[cromag]

Just a warning, but do everything in your power to be responsible for your own homeowner's insurance. You will be required to get it, but if the bank takes care of it the bank is the insurance company's customer, not you.

I have always fought for this. One of my brother's decided to let the bank handle it because he didn't want the hassle. A few years later he lost his home to a particularly impressive gas explosion. He was standing in the driveway at the time with an employee of the gas company, having smelled gas. He said it was like something from a Bruce Willis movie -- flames shot out of every window and the walls literally bowed outward before collapsing. Fortunately, no one was hurt. The house burned to the foundation, taking his SUV with it (it was in the garage).

In addition to his full time job as a University professor, he operated a very successful scientific photography business. He lost all of his inventory of film (slides from the 70s through the 90s) and most of his digital images. The insurance company offered to replace his two Nikon DSLRs and assorted lenses with Nikon Coolpix cameras (with built-in zoom lenses). For his business suits, purchased in New York (he's way more conscious of his appearance than I am, but it's necessary for his business) they based replacement costs on off-the-rack jackets and pants at J.C. Penney. For the value of his lost work, they suggested he find his work in publications and "scan them back in."

Their "ace in the hole" was that he would have no place to live and be willing to settle quickly at a (very, very) substantial loss. Fortunately, he was able to get inexpensive (but tolerable) living quarters (he's single). The insurance company dragged the case out for a couple of years. At one point the judge apologized to my brother for their tactics (but noted that it was legal). When they finally used up their maximum legal delays (more than a years worth) they met him at court and, as proceedings were about to begin, gave him a check that was very nearly what the damages actually were. He was still out his legal fees, temporary housing, inconvenience, etc.

The bank got their money back right away, of course, and had no interest in his legal fight.

As a first time buyer you might have to let the bank handle the insurance, but fight to get that responsibility back on an annual basis.