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TLDR: Insurance is mandatory if you’re obtaining a loan. Shopping around will save you some big moolah in the long run.
TLDR: Insurance is mandatory if you’re obtaining a loan. Shopping around will save you some big moolah in the long run.
Do I have to get homeowner's insurance?
Do I have to get homeowner's insurance?
If you will be getting a mortgage, the answer is almost always "Yes." The lender wants to ensure that their collateral (your house) is protected, and will typically require proof of coverage before you close. Some lenders will want their names to be listed under the "Additional Insured" section to ensure they're reimbursed. Depending on the location of your new home, you may also be required to purchase Flood Insurance. See more about flood risks on FEMA's National Flood Insurance Program page.
Tip: Shop Around
Tip: Shop Around
As you hear in all of those insurance commercials, you'll save money by shopping around–don't just go with the first insurance company you think of.
What can I expect to pay per month for homeowner's insurance?
What can I expect to pay per month for homeowner's insurance?
This depends widely on where you live and how much your property is worth, but can range anywhere from $25 to hundreds per month. The more expensive your property, the more expensive your insurance premium is going to be since the insurance company will be liable to pay more if something happens to your house. As with most services, we suggest you shop around before making a selection.
Where are some good places to find homeowner’s insurance?
Where are some good places to find homeowner’s insurance?
Eventually, we’ll offer vetted providers on our site. For now, use the good ol’ Google.
For interior issues you may encounter, such as a leaky pipe or a fridge that stops working days after you purchased the property, obtaining a home warranty may be a good option. While we suggest asking the seller to pay for the warranty in your offer, it's often still worth the price to you if they refuse. You never know what "personality" (or minor, irritating maintenance issues) your property will have before moving in: Does the guest bathroom faucet drip? Do you have to give the HVAC system a whack when you turn on the heat? Many home warranties will cover these types of repairs with a hundred dollar fee for each visit a contractor makes, and it can be worth the $500 or $600 to pay for the warranty for a year just in case something hits the fan, literally or figuratively, after you move in.
Not-So-Fun Fact
Not-So-Fun Fact
Insurance companies have a reputation for dropping customers for repeated flood claims, so keep that in mind if you’re buying a property that has a tendency to flood. If the damage isn't prohibitively expensive, it's worth considering simply paying for repairs out of pocket.
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