The cost of homeownership is always tricky because potential buyers tend to forget to look beyond the monthly mortgage. This is especially important given today’s uncertain interest rate environment. There are taxes, homeowners insurance, closing costs, and, depending on the type of buyer, private mortgage insurance and homeowner association fees. Once a buyer adds it all up, the higher costs can prohibit them from going through with the purchase.

Today, with low inventory and therefore high listing prices, the cost of homeownership remains at a record high. “Because of lifestyle changes during COVID, people moved away from large cities and caused a surge in home buying in new areas,” says Tom Kriby, vice president of client development and partnerships at Westwood Insurance Agency. “Home prices were further driven up because of interest rates and inflation.” However, experts say there are ways to help lower the cost to aid potential buyers, through affordable home insurance policies.

One way to help find more affordable insurance is to work with an independent agency who has access to multiple insurance companies and can help shop around for different policies. That’s an advantage for buyers, who benefit from a wide selection of products and pricing.

The savings vary depending on the part of the country, but Kriby says it could be 30% or more in Florida or Texas. Not only that, he says these days it’s been harder for people in those parts of the country to even secure insurance in time for their closing date on their own, which makes the builder-insurance agency relationship even more appealing.

Builders who have worked with agencies such as Westwood are able to show the insurance costs up front to potential buyers, rather than late in the process. It not only can save the buyer more money on their insurance, but also time and energy spent trying to figure out what the best policy would be for their particular home. Agencies like Westwood can work with the builders who provide house details, such as roofing materials, fire safety systems and distance to the nearest fire hydrant, saving the buyers the legwork and helping builders close on time.

“We've already done the pre-underwriting on that house, because through our connection with the builder we know what house they're buying and the details of the floorplan. We don't have to ask them numerous questions,” Kriby says. “We ask them a few basics: Do you have dogs? Is there a pool? Do you have a trampoline? It's really just about liability. And then that helps the builder and their finance team or their loan officers because they don't have to worry about the closing table. Insurance is secured early in that process.”

By locking in insurance policies earlier, the loan officers can take care of debt-to-income ratios up front and allows customers to sometimes qualify for even more or allow for upgrades that customers weren’t planning on initially. In recent months, Kriby says customers can even buy rates down because they have the extra money on hand to do so, giving builders added value to their customer relationships. But most of all, easing the headache of finding affordable homeowners coverage makes the buying process much more efficient and eases the stress for the buyer.

“Insurance is secured early in that process. The homebuyer doesn't have to worry about anything,” Kriby says. “So all they have to do is find a moving van and really move in.”

For more information, visit Westwood Insurance Agency.