Mortgage lenders require borrowers to carry homeowners insurance not because they are concerned about your home.  They make you pay to protect the asset that guarantees your mortgage.

Homeowners insurance protects a homeowner against loss from fire and other hazards that may impair the value of their home.   An estimate for the cost of homeowners insurance appears on the lender’s Good Faith Estimate when a borrower is approved for financing and the actual amount is shown on the HUD1, which is the closing document that lists all settlement costs.

However, homeowners don’t have to accept the insurance proposed by a lender and they’re well advised to shop around, because better deals often are available.

In an given state, there might be 100 companies writing homeowners insurance in Michigan are competing against the other companies to provide the lowest possible rates, broadest coverage, and best possible service. Competition works best, however, when homeowners take the time to shop for the rates and coverage that are best for them. Online sites like www.shophomeinsurance.net/home-insurance-quotes.html make it easy to compare coverage and rates.

Shopping for insurance is not as hard as it seems. There are two basic questions to ask any agent or company representative: what losses does your policy cover, and what losses are not covered by the policy? In addition to these questions, you should ask what additional coverage you might need given your situation. Most companies provide a number of additional coverages, often called “riders” or “endorsements”. Examples of additional coverage include such things as jewelry, furs, firearms, and backup of sewers and drains.

Most states allow companies to provide discounts on the cost of coverage. Most people will be eligible for one or more discounts with a company. Although agents and company representatives generally will tell you the discounts for which you are eligible, be certain to ask about them. They can save you money.

You should also ask about group discounts that might be available. Membership in some associations or groups might qualify you for a discounted group policy.  You can also save money by insuring your car and your home with the same company

You could b eligible for a wide variety of coverages. Be certain to ask for the coverage that meets your specific needs. When you are deciding which type of policy suits your needs, consider what your house is worth, how much it would cost to replace it, and how much you can afford to spend for insurance.