Homeowners Insurance

Homeowners insurance covers damage to your home and belongings (fire, wind, theft, vandalism) and your liability if someone is injured on the property. Every mortgage lender requires an active policy, because the house is the collateral securing the loan.

For most borrowers the annual premium is divided by twelve and collected with the mortgage payment into an escrow account, from which the lender pays the insurer — that's the second "I" in PITI. Premiums vary widely by state and by the home's age, construction, and claims history; coastal and disaster-prone areas pay the most.

Two gaps catch new buyers out. Standard policies exclude floods and earthquakes — those need separate policies, and lenders in designated flood zones require flood insurance. And homeowners insurance is not PMI: homeowners insurance protects you and the property, while PMI protects only the lender against your default.

Our mortgage payment calculator includes an editable insurance line, and the state calculators pre-fill a sourced statewide estimate.

Related terms: Escrow, PITI, Private Mortgage Insurance (PMI).

 
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