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Home Insurance Payments: How Do They Work?

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 | June 6, 2019
What you should know about paying for homeowners insurance

When buying a home, there are many costs and details to figure out – getting pre-approved, negotiating an offer, hiring an inspector, and the list goes on. Many future homeowners often forget one detail near and dear to our hearts here at InsuraMatch that’s sure to come up before closing and that’s homeowners insurance. Your home is a huge investment and homeowners insurance can provide valuable protection to help you recover financially from damage and loss. When purchasing homeowners insurance, there are a couple different ways to make your homeowners insurance payments. Working with an insurance agent and your mortgage broker can help you sort out the details of your specific situation and figure out how homeowners insurance payments work.

Paying for Homeowners Insurance

How Much Does Homeowners Insurance Cost?

According to the Insurance Information Institute, the average cost of a homeowners insurance policy runs around $1,183 per year. The cost of your policy will vary from that figure, due to your unique home and the many different rating factors home insurance companies use to price out their policies. From location to the home’s value to the amount of personal property you keep in your home, there are many different components that contribute to the cost of your policy and each insurance company uses different criteria to measure your risk.

Because different companies assess risk differently, it’s smart to compare insurance quotes from multiple homeowners insurance companies to find the best fit for your home. An independent insurance agent, like InsuraMatch, can help you quickly and easily compare quotes from leading insurance providers and advise you on what coverage limits to carry for your situation.

Looking for homeowners insurance? Call us today at (844) 300-3237 to compare quotes in just a few minutes with the help of an expert insurance advisor.

Read related: 18 Ways to Lower Your Homeowners Insurance Premiums

Paying Your Homeowners Premium via Escrow or Direct Payment

For homeowners with a mortgage, you will likely have the option to bundle your insurance payments into your monthly mortgage payment. Lenders like this option, since it allows them to see that you are keeping current on your homeowners insurance and homeowners insurance payments. If something catastrophic were to happen to your home, your lender knows that you have the insurance necessary to rebuild.

Work with your lender to understand what is included in your monthly payment and how they structure your mortgage, tax and homeowners insurance payments so you can check for accuracy. Some lenders will combine the costs of your mortgage, insurance and taxes, others may just include the mortgage payments and taxes.

Paying in Installments vs. Paying in Full for Homeowners Insurance

Most insurance companies offer their customers the option to pay for the policy in full at the start of the policy, or pay in installments over the life of the policy. Whether you pay your homeowners insurance in installments or in full is up to you and your budget, but there can be a price difference when it comes to these options. Oftentimes insurers will charge a transaction fee for paying in installments. The more payments you make, the more fees you’ll incur.

The benefit of paying for your homeowners insurance in full is it oftentimes presents an opportunity to get a discount. Many insurance companies reward customers who can pay in full with a small discount. This is called a paid-in-full discount. If you’re interested in paying for your policy upfront to see if that can save you some money, consult your insurance agent to see if this is an option for you.   

The Bottom Line

However you set up your homeowners insurance payments, it’s important to pay your premium and pay it on time. Late payments can lead to cancellation which could leave you without coverage or with voided coverage when you need it most. Keeping current is important to keeping your insurance protection in place.

No matter how you pay for your homeowners insurance, be sure to shop around and compare quotes from different homeowners insurance companies before you choose a policy. By shopping around, you’ll be able to see which insurer can meet your needs best and which will offer you the best price.


Looking for homeowners insurance advice or comparison quotes? Our expert insurance advisors can help. Give us a call today at (844) 300-3237!
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