Why You Should Get A Home Insurance Estimate

A home insurance estimate is essential to new home buyers since the cost of insurance can be included in their monthly mortgage payments and is directly associated with the price or replacement value of your home. Most lenders even required my wife and me to secure an insurance policy before completing the mortgage loan paperwork and closing escrow on our new home. Those who already own their homes should get an estimate and quote from different companies every 3 to 5 years to make sure they are not paying too much. My family is just coming up on 3 years, so I will update everyone later on whether I was able to get cheaper rates with another carrier.

New Home Buyers

To protect their mortgage loan and the lender or bank, new home buyers must buy an annual policy when they buy their house. The bank then divides the cost of the policy by 12 and adds the amount to the monthly mortgage payments, to be held in escrow, to pay for the next year’s insurance. An insurance quote helps buyers determine their total monthly mortgage payments, which can be an important factor when buying a house. If two or more houses are being considered, an estimate is needed for each house because houses are subject to different rates.


Consumers who already have a home should review their coverage and compare rates, policies, and companies regularly. It is important to include information about improvements to the home and changes in the appraised value. Comparing quotes from different companies can help homeowners find the lowest rates for the best coverage. Certain renovations can significantly lower or raise the cost of insurance so consumers should always get a quote whenever a house is remodeled.

As researched by the Federal Reserve Bureau, annual premiums average between $300 and $1,000, depending on the value of your home, the potential for natural hazards and disasters in your area, and any other liabilities. Your geography and location also affects the types of natural hazards your policy will cover. For example, most homeowner’s policies will not cover flooding if you live in a high-risk area; however, basic coverage will protect against fire, wind, and vandalism.

Factors That Affect Premiums

Home insurance rates can be higher for older homes with old wiring, plumbing or HVAC systems since these factors raise the risk of a fire. Safety issues like loose stairs, banisters, or carpets and other hazards also increase insurance costs. The ownerships of certain dog breeds, like Pit Bulls or Rotweilers, or a swimming pool on the premises, significantly raise the cost of insurance. Your quotes are based on the risk that a claim will be made and how much the payout may possibly be, so factors which raise the risk of a claim also raise the cost of home insurance.

Location Is A Risk Factor

Where a house is located can also impact your premiums since certain regions of the country are more prone to natural disasters than others. Coastal areas, such as Texas, Louisiana, and Florida, usually have high insurance costs due to the risk of storms, floods and hurricanes, while other areas may have higher premiums due to the frequency of tornadoes, wildfires or mudslides. For this reason, standard homeowner’s insurance policies don’t even cover earthquakes in California. A policy estimate on two identical houses located in different regions of the same state could reflect a difference of hundreds of dollars per year.

Cheap Home Insurance

Inexpensive ways to lower your costs and premiums include adding storm shutters, reinforcing a roof to make it more wind resistant or installing dead-bolts and smoke detectors. These fixes and improvements can save between 5% and 10% on yearly rates. Electronic security systems that trigger alarms at security companies or fire and police stations can save as much 20% on premiums. However, it’s important to note that the systems must be approved by the insurance company, so call your carrier and approve the additions.

Finding Discounts

Another way to cut insurance prices is to find discounts. Most insurance companies offer a discount to customers who purchase more than one type of policy, like home, auto, life, and/or health. Retirees, veterans, and the disabled may also be eligible for special discounts. Members of labor unions, professional associations and fraternal organizations should check to see if their membership entitles them for a group rate. A rate quote from a group insurer is based on discounted rates for a large number of people and may be cheaper than other quotes. Lastly, use our quote system online to get multiple free home insurance quotes instantly.

Compare Quotes Online

The easiest way to compare rates is to use insurance comparison sites because they offer multiple quotes from the best companies in the United States. Since insurance companies use different rating systems and statistical tables to calculate rates, liabilities and quotes, there may be a substantial difference in pricing between various insurers.

For example, when my wife and I purchased our home, we got quotes from 5 carriers before choosing who to buy from. Monthly premiums ranged from $400 to $700, and some sales reps even wanted to include the cost of our land in the insured amount. I insisted that this did not make sense, as fire, wind, or flood was not going to damage the ground I lived on. Instead, I took the appraisal value of our home and subtracted the estimated cost of the land, to arrive at the total cost of replacement for our actual home. I only purchased coverage from an insurance company that would allow me to get coverage for that amount, and that alone saved us about $3,000 per year in premiums. Again, I can not emphasize enough that shopping around can save consumers time and money when purchasing anything, including home insurance.


A home insurance estimate is a useful tool that can save consumers money on housing costs. Since home insurance is a necessary monthly expense for as long as a consumer owns his or her home with a mortgage, it makes sense to shop for the best rates and comprehensive coverage. Quality websites will provide several free estimates to make it easy and convenient to get the best home insurance for your needs.