If youre buying a home with a mortgage its very likely that the banks financing will require homeowners insurance. This protects both you and the bank from a loss should anything happen to the property. However the process of shopping for homeowners insurance can become daunting not to mention expensive. Like any product not all homeowner insurance policies are created equal. So how do you choose your insurance and the correct coverage while also keeping costs down?

First things first. Look at the value of your home. Generally, unless your home value is going to decrease, you want the value of your homeowners coverage to match your purchase price. That base figure also gives you a place to start looking at rate quotes from various companies. There are TONS of online firms that provide user-friendly instant quotes. You can even tweak various parts of your coverage until you get the price and the specifics desired.

Saving Money:

Theres no question that shopping around for homeowners insurance will save you money, but thats not the only trick in the book. There are other ways to keep your homeowners rates down including:

* Upping the Deductible: How much can you personally cover if your house gets damaged in a storm? Really think about this question. Increasing your deductible even by 500 illustrates itself on the bottom line by saving you often more than 20% the annual premium cost! Increasing the deductible to 5,000 brings that figure to close to forty percent savings. That adds up, but you have to remember that your deductible will be out of your pocket before insurance kicks in. Make sure youre comfortable with that level of financial risk.

* Bundling: Many insurance companies offer you price breaks when you buy both auto and homeowners insurance in one place. Warning: this doesnt always save you money, but its worth taking a look.

* Improving features on your home: While this doesnt help at the time of purchase, if you update things like your roof, smoke detectors, locks, and plumbing the cost of your insurance should go down afterward.

* Check at the office: Some companies have an association with a specific insurer to get you discounts.

Insurance at closing:

Be aware that you will need to bring documentation with you to your closing to prove youve purchased insurance. Its suggested that you consider replacement cost coverage so that as your home appreciates in value youre protected against greater losses. Just consider the cost of replacing a dining room table. If the depreciated value of that table is only $75, thats all youll get to buy new without this coverage in place.

Rental Property:

If youre planning on renting this new property to others, you might opt for whats called a Fire policy. This covers very little other than fire and vandalism. In combination with that, have your renters get rental insurance that protects both their property and yours.

Escrow:

You can have your bank pay your insurance out of an escrow account. This gives you the advantage of not having to worry about another monthly bill its all part of your mortgage payment. Having said that, still review your homeowners coverage every year to make sure its still meeting your needs.

The Realtor:

If youre feeling uncertain about navigating the jungle of homeowners insurance on your own many realtors will have information or assistance they can provide. Dont be afraid to ask!