Consumer Guide: Homeowners Insurance Explained

ORLANDO, Fla. — Homeowners insurance can be confusing for anyone, especially new buyers. How much will it cost? What does it cover? How much will the insurer pay if I make a claim? The National Association of Realtors®’ newest Consumer Guide provides essential details to help buyers make informed decisions. The guide explains how coverage works, defines commonly used terms and covers why it’s important.

NAR’s Consumer Guide: Homeowners Insurance is the 17th in the series to help buyers and sellers make informed choices and highlights the value of working with a Realtor. Some of the important questions and answers include:

• What is homeowners insurance?

Homeowners insurance covers you for unexpected losses at your home or property. It can include provisions to repair or rebuild the property, replace assets within the home, cover accidents that happen to you or someone else on the property, or even pay for living expenses if a covered incident forces you to live elsewhere temporarily.

• How much does homeowners insurance cost, and how do I pay it?

The cost of homeowners insurance depends on several factors, including your credit history (in some states), the house’s age, square footage, condition of the property, and location. You may have the option to pay your premium on a monthly, quarterly, or annual basis. Some lenders collect the insurance premium as part of your monthly mortgage payment, place it in an escrow account, and pay the insurer on your behalf.

• Are homeowners insurance premiums tax deductible?

If the property in question is your main home, then your home insurance is generally not deductible. However, people who run a business from their home or those intending to rent out their property may be able to claim a deduction. Additionally, if you suffered a loss to your property caused by a presidentially declared disaster, you may be able to claim a casualty loss deduction. Discuss your unique needs with a tax professional.

Like the other Consumer Guides, the newest one — along with other resources — can be viewed at the NAR website facts.Realtor. The Consumer Guides can also be printed as handouts. Most are available in English and Spanish.

Click the title to view the PDFs:

1. Why Am I Being Asked to Sign a Written Buyer Agreement? Covers recent practice changes when it comes to working with a real estate professional as a home buyer. Spanish
2. Open Houses and Written Agreements: Covers what buyers need to know about touring homes, attending open houses and when a written buyer agreement is needed. Spanish
3. Realtors’ Duty to Put Client Interests Above Their Own: Covers NAR’s strict Code of Ethics that all agents who are Realtors must follow and their ethical duties to act in their client’s best interests. Spanish
4. What Veterans Need to Know About Buying a Home: Covers what NAR is doing to promote access to financing for veterans and highlights the options available to veteran buyers in their homebuying process. Spanish
5. Offers of Compensation: Covers the process and options available for offering compensation to a buyer’s agent and the reasons why this may be a compelling option for sellers to consider when marketing their property. Spanish
6. Negotiating Written Buyer Agreements: Covers what home buyers should expect when negotiating a written buyer agreement with an agent who is a Realtor. Spanish
7. Seller Concessions: Covers the most common types of seller concessions, rules for when and where to offer them and how they can facilitate a successful transaction for both homebuyers and sellers. Spanish
8. Multiple Listing Services (MLSs): Covers what an MLS is and how it aids in the homebuying and home selling process. Spanish
9. Fair Housing: Covers housing discrimination and the Realtor’s role in ensuring fair housing practices are followed. Spanish
10.  Listing Agreements: Covers negotiating and signing a listing agreement with your agent. Spanish
11. Ten Questions to Ask a Buyer’s Agent: Covers questions buyers should consider when selecting an agent and highlights the importance of Realtors. Spanish
12. Ten Questions to Ask a Seller’s Agent: Covers questions sellers should consider when selecting an agent and highlights the important of Realtors. Spanish
13. Buying Your First Home: Covers where to begin and what resources are available to first-time buyers. Spanish
14. Mortgages and Financing: Covers general information about types of mortgages, available financing and concessions. Spanish
15. Steps Between Signing and Closing on a Home: Covers commonly asked questions about the basics of what to expect during the period between signing and closing. Spanish version not yet available.
16. Home Inspections: Covers details about home inspections including who is responsible for the associated costs and what “as is” means regarding a sale. Spanish
17. Homeowners Insurance: Covers essential information for understanding the basics of homeowners insurance coverage.

Also, read the Florida Realtors®’ NAR Settlement Resource Guide webpage for the most up-to-date information about the practice changes, including videos, infographics and new and revised forms and contracts.

All forms are also available on Form Simplicity. As always, the Florida Realtors Legal Hotline is available weekdays to answer your questions at 407-438-1409. Questions may also be submitted online any time by clicking here.

© 2025 Florida Realtors®