I bought a new home, (foreclosure from the bank). I bought it quickly, and didnt have time to shop around for home owners insurance so I went with the first company who I called. I just wanted to see if this average, or too high, because if it is, I can start shopping around now. I bought a 227K foreclosure. The appraised value is 280K. I put 75K down on the house. my mortgage insurance per year is 1030 dollars. 6 bedroom/4 bathroom 3 acre home, 2400 sq feet. Is this high/average? Should I bother shopping around?

$500-$5000+ per year depending on the size, replacement cost.and location.

It sounds pretty high.. I might shop around. But what's your annual percent? Location has a lot to do with it too.. Check your area... for a mean expense.

--Rob USMC

You don't mention where you are. Rates are by zip code.

Also, you do not insure a home for market value. You insure it for whatever it will take to rebuild it if it burns to the ground. And in this economy, you often need more insurance than what you paid for the house and the land it's sitting on.

In my area of California, a 2400sf home without a lot of upgrades such as granite counter tops, hardwood floors, etc will need at least $150 to $200 per square foot of insurance. The nicer the features, the higher that figure will climb.

As to the shopping around part, your agent did a fair amount of work to put the policy in place quickly. Give them the courtesy of waiting until the year is running out before shopping around. Definitely give your current agent a call for a policy review so you understand your coverages.

If you're looking to get the bill down, usually putting home and auto together gives a big discount on both.

You mentioned that your mortgage insurance is $1030, but you didn't say how much the homeowner insurance was. $1030 is shockingly high for mortgage insurance.

The rate is not based on how much money you put down or how much money you owe. Insurance is based on how much it costs to rebuild a home.

$1,030 is not that bad if your in California. A couple ways to save money is to raise your deductible to maybe $3,000 or more. A second way is to have your auto insurance with the same company that carries your homeowners insurance to get the most discounts.

Mortgage insurance is different than homeowners insurance. Are you talking about homeowners insurance?

First of all, how much you paid for it, or what it's assessed for, completely doesn't matter. You insure your house to get it FIXED if something happens, which means, cost to FIX or REBUILD the house - not "assessed value" or "foreclosed value". Mortgage cost is completely irrelevant.

You don't mention at all, how much coverage you have, what kind of policy you have, or where the house is located - but odds are, if you have your house insured for LESS THAN $200 per square foot - you could end up with a serious problem come claims time.

You probably want replacement cost coverage on house and contents. You'd probably do well with "building ordinance or law" coverage if the house is more than ten years old. If you have a basement, "backup of sewers and drains" is a really really good idea.

Average cost depends on the location, age of house, protection class, construction, etc. Not knowing ANYTHING about the coverage or the house besides the very little amount you put in, it's impossible to say if you have a good price or not.

The ONLY way to know if you have a good deal, is by shopping around.