Whenever you buy a house, the bank will require that you carry homeowner’s insurance on the property. Even after your home is paid for, you should always carry insurance on your home. This is your largest asset, and it is very important that you protect yourself.
Home insurance is designed to help to cover repairs to your home in the event of an incident such as fire, storm or hail damage, or some other act of God. The bank will want this coverage in place so that the home does not fall into disrepair if something happens. They want to ensure that their asset is protected as long as there is a lien against the property.
Not all home insurance companies are the same. It is important to talk to several different agents and compare the rates and the coverage that they offer. Check ratings for the companies as well. Not all companies will pay as promptly or treat the customers’ the same. Bear in mind that no standard home insurance policy will cover you for flood damage. You will need to purchase a special policy to provide this coverage. You will need to pay the first year up front, and then it will be paid via escrow.