It may not seem like many people are buying new homes, but even economic downturns never kill real estate completely, and there is a kind of security in home ownership that renting simply does not provide. When shopping for your new home, however, it's important to factor in the cost of insuring your home, since your lender will require you to carry it.

When looking at houses, it's also a good idea to consider whether or not they will be more or less expensive to insure. Factors to consider include:

  • Locations of fire hydrants - is one close by?
  • Distance from fire department - some insurers give a break for homes within a mile of the fire house.
  • Electrical system - if the house you're looking at is an older home, you'll want to be sure this has been updated.
  • Roof - is it in good repair with no evidence of leaks? Are you also getting a roof inspection? You may wish to consider one.
  • Outdoor equipment - does the home come with a pool or trampoline? If so, you may be paying a higher premium.
  • Alarm system and smoke alarms - if these are already in place they'll net you a discount, if not, you may want to consider adding them. Smoke alarms, specifically, are required by law in much of the country.
If you are torn between two houses, knowing which would be less expensive to insure could help make the decision.

After the Loan is Closed
Once you've actually signed all your loan papers and moved into your new home, take some time to review your new homeowners insurance policy before you buy anything else. Here's why:
  • New Car? If you're adding or replacing a car after your move, you may be able to save money by insuring it with the same company covering your home.
  • Getting a Dog? Read the fine print in your contract under "conditions and coverages" to see what is not covered. Certain breeds of dogs, including Rottweilers, Dobermans, and Pit Bulls are on the "non-insurable" list, so any damage or liabilities such a dog may cause will not be covered. (Some insurers merely charge an additional premium. Check before you head to the animal shelter.)
  • Adding a wood stove or gas fireplace? You may have to have the installation approved and inspected by your insurer, to make sure there is adequate ducting and heat shielding.
Buying a home is one of the most exciting things we can do, but making sure that home is adequately insured, at a price you can afford, is just as important as choosing the house with the perfect number of closets and guest bathrooms. Even after you've been in your home for a while, remember to review your insurance policy from time to time, in case family changes require coverage changes as well.