Best Homeowners Insurance

first time homeowners insurance

Chances are this may be one of your biggest decisions ever, to buy a home.

Buying the best homeowners insurance will be a major part of the process, regardless if you have a loan or not.

First time home buyers will need to have home insurance ready before the closing on the sale. 

But, what company and insurance coverage's will I need?

Homeowners insurance is based on the size of the home and the build quality – standard, semi-custom and custom home. 

Here’s a quick home insurance calculator to help get an estimated premium you might pay for home insurance.

What is the Best Homeowner Insurance for for the first time Buyer?

The best homeowners insurance is one that meets the needs of the property but at an affordable premium. 

Buying too much or needed insurance is going to raise the cost of the premium.  At the same time, not having enough coverage could leave you exposed to costly expenses not covered by your insurance policy. 

We recommend getting several quotes and ask why their policy is better. 

Feel free to share the quotes you receive from one agent to another.  

Why – so you can get feedback quickly on the strength and weakness of different coverage and companies. 

You’ll learn a lot in a short period when you shop for cheaper home insurance and ask the question – why is your policy, which is cheaper, better than this other company?

 How much much should i pay for  homeowners insurance?

How do homeowners insurance premiums affect my monthly mortgage payment?  

The more costly the home insurance will increase your payment because the mortgage company will need to collect more money every month to cover the cost of home insurance.  

A $2,000 annual home insurance premium vs. a $3,200 premium will make a $100.00 a month difference in your monthly mortgage payment, assuming you escrow for insurance and taxes, which is 9 out of 10 homeowners.

Don't get caught up in buying the cheapest homeowners insurance just to save a couple bucks.

The time will come, may be sooner than you think, and you'll want your home policy to cover any claims.  Saving money is important, but paying thousands of dollars out of pocket with an unexpected claim can really set you back.

factors which will influence the cost of home insurance.

1. Location of property

Depending on the state you live will have a large impact on the cost of homeowner’s coverage.  States like Arizona are relatively free from freezing weather, tornadoes, hail, hurricanes, floods and other natural disasters like Texas, Oklahoma, and Louisiana.

You may not be able to choose the state you live, but you can be aware of the different weather conditions that WILL affect your home.  Having the best home insurance policy to cover those natural disasters and trusted home insurance adviser to find affordable coverage.

Check to see if the property is retrofitted with protections that minimize future home insurance claims. Storm windows, high impact or metal roofing, are a few examples that may cost a little more now but will help protect your home. 

Make sure to buy the right home insurance

2. Personal Credit and Prior Insurance Claims

Your credit score will be another large factor and if you’ve had any prior property claims.  Why is credit used to determine the cost of homeowners insurance?  It’s a measure of risk and potentially more prone to filing claims in the future. 

In short, if you have a hard time managing paying your bills the higher probability you won’t keep up with the maintenance of the property.  The poorly managed property has a higher likelihood of claims.  Prior home insurance claims would be similar to having prior auto insurance accidents when shopping for other vehicle insurance.  One claim may not be a red flag for insurance companies, but two and three prior claims, you’re going to have a hard time finding affordable home insurance.

Keep your credit in good repair and pay less money for homeowners insurance.  
Your could save 10% - 50% or more with an excellent credit score
home insurance calculator

3. Age of Roof

The age of your roof in most states is a caution sign, for insurance companies, depending on the state located.  Unless you live in states like California or Arizona which have relatively mild weather, there’s a high probability the largest claim you will file is for roof damage.  Hail, high-wind, and ice cause the majority of claims filed on the exterior of homes in the US.

Newer roofs are more flexible and can absorb the impact of hail vs. an older brittle roof.  So, the newer the roof, the lower the premium.  

If your home has a 10 or 20-year-old roof, you might find your policy will only provide ACV or Actual Cash Value coverage.  ACV coverage will pay to replace the roof based on a depreciated value, less your deductible. Example – 15-year-old roof with a life expectancy of 30 years, which is probably generous. New home roof cost is $10,000 for simple math.  The insurance company will only pay half the cost to replace since the original life is already half used, or they will pay $5,000.  You have a deductible of $1,500, so the amount you would receive to replace your roof is $3,500.

Home Insurance Calculator Cost

$10,000 new roof – depreciation $5,000 = $5,000 - $1,500 deductible = $3,500 check

If the cost to replace your roof was $5,000 x 50% = $2,500 - $1,500 (deductible) = $1,000 check

Pro Tip – ask the age of the roof when buying a house and ask any home insurance company if they penalize (ACV or depreciated value) if your roof is over ten years old.

homeowners insurance rates
This is not the time to find out you don't have a FULL replacement cost policy for your damaged roof.
Make sure to ask questions and read your policy.

4. Bundle coverage's with home and auto

Yes, it is true, the more you buy, the better the price.  The same is true for homeowners insurance.  Insurance companies like to get all your business and willing to give larger discounts of 10%, 20% or more to get everything.  Why you ask – because the likelihood you’ll keep all your business with that company for a very long time.  Its general thought that switching one policy is easy, but two becomes a little too much work.

But, is that always the best option?

In some cases, an insurance company will be very aggressive with their pricing on home insurance, but considerably higher on auto insurance. 

If the difference is small, you might want to keep all your business with one company.  It looks better if you need to file a claim and the chances of not being canceled after a single claim are better if you have at least two policies with the same company.

Auto and Home Insurance Discounts

But, if the difference in cost is hundreds or even a thousand dollars a year or more, it doesn’t make financial sense.  We recommend using an insurance broker because they will represent more than one company just for this reason.  Getting several insurance quotes is very important.

There is much more to think about when buying home insurance, but these are a few of the top you might want to consider

Homeowners Tips!

Buying a new home is an exciting time, and there’s a lot that goes into buying a house.  Once the home purchasing process has is completed, remember, homeowners insurance will be something you’ll need as long as you own the home.  So, make sure you get the right coverage at an affordable price from day one.

Finding the best homeowners insurance is easy if you use the suggestions recommended.

John Espenschied

John Espenschied owns and manages one of the top insurance brokerages for auto, home, and life insurance in the US. John is a much sought-after resource for journalists seeking his expert insight and knowledge of helping consumers find affordable coverage and advice.

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