How To Balance The Costs Of Home Insurance With Your Payments

Home insurance is an unwelcome bill for many homeowners, especially after they've spent a good chunk of their savings on everything from their down payment to closing costs. If you're worried about how to budget for everything after the dust has finally settled, here’s more about how to balance your monthly payments.

Average Home Insurance

The costs for home insurance vary widely and run anywhere from $300 – $1,300 a year. Keep in mind this is the average, and can be much higher (or potentially lower), depending on the city or town in which you live. Home insurance can also change from year to year, depending on different factors. For example, if it's found your neighborhood is more susceptible to natural disasters than was previously known, or if you decide to run a small side business out of your basement.

The Inclusions of Your Mortgage Payment

The general rule for homeowners is that they make one monthly payment that includes their taxes, insurance, and mortgage. This is to streamline everything and make it easier for every entity to get paid on time. Incidentally, this can psychologically help buyers because they're paying one (more or less) predictable payment as opposed to feeling like there's a new bill around every corner. However, insurance and taxes are not always included in payments. And because most new buyers are overwhelmed by the escrow process, it's an easy time for a detail or two to slip through the cracks.

Keep an Eye On Your Premium

One way to balance your mortgage with your insurance payments is to look for ways to cut back on the premium. Because payments are bundled, most homeowners don't always separate the two costs. But you can potentially lower your home insurance by investing in safety equipment or by renovating the home to be more structurally sound. Talking to your carrier can help you learn more about the discounts offered, how much you're likely to save, and whether the investment is worth your energy and time.

Home insurance may not always be easy to pay for homeowners, but the benefits far outweigh the costs. This is likely to be the most important investment of your life, and insurance will be there when you need it the most. Balancing your budget starts with understanding the charges before being proactive about your premium costs.