Why do I need homeowners insurance? How much does this cost annually? Homeowners insurance is not only required by your lender, but it provides protection and security for one of the biggest assets you own. Until you are able to provide your lending institution with a homeowners insurance policy, you will not be able to achieve a clear to close on your mortgage. Even if you are able to purchase your home with cash, it is a wise decision to insure your home, as there are many instances which could always cause you troublesome situations. Depending on coverage options and other scenarios, your policy will generally run between $650.00 and $1,000.00 on an annual basis. This fee should always be calculated into your overall monthly home expenses (along with P/I and Taxes). To help you with your search for the best policy, we have provided a few homeowners insurance resources which can be found below.