When it comes to homeowners insurance, there is only one thing for sure: your mortgage lender will require you to purchase it. The majority of our clients purchase their home insurance through the company that they use for car insurance, which isn’t a bad idea because they’ll often bundle these together and save you a bit of money. But that isn’t always the case!
Be sure to shop around and obtain quotes from at least three reliable insurance companies. If they’re a smaller company, be sure that they’re licensed through the state’s insurance department, and consider checking A.M. Best to easily determine the company’s financial strength.
Homeowners insurance is one of the broadest types of insurance that you can purchase, and the types of claims are truly endless. However, there are a lot of things that your homeowners insurance won’t cover (like flooding), so be sure to read through the policy and gain a good understanding of the coverage. Unfortunately, much of it is written in “legalese”, so be sure to check out this helpful post by 360 Degrees of Financial Literacy on understanding your policy.
Lastly, remember that you’ll likely be paying this homeowners insurance in your monthly mortgage payment (most lenders include real estate taxes in your monthly payment, too). The good news is that this fee has already been estimated and accounted for by EveryHome’s Closing Cost Calculator. Be sure to use this helpful tool to budget for your new home, just by clicking the yellow “Closing Costs” button beneath each home on EveryHome.com.