coverage than your base policies, protecting you in situations where your homeowners policy might not apply.
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Water seems straightforward, but insurance treats it like a philosophy exam. Water damage is covered or not covered depending on where the water came from, how it got there, and what it damaged.
Burst pipes? Usually covered. Slow leak that caused mold over time? Probably not. Sewer backup? Not unless you added that coverage. Sump pump failure? Also requires specific coverage. Flood? Definitely not covered under regular homeowners insurance—that requires a separate flood policy.
Franklin's rolling terrain and creek systems mean water can behave in interesting ways. Some properties have flood risk that isn't immediately obvious. That beautiful lot near the creek is lovely until you discover you need flood insurance, which is a separate policy with its own premium and requirements.
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If you're working from home, you probably have some valuable equipment. Computer, monitors, maybe a nice desk setup. If you're running a side business or freelancing, you might have even more.
Business property typically isn't covered under a standard homeowners policy, or it's covered at very low limits. If someone trips and falls during a business meeting at your home, your homeowners liability might not cover it. If your business equipment is stolen or damaged, you might be out of luck.
These gaps aren't obvious until you file a claim and discover your laptop and camera gear aren't covered because you use them for your freelance work.
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The insights costs of homeownership insurance aren't just about money—they're about the stress and financial vulnerability that come from being underinsured. You scrimp on coverage to save on premiums, then spend years worried about what happens if something goes wrong.
The better approach is to think about insurance as a complete protection strategy, not a line item to minimize. Look at your actual replacement costs, your real liability exposure, your true personal property value. Consider umbrella coverage. Add the endorsements that close gaps in your base policy.
Yes, comprehensive coverage means a higher premium. But it also means you can actually relax and enjoy your new home instead of lying awake wondering if you're one disaster away from financial catastrophe.
Your realtor got you into the house. Now it's time to make sure you can stay there no matter what happens.