What should my deductible be?
Your deductible is the dollar amount the insurance company will deduct from the loss before paying you on a claim. Carrying a higher deductible will generally reduce your annual premium. Thus, lower deductibles will cause your premiums to rise. You will need to determine what amount you are comfortable paying in the event of a claim and make sure that your insurer offers a compatible deductible. This amount can be a flat dollar amount ($500 or $1,000) or a percentage of the coverage amount (often 1%). You might see separate deductibles for perils, like wind and hail or for earthquake coverage. Make sure that you understand how your deductible works before choosing a policy.
How does this get paid?
At closing, you will need to pay the first annual premium, which will protect you for the first 12 months. This amount will be included in the amount of closing costs and pre-paid items, which you will need to bring to closing in addition to your down payment. The title company, acting as your settlement agent, will send the payment to your insurance agent, so please do not pay them directly.