Finding a homeowner’s insurance policy that fits your needs and budget may seem like a daunting task. So many products are available in the marketplace today that it can be difficult to know where to start. This guide will help you compare home insurance policies and carriers to find the option that provides you with the coverage you need.
Compare Homeowners Insurance Quotes
If you’re looking for insurance coverage for your home, getting quotes online is an easy way to start. Here is a list of some of the top homeowner insurance carriers and the coverages that they provide.
Originally founded in 1931, Allstate has grown to become one of the country’s largest home and auto insurers, making it easy to bundle different insurance policies with one company. It also offers a large selection of home insurance discounts and an impressive online quoting system that make shopping for coverage easy. Read our Allstate home insurance review to learn more about its coverage.
Amica took the top award in the 2015 J.D. Power Homeowners Insurance customer satisfaction survey, proving customers are highly satisfied with their policy offerings, customer service and claims. Their online quote tool also allows users to customize the details of their home insurance quote more than most homeowners insurance companies. Read our Amica home insurance review to learn more about its coverage.
This company specializes in creating custom-tailored home insurance policies that are specifically designed for policy owners who live in residences that have special risks. It also serves policy owners who have been unable to obtain coverage with other agencies or had their policies cancelled.
One of the top 10 home insurers in the country, Nationwide offers all the standard homeowner insurance coverage you’d expect from a major company, along with some extra coverage options like the Better Roof Replacement, which potential customers may find appealing. Read our Nationwide home insurance review to learn more about its coverage.
With a name that conjures a feeling of security, Safeco was founded in 1923 and was purchased in 2008 by Liberty Mutual, which remains its parent company. Safeco offers a comprehensive range of property and vehicle insurance products, including four home insurance packages, and its local independent agents in all 50 states can help tailor your policy to your home’s unique needs. Read our Safeco home insurance review to learn more about its coverage.
Occupying one-fifth of the U.S. homeowner insurance market, State Farm is the nation’s largest insurer. The company’s robust line of products includes property, vehicle, life and health insurance as well as financial services such as banking, annuities and retirement savings. State Farm also offers coverage that other companies won’t, including for manufactured homes, small businesses, farms and ranches. Read our State Farm home insurance review to learn more about its coverage.
How Much Does Homeowners Insurance Cost?
The price you’ll pay for your home insurance policy will depend on several factors, including the amount of coverage you wish to carry, whether it will cover events such as floods or earthquakes and other specific provisions in the policy that can raise or lower the premium.
Visit our national map to see the average cost of homeowner insurance in your state.
Compare Homeowners Insurance Quotes
Now that you have some idea of what a policy will cost you, it’s time to compare home insurance quotes to see which one best fits your needs and budget. Get quotes from several different companies to see what’s available. Remember, rates may vary substantially depending upon the carrier, the location of your home and other factors.
What You Should Compare
With so many insurance carriers advertising their affordable rates and coverage options, you’re sure to wonder which carrier is going to have the right policy to fit your needs. You can find much of the information you need about policies and rates online, but then how do you compare the policies to be sure you’re selecting the right one?
One of the most important things to keep in mind as you shop is that the policies you’re comparing should have identical characteristics, so you can get an accurate comparison. Here are some of the critical factors to consider:
Deductible
This is the amount that you’ll pay out of pocket if you have a claim. There are usually several levels of deductible to choose from in any given policy, so make certain that you select the same deductible amount for each quote in order to make a fair comparison.
Coverage limits
Most mortgage lenders require that homeowners carry enough coverage to at least equal their home loan amounts, but you’ll want to be sure that you purchase enough to cover the cost of rebuilding your home in the event of disaster. Many experts suggest that may even be more than your mortgage amount, since it should reflect current construction costs. Read about your coverage options in our homeowner insurance guide.
Customer service
It’s important to consider the kind of service you can expect from each homeowners insurance carrier. These are the people you’ll be dealing with in the event of a disaster. First, think about your own experience in collecting quotes. Did any of the service you received stand out as excellent? Were any of the carriers difficult to reach? Did they consider your unique home and personal needs? Also, consult the U.S. Home Insurance Study produced each year by consumer research firm J.D. Power, which evaluates and ranks home insurers on a number of important customer service measures. You should also check the National Association of Insurance Commissioners’ (NAIC) Consumer Information Source to see the home insurers’ complaint records.
Financial strength
This is one of the most important factors to consider when buying homeowners coverage. If you need to make a claim in the event of a disaster, you need to know that your insurance carrier can pay out on your claim as quickly as possible so you can repair your home. Consult the A.M. Best Consumer Insurance Center to see the financial strength rating of any home insurance carrier you’re considering. Obviously, the higher the rating, the greater the company’s financial strength. Remember that a lower-rated carrier may offer a cheaper policy, but it also has a greater chance of becoming financially insolvent.
Common claims
Find out what claims homeowners have commonly filed in your area. The NAIC says that this is one of the criteria home insurers consider in setting premiums because it provides clues as to the types of problems your home is likely to face. For instance, a high rate of flood or storm damage in your area indicates that this may be a frequent danger and something you’re likely to file a claim on down the road. It also may indicate to you what additional coverage — such as flood insurance — you should purchase. Many insurers provide details about commonly filed claims in your area on their websites, or their agents can share this information with you.
Endorsements
It’s crucial to compare existing endorsements, which are amendments to your homeowners policy that specify coverage for specific circumstances. An example would be an endorsement that excludes coverage for an old roof.
What You Need to Know to Get a Home Insurance Quote
There are several pieces of information that you will need to provide an insurer in order to effectively shop for your policy. The list includes:
- The type of home, including whether it’s a single- or two-story home, its architectural style (bungalow, ranch, colonial, etc.) and what type of foundation it’s on
- Physical details such as square footage; age of the house and roof; type, size and condition of attached structures such as decks; number of bathrooms; materials used in construction of the roof and outer walls; and whether the home is located on flat or sloped ground
- Its current market value
- The amount of your home loan (many lenders require that your insurance cover at least the full loan amount)
- The general condition of the home’s interior and exterior, as well as whether any of it currently is damaged or in need of repair
- How many people live in the home
- Whether any business is conducted in the home (particularly if it’s in child care)
- The number and type of pets that you have
- Whether the home includes safety features such as burglar alarms or sprinkler systems
- Whether you have certain recreational items such as swimming pools, hot tubs or trampolines on the property
- Whether the home is located in a designated flood plain
- The report from an inspection of the house by a professional inspector
- A CLUE (Comprehensive Loss Underwriting Exchange) report that details the history of insurance claims filed by all previous homeowners. Many insurance carriers require this report in order to see what types of damage the house may already have suffered, such as water damage. This document enables the carrier to deny coverage in some cases.
- The amount of liability coverage you would like to have
- Whether you own any valuable items for which you would like to purchase separate coverage
- The total value of all of your other possessions
- Where you currently hold existing insurance policies (you may be eligible for discounts for bundling policies)
- Your credit score
Here We Go Again! When You Might Need a New Home Insurance Quote
Just because you have found a good homeowner insurance policy doesn’t necessarily mean that you can (or should) keep it for life. Certain events may require you to update or replace your coverage. The events that can trigger such changes include:
- Getting married or divorced
Merging or dividing households will not only result in a need to update who’s named on the current policy, but also it may mean adding or reducing coverage for additional possessions and people in the home. You may also need to add or remove policy floaters for individual items.
- Buying a second home
Before you buy that dream vacation home with a view of the ocean, do your homework as to how much another homeowner insurance policy will cost you. Losses from hurricanes or avalanches can drive up the price of coverage.
- Making substantial improvements or renovations to your home
If you add a new room onto your home or do extensive remodeling, then you may increase the value of your home beyond the current amount of protection that you carry. Review your policy to see whether it is still enough to pay for the full replacement value of your home at its new, higher market value. Adding external structures such as a garage or gazebo also will raise the value of your property. And you may need to increase the coverage on your personal possessions because of the additional furnishings that you put into your new space.
- Acquiring new, high-value possessions
If you finally save enough money to buy that dream entertainment system that you’ve always wanted, review your personal possession coverage to make sure that its replacement cost is included in your coverage in the event of loss.
Money-Saving Tips for Homeowners Insurance
There are several things that you can do to lower the cost of your homeowner insurance, including:
The deductible is the amount of money you’ll pay out of pocket in the event of disaster. If you can afford to pay a higher deductible, it may result in a lower premium. For example, changing your $500 deductible to $1,000 may save you as much as 25 percent. A $2,500 deductible could net you even bigger savings. Just be sure that it’s an amount you could feasibly absorb if catastrophe were to strike.
Look over your coverage every year to make sure that you’re not paying extra for things that you don’t need, such as a policy floater for a family heirloom that has declined substantially in value or an item that you have sold or given away.
If you’re on a government plan, consider getting coverage through a private company. A private insurer may offer more competitive coverage and rates, even if you live in a high-risk area.
Some insurers consider your credit score when calculating your premium because it’s a measure of the financial risk you may represent. A higher credit score reflects a lower risk and a potentially lower premium.
Remember that although a disaster may damage or destroy your home, the land will still be yours and won’t need to be rebuilt. Subtract the value of the land that your home sits on from the total value of your home when you get a quote.
Find out whether your employer offers a group homeowners insurance plan. Group coverage may also be available through fraternal or other organizations that you belong to. It may provide you with a better deal than what you’re currently getting. You may also be eligible for discounts if you are affiliated with certain professional, alumni or employer groups.
Many homeowners insurance companies offer discounts for bundling more than one policy (home and auto, for instance). You may also get a discount for being a first-time home buyer or for adding certain safety features or alarm systems to your home. Read more about common discounts on our homeowners insurance guide.
How to Find the Best Home Insurance Company
Isaac McCabe
Expert
Isaac McCabe is vice president and agency director at Financial Strategies, Inc., a full-service independent insurance brokerage in Leavenworth, Kansas. McCabe’s years of experience includes working with consumers to find and purchase homeowners insurance coverage. Below he shares his professional insights for selecting the right homeowner insurance policy.
What features or qualifications should you look for in a home insurance company?
You want one with good financial strength, a good track record of customer service and prompt claim response, the broadest possible coverages, and agents or brokers that can proactively guide you as to what you may or may not need. You also should make sure that the company has had experience in the home’s market area.
Is it better to shop for home insurance online or to use an agent?
You may see some products online that are not available to brokers. But there definitely are some dangers to shopping online as well because, in many cases, you don’t know what you don’t know. A broker can help clients to spot dangers or errors in coverage selections that they would otherwise be unaware of. For example, the cheapest policies are usually cheapest for a reason, but the customer may not realize that. A buyer should probably talk to an agent or broker first, even if he or she ends up buying online.
Any red flags a consumer should look for when shopping for a home insurance company?
Look for a special coverage form called “all peril” coverage, as opposed to “named perils,” which list exactly what perils are covered on the policy and generally are more restrictive.
Companies that do not offer this should probably be avoided. Also look for exclusions in key areas of coverage, such as for water damage. And beware of low limits on policies. Your coverage should be able to cover the current replacement cost of your home.
Make sure that the replacement of possessions provision will cover the replacement cost of all of your possessions and not just a percentage of them.
Beware of higher-than-average complaint ratios, and listen for what brokers have to say about certain carriers. Companies with financial ratings below A level should probably be avoided in most cases.