What First-Time Buyers Should Know About Homeowners Insurance

Buying your first home is exciting, but it also comes with a lot of new responsibilities. One of the most important – yet often overlooked – parts of the process is securing homeowners insurance. While it may feel like just another box to check before closing, the right policy plays a big role in protecting your investment and keeping your mortgage on track.

Here’s what every first-time homebuyer should know:

1. Homeowners Insurance Is Required by Your Lender

If you’re taking out a mortgage, your lender will require homeowners insurance before you close. This protects not only you, but also the lender’s investment in the property. Without coverage in place, you won’t be able to finalize your loan. That means shopping for insurance should happen alongside your mortgage process, not as an afterthought.

2. Your Premium Can Affect Your Monthly Payment

Your monthly mortgage payment often includes escrow for property taxes and homeowners insurance. That means your insurance premium directly affects how much you’ll pay each month. Shopping around for quotes can help you find the right coverage at a rate that fits your budget.

3. Coverage Should Match Your Needs, Not Just Your Loan

A standard policy typically covers your home’s structure, personal belongings, and liability if someone gets hurt on your property. But not all homes (or buyers) have the same needs. For example:

Location matters: Homes in flood zones or tornado-prone areas may require extra coverage.

Valuables matter: Jewelry, electronics, or collections may need additional protection.

Your lender requires a minimum level of insurance, but you should consider whether that’s enough for your peace of mind.

4. Deductibles Are Part of the Equation

Your deductible is the amount you pay out of pocket before insurance kicks in. Choosing a higher deductible can lower your premium – but it also means you’ll need to be prepared with cash on hand if something happens. First-time homebuyers should balance affordability now with the ability to cover unexpected costs later.

5. Review Your Policy Annually

Insurance isn’t just a one-time decision. As your home’s value changes or your financial situation evolves, your coverage should too. Many homeowners only look at their policy when it’s time to renew, but making a habit of reviewing it each year can save you money and provide better protection.

Homeowners insurance is more than just another step in the mortgage process – it’s a long-term safeguard for your home, your finances, and your future. By understanding how it ties into your loan and monthly payment, you can make confident choices that keep both your lender and your household protected.

About Ruoff Mortgage

At Ruoff Mortgage, we understand that buying a home is one of life’s biggest moments – not just as a financial decision, but a personal one. For more than 41 years, we’ve proudly helped families turn their dreams into reality. From our roots in northeast Indiana to now serving homebuyers throughout the Midwest, our focus has stayed the same: delivering exceptional service rooted in care, speed, and community. With an average 15-day clear-to-close time, our team is here to make your journey to homeownership as smooth and stress-free as possible. When you're ready to take the next step, we’re here to walk with you, every step of the way.