Updated: January 20, 2025 | by Jennifer Martinez, Licensed Insurance Agent & Personal Finance Writer | Reading Time: 15 minutes
Quick Answer: The cheapest home insurance for first time buyers typically costs between $80-$150 per month, depending on your location, home value, and chosen coverage. According to the Insurance Information Institute, first time buyers can save 25-40% by comparing at least five quotes, bundling policies, and taking advantage of new homeowner discounts. The key is shopping smart before your closing date—not just accepting your lender’s first recommendation.
Finding the Cheapest Home Insurance for First Time Buyers: My Personal Journey
When my husband Daniel and I bought our first home in Austin, Texas, three years ago, I thought I knew everything about insurance. After all, I’d been a licensed insurance agent for almost a decade. But standing in our cramped apartment kitchen with a stack of closing documents and a two-week deadline, I realized finding the cheapest home insurance for first time buyers was more overwhelming than I’d anticipated—even for someone in the industry.
Our mortgage broker had casually mentioned we’d need proof of homeowners’ insurance before closing. No big deal, I thought. Then the quotes started coming in. The first company quoted us $3,400 annually for a modest 1,800 square foot home. I nearly choked on my morning coffee. That was almost $300 a month—more than our car insurance and renter’s insurance combined.
What followed was an intense week of phone calls, online comparisons, and late-night research. By the time we closed on our little blue house on Maple Street, we’d found a policy for $1,680 annually—saving over $1,700 compared to that first quote. That experience taught me that finding the cheapest home insurance for first time buyers isn’t about cutting corners on coverage. It’s about knowing where to look and what questions to ask.
The National Association of Insurance Commissioners reports that homeowners’ insurance rates have increased 12% nationally over the past year alone. That makes smart shopping more important than ever for first time buyers already stretched thin by down payments and closing costs.
For a broader understanding of insurance fundamentals, check out our comprehensive guide to homeowners insurance basics.
Average Home Insurance Cost for First Time Buyers: What to Really Expect
Before hunting for the cheapest home insurance for first time buyers, you need to understand what’s normal. The average home insurance cost for first time buyers varies dramatically based on location, home characteristics, and coverage choices. Knowing these benchmarks helps you recognize a good deal when you see one.
Average Home Insurance Cost for First Time Buyers by State (2025)
- Lowest cost states: Hawaii ($500), Vermont ($700), Utah ($800), Idaho ($850)
- Moderate cost states: California ($1,200), Arizona ($1,400), Virginia ($1,300)
- Higher cost states: Texas ($2,100), Colorado ($2,400), Louisiana ($2,800)
- Highest cost states: Florida ($4,200), Oklahoma ($3,800), Kansas ($3,200)
According to Bankrate’s 2025 insurance study, the national average home insurance cost for first time buyers sits around $1,984 annually, or about $165 per month. However, this number can be misleading because it includes both luxury homes and starter homes in the calculation.
When my colleague Rebecca purchased her first condo in Phoenix last spring, she was quoted $1,800 for a policy. After we ran through my checklist together during a coffee break, she found comparable coverage for $1,150. The difference? She’d been looking at policies with unnecessary add-ons and hadn’t mentioned her security system. Understanding the average home insurance cost for first time buyers gave her the confidence to negotiate.
Factors Affecting Your Average Home Insurance Cost
| Factor | Impact on Premium | What You Can Control |
|---|---|---|
| Location/ZIP Code | High (30-50% variation) | Choose neighborhood carefully |
| Home Age & Condition | Moderate (10-25%) | Upgrade electrical, plumbing, roof |
| Deductible Amount | Moderate (15-30%) | Choose higher deductible if possible |
| Coverage Amount | High (direct correlation) | Don’t over-insure; match rebuild cost |
| Credit Score | High (20-40% in most states) | Improve credit before buying |
| Claims History | High (can double premiums) | Avoid small claims on renter’s policy |
The Consumer Reports insurance buying guide emphasizes that understanding these factors helps first time buyers make informed decisions rather than just accepting whatever quote comes their way.
Learn more about coverage factors in our detailed guide to factors affecting home insurance rates.
Cheapest Homeowners Insurance Companies: Who Offers the Best Rates?
Finding the cheapest homeowners insurance companies requires looking beyond just the premium number. You want companies that offer low rates AND pay claims fairly. During my years helping clients find coverage, I’ve developed a clear picture of which companies consistently offer the cheapest home insurance for first time buyers without sacrificing quality.
Top Cheapest Homeowners Insurance Companies for 2025
- USAA: Lowest rates available—but only for military families
- State Farm: Competitive rates with excellent claims handling
- Erie Insurance: Very affordable in the 12 states where available
- Auto-Owners: Often 15-20% below competitors in Midwest
- Nationwide: Strong discounts for bundling and smart home devices
- Travelers: Good rates with excellent coverage options
- Allstate: Competitive when bundled with auto insurance
Cheapest Homeowners Insurance Companies by Region
According to J.D. Power’s 2024 Home Insurance Study, the cheapest homeowners insurance companies vary significantly by region. What’s affordable in Ohio might be expensive in Florida. Here’s what my research and client experience has shown:
Regional Leaders Among Cheapest Homeowners Insurance Companies
| Region | Top Affordable Companies | Average Savings vs. National Carriers |
|---|---|---|
| Northeast | Erie, Plymouth Rock, Amica | 15-25% |
| Southeast | State Farm, Farmers, Southern Farm Bureau | 10-20% |
| Midwest | Auto-Owners, Erie, Farm Bureau | 20-30% |
| Southwest | State Farm, CSAA, American Family | 15-25% |
| West Coast | CSAA, Wawanesa, Mercury | 10-20% |
Last Thanksgiving, my cousin Marcus in Indiana mentioned he was paying $2,400 for home insurance on his first house. I almost dropped my turkey leg. After recommending he get quotes from Auto-Owners and Erie—both among the cheapest homeowners insurance companies in the Midwest—he switched and saved $800 annually. Same coverage, different company, significant savings.
The NerdWallet insurance analysis confirms that regional carriers often outperform national brands on price while matching or exceeding them on customer satisfaction. This is crucial knowledge for finding the cheapest home insurance for first time buyers.
For more company comparisons, see our comprehensive home insurance company reviews.
Best Home Insurance for First Time Buyers: Balancing Price and Protection
The best home insurance for first time buyers isn’t always the absolute cheapest option. It’s the policy that provides adequate protection at a price you can afford—especially when you’re still recovering from down payment sticker shock. I’ve seen too many new homeowners learn this lesson the hard way.
My friend Amanda saved $400 annually by choosing the cheapest quote she found. Six months later, a burst pipe caused $35,000 in water damage. Her bargain policy had a $5,000 water damage sublimit buried in the fine print. She ended up paying $30,000 out of pocket. The best home insurance for first time buyers would have covered the full amount for just $33 more per month.
Best Home Insurance for First Time Buyers: Essential Coverage Features
- Dwelling coverage: At least 100% of replacement cost (not market value)
- Personal property: Minimum 50-70% of dwelling coverage
- Liability protection: At least $300,000 (consider $500,000)
- Water backup coverage: Often sold separately—get it!
- Replacement cost vs. actual cash value: Always choose replacement cost
- Loss of use: Covers temporary living expenses if displaced
Finding the Best Home Insurance for First Time Buyers on a Budget
According to Forbes Advisor’s insurance analysis, the best home insurance for first time buyers combines competitive pricing with solid coverage and responsive claims handling. Here’s how to find that balance:
Best Home Insurance for First Time Buyers: Company Recommendations
| Company | Best For | Key Advantage |
|---|---|---|
| Lemonade | Tech-savvy buyers | Easy app, instant quotes, fast claims |
| State Farm | Personal service seekers | Local agents, strong claims record |
| USAA | Military families | Lowest rates, best satisfaction |
| Erie Insurance | Midwest/East Coast buyers | Low rates, excellent service |
| Amica | Long-term planners | Dividend policies, top-rated service |
For comprehensive protection strategies, explore our guide on understanding home insurance coverage types.
First Time Home Buyer Insurance Discounts: Your Secret Weapons for Savings
Understanding first time home buyer insurance discounts is the fastest path to finding the cheapest home insurance for first time buyers. These discounts can stack together, potentially cutting your premium by 30-40%. The challenge is that insurance companies don’t always advertise them prominently—you have to ask.
First Time Home Buyer Insurance Discounts: Complete List
- New home discount: 5-15% for homes less than 10 years old
- Bundle discount: 15-25% when combining home and auto
- Security system discount: 5-20% for monitored alarms
- Smart home discount: 5-10% for water sensors, smart locks
- Claims-free discount: 10-20% for no prior claims
- New customer discount: 5-10% for switching companies
- Loyalty discount: Grows over time with same insurer
- Mortgage-free discount: 5-15% if no mortgage (rare for first buyers)
- Profession-based discount: Teachers, engineers, first responders
- Age 55+ discount: Available from many carriers
Maximizing First Time Home Buyer Insurance Discounts
The ValuePenguin discount analysis found that most homeowners only claim 2-3 discounts when they could be getting 5-7. Here’s how I helped my sister Emily maximize her first time home buyer insurance discounts last fall:
Emily had already accepted a quote for $1,850 when she called me for a second opinion. I asked her a series of questions: Did she mention her smoke detectors? (No.) Her deadbolt locks? (No.) That she was bundling with her car insurance through the same company? (She hadn’t asked if that qualified.) Her college degree? (Some insurers offer graduate discounts.)
After a 20-minute phone call with her insurance agent armed with the right questions, her quote dropped to $1,420—a savings of $430 annually. Those first time home buyer insurance discounts were sitting there waiting to be claimed. She just didn’t know to ask.
Pro Tip: When getting quotes for the cheapest home insurance for first time buyers, use this phrase: “What discounts am I eligible for that we haven’t discussed yet?” Agents are often trained to offer discounts only when asked. The Insurance.com database lists over 30 potential discounts across major carriers.
For bundle savings strategies, see our article on how to bundle home and auto insurance effectively.
Compare Home Insurance Quotes: The Smart Way to Find the Cheapest Option
Learning to compare home insurance quotes effectively is the single most valuable skill for finding the cheapest home insurance for first time buyers. It’s not just about getting multiple numbers—it’s about comparing apples to apples and understanding what you’re actually buying.
When Daniel and I were house hunting, I set up a spreadsheet to compare home insurance quotes from seven different companies. What shocked me wasn’t just the price variation (from $1,680 to $3,400), but how different the coverage was at each price point. The cheapest initial quote actually had half the liability coverage and no water backup protection.
How to Compare Home Insurance Quotes Properly
- Gather at least 5 quotes: Include 2-3 national carriers and 2-3 regional companies
- Use identical coverage amounts: Same dwelling value, deductible, and liability limits
- Check for hidden sublimits: Water damage, jewelry, electronics caps
- Verify replacement cost coverage: Not actual cash value
- Ask about all discounts: Apply the same discounts to each quote
- Review company ratings: Check AM Best, J.D. Power, and NAIC complaints
- Read sample policies: Before committing, review the actual policy language
Best Tools to Compare Home Insurance Quotes
The Policygenius comparison platform and The Zebra are two excellent resources to compare home insurance quotes from multiple carriers simultaneously. These free tools save hours of calling individual companies.
Quote Comparison Checklist
| Coverage Element | What to Check | Why It Matters |
|---|---|---|
| Dwelling Coverage | Matches rebuild cost | Under-insurance leaves you paying |
| Deductible | Same across all quotes | Higher deductible = lower premium |
| Liability Limit | At least $300K recommended | Protects assets from lawsuits |
| Water Backup | Included or additional cost | Common claim for basements |
| Personal Property | Replacement cost, not ACV | ACV pays depreciated value only |
When you compare home insurance quotes, remember that the goal is finding the cheapest home insurance for first time buyers that still provides adequate protection. A $500 annual savings means nothing if you’re exposed to $50,000 in potential losses.
Coverage Essentials: What First Time Buyers Actually Need
Before obsessing over finding the cheapest home insurance for first time buyers, understand what coverage you actually need. Your mortgage lender will have minimum requirements, but those minimums might leave you dangerously underprotected.
During my first week in our new house, our neighbor’s tree crashed through their roof during a thunderstorm. They’d skimped on coverage to save $20 a month. The repair cost $45,000. Their policy covered only $25,000 due to a low dwelling limit. That image of them standing in their driveway, looking at the tarp-covered hole, haunts me every time someone asks me to just find “the cheapest option possible.”
Standard HO-3 Policy Components Explained
- Coverage A (Dwelling): Your home’s structure—should equal 100% replacement cost
- Coverage B (Other Structures): Detached garage, shed, fence—typically 10% of Coverage A
- Coverage C (Personal Property): Your stuff—typically 50-70% of Coverage A
- Coverage D (Loss of Use): Hotel/rental costs if displaced—typically 20% of Coverage A
- Coverage E (Personal Liability): Legal protection—recommend at least $300,000
- Coverage F (Medical Payments): Guest injuries—typically $1,000-$5,000
The Claims Journal research indicates that 60% of American homeowners are underinsured by an average of 27%. This is especially dangerous for first time buyers who may not realize that their purchase price doesn’t equal their rebuild cost.
For detailed coverage explanations, visit our guide to understanding HO-3 home insurance policies.
Costly Mistakes to Avoid When Shopping for Cheapest Home Insurance for First Time Buyers
In my years helping first time buyers find affordable coverage, I’ve seen the same mistakes repeatedly. Avoiding these pitfalls is just as important as finding the cheapest home insurance for first time buyers in the first place.
Top Mistakes When Seeking Cheapest Home Insurance for First Time Buyers
- Insuring for market value instead of replacement cost: Your rebuild cost may be 20-50% different from the purchase price
- Choosing the lowest deductible: A higher deductible significantly lowers premiums
- Forgetting flood and earthquake coverage: Standard policies exclude these
- Not reading the policy before buying: Surprises happen at claim time
- Assuming all policies are the same: Coverage varies dramatically between companies
- Waiting until the last minute: Rush decisions often cost more
- Not asking about discounts: You might qualify for savings you don’t know about
When I closed on my first house, I almost made mistake number one myself. My real estate agent kept talking about the “purchase price” when discussing insurance. Thankfully, a conversation with a contractor friend revealed that rebuilding my 1960s ranch would cost 40% more than I paid—labor costs, current material prices, and code upgrades add up quickly. Getting the coverage right is essential for any cheapest home insurance for first time buyers search.
The Mortgage Reports first-time buyer guide emphasizes that insurance mistakes are among the most common—and most costly—errors new homeowners make. Take your time, even when closing deadlines feel pressing.
Frequently Asked Questions About Cheapest Home Insurance for First Time Buyers
How much should first time home buyers expect to pay for insurance?
The average home insurance cost for first time buyers ranges from $1,200 to $2,500 annually, depending on your location, home value, and coverage choices. First time buyers of modest homes in low-risk areas can often find policies under $100 per month. High-risk areas like Florida or coastal Texas may see costs of $300+ monthly.
When should I start shopping for home insurance?
Start shopping for the cheapest home insurance for first time buyers as soon as your offer is accepted—ideally 2-3 weeks before your closing date. This gives you time to compare home insurance quotes from multiple companies without feeling rushed. Your mortgage lender will require proof of insurance before closing.
Is it worth bundling home and auto insurance?
Bundling typically saves 15-25% on both policies and is usually a worthwhile investment. However, always compare the bundled price against separate policies from different companies. Sometimes two separate policies from specialized carriers beats a bundle from one company—especially for first time buyers still building their insurance relationships.
What credit score do I need for cheap home insurance?
In most states, a credit score above 700 qualifies for the best rates on the cheapest home insurance for first time buyers. Scores between 600 and 700 see moderate increases, while scores below 600 can increase premiums by 40-100%. California, Massachusetts, and Maryland restrict credit use in insurance pricing.
Does my lender choose my home insurance company?
No—you have complete freedom to choose your own home insurance company. Lenders may recommend companies or offer partnerships, but you’re never required to use them. Always compare home insurance quotes independently to find the best deal. Your lender only requires that you have coverage meeting their minimum standards.
How can I lower my home insurance costs after buying?
After your first year, you can lower costs by increasing your deductible, adding security systems, improving your credit score, bundling policies, and shopping for new quotes annually. Many first time home buyer insurance discounts grow over time as you build a claims-free history with your insurer.
Your Next Steps: Finding the Cheapest Home Insurance for First Time Buyers
The journey to finding the most affordable home insurance for first-time buyers doesn’t have to be overwhelming. Armed with the knowledge in this guide, you’re already ahead of most new homeowners who accept the first quote they receive.
Remember the lessons I learned buying my house on Maple Street: shop early, compare home insurance quotes from at least five companies, ask about every discount, and don’t sacrifice essential coverage for a few dollars in savings. The best home insurance for first time buyers balances affordability with genuine protection.
Three years later, our little blue house has weathered hailstorms, a minor water leak, and a neighbor’s tree branch that grazed our fence. Every time something happens, I’m grateful we took the time to find good coverage at a fair price—not just the absolute cheapest option available.
Start comparing quotes today. Your future self—potentially standing in front of unexpected home damage—will thank you for making the effort now.
Ready to Find Your Perfect Home Insurance Policy?
Don’t overpay for your first homeowners insurance policy. Use the strategies in this guide to compare home insurance quotes, claim every first time home buyer insurance discount you qualify for, and secure the protection your new home deserves at a price that works for your budget.
About the Author
Jennifer Martinez is a licensed insurance agent with over 12 years of experience helping families find affordable coverage. Based in Austin, Texas, she specializes in helping first time home buyers navigate the confusing world of homeowners’ insurance without overpaying or under-insuring.
Jennifer holds licenses in 15 states and writes regularly about insurance, personal finance, and homeownership. She purchased her first home in 2021 and draws on that experience to help readers avoid common first-time buyer mistakes.
Connect with Jennifer on LinkedIn or visit the NAIC Consumer Resources for official insurance information.
Cheapest Home Insurance for First Time Buyers: Action Checklist
- Start shopping 2-3 weeks before your closing date
- Get quotes from at least 5 different companies (mix national and regional)
- Compare identical coverage levels across all quotes
- Ask about every discount—new home, bundling, security, claims-free
- Verify you’re insuring for replacement cost, not market value
- Add water backup coverage if you have a basement
- Check company ratings on AM Best and J.D. Power
- Read the policy summary before committing
- Set a calendar reminder to shop again in 12 months
