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Cheap Homeowners Insurance, No Deposit: How to Get Low-Cost Homeowners Insurance With No Down Payment (2021)
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Edited by John Leach
Last Updated August 5, 2022
Wouldn’t it be nice to pay less for home insurance? Saving money on homeowners insurance seems like a paradox. The buying process is muddled: Why does home insurance cost so much? How do you know you’re getting a fair price? What’s this deposit for?
We get it. This article will walk you through the purpose of a home insurance deposit and the alternatives available to you. We promise this to be pain-free.
Don’t forget to use Insurify to browse customized free quotes and explore your policy options. The perfect plan for you and your home has never been easier to find!
Home Insurance Deposit 101
A home insurance deposit is your good-faith payment for a home insurance policy. It’s the money you pay upfront— technically, once you’ve agreed to your insurance rate and are ready for underwriting. But this money contributes to your premium payment.
Most homeowners pay their premiums in twelve installments over a year. So in a way, each payment is like a deposit toward the full cost of annual coverage. What’s often called a deposit is simply the first payment for that policy.
What a Deposit Pays For
A home insurance deposit ensures that your home insurance coverage starts on a specific date. If you’re a new homeowner, that date will be on or before the closing date of your purchase. If this is for a new policy on an existing home, it begins the day your current homeowners policy ends. Or another day you set with your carrier.
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Avoiding the Deposit
Because the home insurance “deposit” is really just an installment toward your policy, there isn’t a way around paying that portion of your policy. You do have two other options:
Pay for your premium in full.
Pay your insurance through your mortgage lender.
The first option does mean that you’ll pay more upfront. However, you’ll likely pay less annually as most insurance companies offer a pay-in-full discount. But remember: that premium is good for one year. You’ll need to pay it again, so be sure to plan for that in your annual budget.
Your second alternative is a little more complicated, so let’s take a closer look.
Frequently Asked Questions About Cheap Home Insurance With No Deposit
For many, bundling insurance products results in big savings. Many insurance carriers offer discounts as much as 15 percent for multi-policy discounts., including: Progressive State Farm Farmers Allstate Liberty Mutual Travelers Nationwide USAA And it doesn’t end with your car, your child’s renters insurance policy can also be bundled. If it makes sense for you and your budget, there’s no reason your car insurance company can’t also be your home insurance company.
Flood insurance works like home insurance. You will pay for a portion of your annual premium when you agree to the policy. So while it may be called a deposit, this payment is more like paying the first bill for home insurance. Flood insurance differs in that it is backed by the National Flood Insurance Program, even if you pay the premiums with your insurance company.
The cheapest homeowners insurance depends on several factors. These are: Where you live The condition of your property Your credit score and credit history Safety features in your home Coverage limits Insurance claims history The discounts available to you Because everyone’s profile will be different, no one insurance provider is the cheapest for everyone. That’s why it’s so important to review several home insurance quotes before you buy. And that’s why policyholders should review insurance quotes often, at least every twelve months. As your credit score improves, your premium could be lower. But your insurance company isn’t going to lower it for you as a courtesy. Wouldn’t that be nice?
Cheap Home Insurance Without a Deposit: The Bottom Line
If you want the affordable homeowners insurance, you’ll have to put in a little work by comparison shopping. Luckily that little work comes with a big payoff. You can easily save hundreds every year by simply checking if a competitor offers a lower rate.
Now that is nice.
Extra lucky for you is that you can use Insurify to shop, compare, and choose the homeowners insurance policy right for you!
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Data scientists at Insurify analyzed over 40 million auto insurance rates across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. With these insights, Insurify is able to offer drivers insight into how their car insurance premiums are priced by companies.
Insurance Writer
J.J. Starr is a health and finance writer with a background in banking, lending, and financial advising. She holds a Series 6, FINRA, and life insurance licensure and a master's degree from New York University. Through her writing, she strives to use her decade of experience to help consumers make sound financial choices. Connect with J.J. on LinkedIn.
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