Insurance tips for first-time homebuyers: How agents can help new owners avoid costly surprises

Buying a first home is a significant milestone. For many new homeowners, closing day is filled with excitement, pride and a sense of accomplishment. Nationwide research shows more than half of homeowners describe closing on their home as exciting, joyful or rewarding. 

But that excitement is often coupled with a sense of unknown. 

After move-in, first-time homebuyers are frequently surprised by how much work it takes to maintain a home, how quickly costs add up and how often systems break or need attention. For insurance agents, that gap between expectation and reality creates a powerful opportunity: helping first-time homebuyers make smarter, more confident decisions about homeowners’ insurance before and after closing. 

This article provides practical tips agents can use to help guide first-time homebuyers through the insurance side of homeownership, grounded in what today’s homeowners say they wish they had known. 

10 tips to guide first-time homebuyers

1. Help buyers look beyond the down payment

Many first-time homebuyers focus heavily on the down payment and monthly mortgage payment, underestimating the true cost of owning a home. In Nationwide’s research, nearly one-third of homeowners said they were surprised by how quickly unexpected costs add up after closing. 

Agents can help by framing homeowners’ insurance as part of a broader ownership budget that includes: 

• Property taxes 

• Utilities 

• Maintenance and repairs 

• Insurance premiums and deductibles 

Positioning insurance early in the buying process helps buyers avoid sticker shock later and see the true value of insurance before closing.

2. Explain why homeowners’ insurance costs aren’t static

More than 30% of homeowners reported being caught off guard by homeowners’ insurance premiums after closing.  

Agents can add value by explaining factors that influence premiums over time, such as: 

• Claims trends tied to weather and natural disasters 

• Rising repair and material costs 

• Changes in coverage limits as home values increase 

• Renovations or additions that alter replacement cost 

Setting realistic expectations early helps build trust and reduces frustration later.

3. Tie coverage decisions to the age of major systems

When asked what advice they would give their former selves, homeowners most often cited checking the age of major systems like roofs, HVAC and plumbing. 

Agents can reinforce this by: 

• Reviewing inspection reports with buyers 

• Discussing how older systems affect risk and claims 

• Ensuring coverage limits align with replacement costs, not purchase price 

This conversation helps buyers understand why insurance isn’t one-size-fits-all, even among similar homes.

4. Emphasize replacement cost, not market value

First-time buyers often assume homeowners’ insurance should match the home’s purchase price. That misunderstanding can lead to being underinsured. 

Agents should clearly explain the difference between market value, mortgage amount and replacement cost. 

Using real-world rebuilding scenarios can help buyers understand why adequate dwelling coverage is critical, especially as labor and material costs continue to rise.

5. Prepare buyers for the realities of DIY maintenance

Today’s homeowners are hands-on. Nationwide found that more than 70% prefer to handle routine maintenance themselves, and nearly half tackle cosmetic renovations on their own. 

While DIY can save money, agents should also help buyers understand: 

• Liability risks associated with home projects 

• The importance of documenting improvements 

• When professional work may reduce long-term risk 

These discussions naturally lead into endorsements, liability limits and umbrella policy considerations.

6. Address deferred maintenance as an insurance risk

Cost concerns are causing many homeowners to delay maintenance and repairs. In the past year, homeowners reported deferring cosmetic renovations, routine maintenance and even necessary major repairs. 

Agents can help buyers understand that deferred maintenance can: 

• Increase claim severity 

• Lead to coverage disputes 

• Result in higher premiums or nonrenewal 

Framing maintenance as a risk management strategy reinforces the agent’s advisory role.

7. Use smart home technology as a loss prevention tool

While video doorbells and security cameras are common, only about one in 10 homeowners owns smart water sensors, despite water damage being a leading cause of claims. Agents can guide firsttime homebuyers toward smart devices that help detect issues early, especially those related to electrical or water systems. 

Agents can: 

• Explain how smart sensors help prevent losses, not just record them 

• Highlight water sensors, leak detection and shutoff devices 

• Discuss potential premium credits where available 

This is a tangible way to connect technology with insurance outcomes.

8. Talk openly about weather and disaster preparedness

Concern about severe weather is growing. Two-thirds of homeowners say they’re more worried about natural disasters than in the past, and most agents report an increase in weather-related claims. 

Yet few homeowners have an evacuation or preparedness plan or have updated their insurance coverage to reflect those risks. 

Agents can step in by reviewing: 

• Flood, wind and earthquake exclusions 

• Deductible structures 

• Temporary housing and additional living expense coverage 

• Enrollments in early alert programs  

These conversations are especially valuable for first-time buyers who may not fully understand regional risks.

9. Reinforce what coverageactually feelslike during a claim

While many homeowners feel confident in their coverage, nearly 40% doubt their policy would meet their needs in a real claim situation. Concerns often center on what isn’t covered and how claims are handled. 

Agents can differentiate themselves by discussing features that homeowners find emotionally reassuring, including: 

• Faster claims resolution 

• Coverage for temporary housing with added flexibility 

This reframes insurance as a service experience, not just a contract.

10. Encourage regular policy check-ins, not just renewals

First-time buyers often treat homeowners’ insurance as a “set it and forget it” purchase. But life changes quickly after move-in. 

Agents should position annual reviews as opportunities to: 

• Adjust coverage after renovations 

• Reassess personal property limits 

• Review deductibles and endorsements 

• Address new risks as the home becomes a long-term investment 

With more than 80% of homeowners viewing their current home as a “forever home,” ongoing guidance matters more than ever. 

Turning first-time buyers into long-term clients

Nationwide’s research shows homeowners don’t regret buying their homes, but many wish they had done more due diligence beforehand. By proactively educating buyers, setting realistic expectations and tying insurance decisions to real-life ownership challenges, agents can become trusted advisors at one of life’s most important moments, and build lasting relationships long after the keys change hands.