Updated: August 12, 2025
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Buying home insurance involves determining your coverage needs, gathering personal and property details, comparing quotes from at least three insurers, finalizing the policy and signing the contract.
Home insurance costs are influenced by factors such as your home’s location, age, construction type, claims history, credit score, coverage limits and deductibles.
You can save on home insurance by bundling policies, raising your deductible, improving home safety, maintaining good credit and shopping around regularly.
Buying homeowners insurance starts with determining how much coverage you need. Explore optional coverages, compare quotes and choose a policy that fits your needs and budget. Below are the five simple steps to buying a home insurance policy:
The amount of home insurance you need depends on your home’s rebuild cost, the value of your possessions and your financial situation. If you have a mortgage, your lender will also have minimum coverage requirements to meet. The kind of home you live in, such as a condo, mobile home or standalone house, may also have specific coverage requirements.
Dwelling Coverage | Estimate the full cost to rebuild your home (not its market value) using a replacement cost calculator or contractor estimate. |
Other Structures Coverage | Set at typically 10 to 20% of dwelling coverage, but you can adjust this based on the value of detached structures like garages, sheds, or fences. |
Personal Property Coverage | Create an inventory of belongings and estimate replacement costs; keep in mind that high-value item like jewelry, art or electronics are not covered. |
Loss of Use (Additional Living Expenses) | Choose an amount that would cover rent, food, and extra expenses for 6 to 12 months if your home is uninhabitable. |
Liability Coverage | Select at least enough to cover your total net worth and potential legal costs; many opt for $300,000 to $500,000 minimum. |
Medical Payments to Others | Typically $1,000 to $5,000 per person; higher limits if you frequently host guests or have risk factors (e.g., pool, pets). |
Home insurance providers offer add-on coverages, otherwise known as endorsements, to cover certain risks not covered by standard home insurance policies. While add-ons vary from provider to provider, below are a few common endorsements:
Flood Insurance | If you live in or near a flood zone or an area with frequent heavy rainfall. |
Earthquake Insurance | If your home is in an earthquake-prone region. |
Sewer/Drain Backup Coverage | If your property has a basement or older plumbing systems. |
Scheduled Personal Property Coverage | If you own high-value items like jewelry, art or collectibles. |
Home Business Coverage | If you run a business or store equipment at home. |
Extended Replacement Cost | If construction costs in your area are volatile or trending upward. |
Identity Theft Protection | If you want coverage for expenses related to restoring your identity. |
When choosing personal property coverage, you’ll need to decide how your insurer calculates payouts after a loss. The right option depends on your budget and how much you want to be reimbursed.
Before applying for homeowners insurance, gather key details about yourself and your property to get the most accurate quotes. Insurers use this information to assess risk and determine your premium.
Personal Information
Property Information
Comparing quotes from multiple insurers can significantly reduce your homeowners insurance cost, which costs an average of $2,614 annually nationwide. Rates vary based on factors like your home’s age, location, credit history and coverage limits, so gather quotes from at least three companies and consider bundling with other policies for extra savings.
Here’s how to choose a good home insurance provider:
Choose a provider with strong ratings from agencies like AM Best or Standard & Poor’s. This ensures they can pay claims even after large-scale disasters.
Review satisfaction scores from sources like J.D. Power and read real customer feedback. A responsive and helpful provider can make the claims process far less stressful.
Select an insurer that lets you adjust coverage limits, deductibles and add-ons to fit your needs. This avoids overpaying for unnecessary protection while covering potential gaps.
Compare discounts for bundling, installing safety devices or keeping a claims-free record. These can significantly reduce your premium without lowering coverage.
If in-person help matters to you, choose a provider with nearby agents. They can assist with complex claims or policy adjustments.
Once you’ve chosen the best policy for your needs, review and confirm all details before signing. In addition to your coverage limits, deductibles and any add-ons, make sure to verify:
Review your policy documents carefully, ask questions about anything unclear, and only sign once you’re confident it fully protects your home and belongings.
List everyone with a financial interest in the property to ensure full protection. The primary homeowner should always be listed as a named insured, along with any co-owners, spouses or mortgage co-signers.
Family members living in the home may also need to be included to avoid gaps in liability coverage. Making sure the right people are listed on your policy helps protect their financial interests and ensures claims are handled properly if something happens.
After confirming all policy details, carefully review the final contract, double-check that all coverage terms, limits, deductibles and endorsements match what you agreed upon and ensure your personal and property information is correct. Once you sign, keep a copy of your policy documents somewhere safe, digitally and in print, so you can access them quickly if you need to file a claim.
While cost is important when shopping for homeowners insurance, the cheapest homeowners insurance quote isn't always the best choice. MoneyGeek recommends also considering coverage options, customer satisfaction ratings, financial stability and customer reviews to make sure you're getting reliable protection, not just a low price.
If your homeowners insurance is canceled or not renewed, start by finding out why and resolving the issue. In some cases, you can get your old policy reinstated. If that is not possible, shop around for a new provider and make sure the original problem is addressed to avoid repeat cancellations. As a last resort, consider a state-run FAIR Plan, which offers limited, basic coverage when traditional insurers will not provide a policy.
Home insurance protects you financially from a variety of risks to your home and belongings. The table below explains the main types of coverage included in a standard policy.
Pays to repair or rebuild your home if it is damaged by covered perils. | |
Covers detached structures on your property like garages, sheds or fences. | |
Reimburses you for the cost of replacing or repairing belongings damaged or stolen due to covered events. | |
Pays for temporary housing, meals, and other costs if your home becomes uninhabitable due to a covered loss. | |
Covers legal costs and damages if you are found responsible for injury or property damage to others. | |
Medical Payments to Others | Pays for medical expenses if a guest is injured on your property, regardless of fault. |
While the covered perils for a home insurance policy vary, here are the commonly covered perils:
Several key factors influence how homeowners insurance premiums are calculated, and understanding them can help you find better coverage at a lower price. Here’s a quick look at what insurers consider:
Homes near coastlines, in high-crime areas or far from fire protection services usually cost more to insure. Areas prone to natural disasters also see higher premiums.
Larger homes and those built with expensive materials cost more to replace (and insure) than smaller, simpler properties.
Older homes or those needing major repairs are riskier for insurers, which can drive up premiums.
Homes with modern electrical, plumbing, security systems or disaster-resistant improvements often qualify for discounts.
Choosing a higher deductible lowers your premium but increases your out-of-pocket costs if you file a claim.
A history of frequent claims can make you a higher-risk customer, leading to higher premiums.
In many states, a higher credit score can result in lower insurance rates because insurers see it as a sign of financial responsibility.
Knowing how these factors affect your rate can help you make smarter choices when comparing policies and planning your insurance budget.
Home insurance rates can vary widely, and many homeowners pay more than necessary. Taking a few smart steps can lower your premium without sacrificing coverage.
Combine your home insurance with auto, life, or other policies from the same provider to qualify for a multi-policy discount. Bundling often delivers the biggest savings compared to other discounts.
Opt for a higher deductible to lower your monthly or annual premium. Just make sure you can comfortably pay that amount out of pocket in case of a claim.
Install smoke detectors, security systems, deadbolt locks and other protective devices. Insurers often reward these upgrades with discounts because they reduce the risk of claims.
Many insurers use credit-based insurance scores to set rates. Paying bills on time and keeping debt levels low can help you qualify for better premiums.
Compare quotes from at least three insurers every year or two. Rates and discounts change, so switching could save you hundreds of dollars.
Many insurers offer a variety of discounts that can help lower your premium without reducing coverage. Knowing which ones you qualify for can lead to significant savings. Here are some common discounts:
Multi-Policy (Bundling) | Save by purchasing home and auto or other insurance policies from the same provider. |
Home Safety Features | Installing smoke detectors, burglar alarms, or sprinkler systems can reduce risk and earn discounts. |
Claims-Free History | Maintain a history with no recent claims to qualify for lower rates. |
Loyalty Discount | Staying with the same insurer for several years can result in reduced premiums. |
New or Renovated Home | Homes that are newly built or recently updated may cost less to insure due to lower risk. |
Good Credit | A strong credit score can lead to better rates in states where credit is considered. |
Paperless Billing | Opting for electronic statements and payments can earn small savings. |
Pay-in-Full | Paying your annual premium in one lump sum often costs less than monthly payments. |
Buying homeowners insurance is not just about finding the cheapest rate. It is about securing a policy that fully protects your home, belongings, and liability risks. By knowing your coverage needs, comparing multiple providers, and carefully reviewing the details, you can balance affordability with robust protection. The time you invest in the process can save you money and provide peace of mind for years to come.
Homeowners insurance is vital to financially protecting your home, but the buying process involves many decisions. Here are answers to common homeowners insurance questions.
How much homeowners insurance you need largely depends on the value of your home and personal possessions. Generally, you should purchase the necessary coverage for rebuilding your house and replacing all your possessions.
We recommend purchasing extended replacement cost coverage if you want to insure your home for more than it's worth to cover replacement and repair costs. This option covers a certain percentage beyond the value of your home.
Some factors that help insurers determine the value of your home include your home’s square footage, location, building materials, age and major upgrades or additions. While a more valuable home will typically come with a higher insurance premium, it also means that your home is more likely to be fully covered in the event of a total loss.
How long it takes to get homeowners insurance depends on the property's complexity and the insurer's process, ranging from a few days to a week. The process involves getting a quote, submitting an application and undergoing an underwriting review. Starting early and having your property details, personal information and financial documents ready speeds up approval.
Why Trust MoneyGeek
At MoneyGeek, we base our homeowners insurance recommendations on real-world data from official state insurance filings across all 50 states, supplemented with insights from Quadrant Information Services. This allows us to compare providers fairly and highlight the best options based on price, coverage and reliability.
How We Selected Home Insurance Companies
We analyzed insurance premiums and policy offerings using Quadrant’s comprehensive pricing database. Our review focused on both standard homeowners insurance packages and extended coverage options for homeowners with higher-value properties.
Homeowner Profile for Rate Comparisons
To ensure accurate rate comparisons, we created a sample homeowner profile with the following characteristics:
Coverage Levels Used in Our Analysis
Unless otherwise noted, we based our quotes on the following standard coverage amounts:
To assess coverage options for more expensive homes, we also reviewed policies modeled with:
This approach helped us evaluate which insurers offer strong choices for both typical homeowners and those needing higher protection levels.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
