Homeowners insurance is a requirement for buying a new house, but there are many different options available. Most lenders let you decide which insurance company you want to work with and what level of coverage you want for the home. How much of your purchase budget should you set aside for this type of insurance?
Factors That Affect Homeowners Insurance Premiums
When selecting a policy, the amount you have to pay each month depends on several factors:
- Deductible
- Liability limits
- Coverage
- Age of house
- Home security
- Additional policies included (such as flood protection)
It can be tempting to want to pay as little as possible for monthly insurance, but that doesn’t always give you the protection you need. One of the best first time home buying tips is to pick out insurance coverage that provides the best overall value for your investment. Homeowners insurance covers damage to your property from fire, theft and extreme weather, which is why it’s so important. It can literally allow you to rebuild in the case of unexpected emergencies.
