What is the homeowner's insurance premium on a Loan Estimate?

Updated November 2026 · Every dollar figure is an illustrative example, not a quote

The homeowner's insurance premium in Section F is the first year's policy, paid in full at or before closing because the lender will not fund a loan on an uninsured house. It is commonly $1,200 to $3,000 a year for a typical home and far more in storm, wildfire or coastal areas; you choose the insurer, and the lender's figure is only its estimate.

Where it is on the form

Page 2, Section F, Prepaids, as Homeowner's Insurance Premium (12 months). The same policy's monthly cost also appears in Section G as the escrow deposit and on page 1 inside Estimated Escrow. If the home is in a flood zone, a separate flood insurance premium appears on a line of its own.

Illustrative rangeOften $1,200–$3,000 a year; much more in high-risk areas

The premium depends on the home's rebuild cost, its location, the roof, the deductible and the insurer. Coastal Florida, parts of Texas, California wildfire zones and tornado alley can run several times the national norm, and in some of those places coverage is hard to find at any price. Get real quotes early; the lender's figure is a placeholder until you do.

Paid toYour insurance company, often directly by you before closing

Can you shop for it?Yes

Can it change at closing?No tolerance limit: It is an estimate and can move either way

Why a full year up front: the policy has to be in force the moment the loan funds, and insurers bill annually. If you have an escrow account, the lender then collects one-twelfth each month in Section G so that next year's renewal can be paid from escrow. The first year is paid twice over in a sense: once here, and once as it builds up in escrow for year two.

Lenders' estimates are often low in high-risk areas, which makes the cash to close and the monthly payment on page 1 look better than they will be. A real quote from your own insurer, in hand before you lock, is the fix.

Can you shop for it?

Entirely. You pick the insurer and the policy, subject to the lender's minimums (coverage at least the loan amount or the rebuild cost, a deductible within its limits, the lender named as mortgagee). This line is one of the few on the form where shopping can save hundreds a year, every year.

Can it change between the Loan Estimate and closing?

No tolerance limit. It is your policy with your insurer, so the lender's estimate is just that. The real premium replaces it on the Closing Disclosure. That is not a loophole; it is the lender admitting it does not set your insurance price.

Questions to ask the lender

What figure did you use for the premium, and is it a quote or a guess?
What are your minimums: coverage amount, deductible, named mortgagee?
Is flood insurance required on this home, and is it on the estimate?

Red flags

A premium estimate well below what insurers actually quote in the area, which hides part of your real monthly payment.
A home in a Special Flood Hazard Area with no flood premium anywhere on the form.
A lender that insists you use its affiliated insurance agency.

Questions people ask

Why do I pay a year of homeowner's insurance at closing?

Because the policy must be in force when the loan funds and insurers bill a year at a time. If you have an escrow account, you also start paying one-twelfth a month toward next year's renewal in Section G.

Can I choose my own homeowner's insurance?

Yes, always. The lender sets minimums for coverage and deductible and must be named as mortgagee on the policy, but the insurer and the policy are yours to pick.

Can the homeowner's insurance premium change at closing?

Yes, freely. It is your policy with your insurer, so the lender's estimate carries no tolerance limit, and the actual premium is what appears on the Closing Disclosure. Get a real quote early so the estimate is close.

Only have one quote? That's the problem.

Tell us the rate and the fees you were quoted. It is free, there is no credit pull, and nobody calls you. We check whether another lender beats it, fees included. Or start with the free Loan Estimate checker, which reads your rate, points and Section A and flags anything out of the ordinary.

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Every dollar figure on this page is illustrative. Fee ranges are general observations, not a survey or a quote, and are not a loan offer, approval, commitment to lend, or Loan Estimate. Your actual rates and fees depend on qualification with lenders, your state and county, and your closing date. The tolerance rules described are the federal TRID rules in general terms; the rule itself and your own Loan Estimate and Closing Disclosure decide how it applies to your loan. comparemyloan does not negotiate with lenders, lock rates, or take loan applications.