What Buyers Need To Know About Homeowner’s Insurance
If you’re getting ready to buy a home, there’s more to consider than just your mortgage payment. One important piece of the puzzle that often gets overlooked? Homeowner’s insurance.
It’s one of those things you hope you never need—but when something unexpected happens, you’ll be glad you have it. Here’s why it matters, what it covers, and how to budget for it.
What Does Homeowner’s Insurance Actually Cover?
Homeowner’s insurance is designed to protect you financially in case something goes wrong. Think of it as a safety net for your home—and your peace of mind.
Here’s what’s typically included in most standard policies:
✔ Repairs or Rebuilding: If your home is damaged by things like fire, wind, or other covered events, your policy helps cover the cost to fix it—or even rebuild.
✔ Personal Property Protection: It’s not just about the structure. Your furniture, electronics, clothing, and other personal items may be covered if they’re stolen or damaged.
✔ Liability Coverage: If someone gets hurt on your property, your policy can help pay medical bills or legal fees so you’re not stuck footing the bill.
In short, homeowner’s insurance protects both your property and your finances—which is why it’s required by most lenders.
Why You Need To Budget for It Now
When you close on a home, your first homeowner’s insurance premium is typically part of your closing costs. But this is also a recurring expense you’ll need to plan for as a homeowner—similar to your taxes or utilities.
And here’s the catch: insurance costs are going up.
What’s Causing Rates To Rise?
There are a few reasons why premiums are trending higher:
More Natural Disasters: Hurricanes, wildfires, and floods are happening more often, which means more claims for insurance companies to cover.
Rising Construction Costs: Labor and materials are more expensive, so rebuilding a home now costs more than it did a few years ago.
Fewer Insurance Providers: Some companies are pulling out of high-risk areas, which limits options and drives up prices in certain regions.
Previous Rate Increases Weren’t Enough: Many insurers are playing catch-up from years of underpricing.
The result? According to recent data, the average cost of homeowner’s insurance has increased significantly over the past decade—and is expected to continue climbing.
How To Get the Best Coverage (Without Overpaying)
Yes, insurance is essential—but that doesn’t mean you can’t be smart about how you shop for it. Here are a few tips:
Compare Quotes: Rates vary widely depending on location, coverage, and provider. Don’t settle for the first offer you get.
Ask About Discounts: Many insurers offer savings if you bundle with your auto policy or install a security system.
Review Coverage Carefully: Make sure you understand what’s covered and what’s not, so there are no surprises later.
Your real estate agent and lender can also help you connect with trusted insurance providers who understand the local market.
Bottom Line
Homeowner’s insurance is more than a checkbox on your closing documents—it’s a critical part of protecting your investment. And while costs are rising, with a little preparation and the right guidance, you can find a policy that gives you the coverage you need at a price that works for your budget.
Have questions about budgeting for homeownership? Let’s talk. We’re here to walk you through every step of the process—from house hunting to handing you the keys.