Every piece of the monthly housing cost, itemised
Estimating the other I: homeowners insurance
In short
Get a written quote for the specific address before you finalise your budget. Premiums depend on location, construction, roof age, claims history and coverage choices, so a generic figure can be far off. If the home is in a designated flood zone, the lender will require flood insurance as well, which is a separate policy.
Last reviewed against the primary sources listed below.
What moves the premium
- Location and local weather risks.
- Rebuilding cost, construction type and roof.
- Deductible and coverage limits.
- Claims history on the property.
Required coverage
Lenders require hazard coverage and, in designated flood areas, flood insurance. Ask the lender which coverage and deductibles they require before you buy a policy.
Paid through escrow
The first year's premium usually appears in section F of the Loan Estimate and the ongoing monthly share in escrow.
Line-item questions
Is homeowners insurance included in my mortgage payment?
When it is escrowed, yes: the servicer collects a monthly share and pays the premium when due.
When should I get an insurance quote?
As soon as you have a specific home in mind, so your monthly estimate uses a real figure.