If you are shopping for home insurance, reviewing quotes from several companies is a good practice. But what should you look for in home insurance quotes? How do you find the right home insurance policy for your needs? Bankrate’s team of insurance experts can help you learn how to compare homeowners insurance quotes and what you can expect during the process.
Quotes for homeowners insurance are not hard to obtain and are free. The Insurance Information Institute (Triple-I) recommends you get a minimum of three home insurance quotes when you are looking for the best rates and most robust coverage. You might be surprised at how much the estimates vary from company to company for the same property.
Home insurance premiums by company
One of the first considerations when shopping for home insurance coverage is the price of a policy. In the United States, the average cost of a homeowners policy is $1,312 per year for $250,000 in dwelling coverage. Your homeowners insurance rates will vary based on a number of factors, including the replacement value of your home, your claims history and what company you choose.
Because every property insurer has a different rating system for your home and personal property, having a few providers give you a home insurance quote might help you find a competitively priced policy. The companies listed below are the largest in the nation by market share. USAA, Travelers, Nationwide, Progressive, Auto-Owners and Erie have average rates that are less than the national average.
|Company||Average annual premium for $250K dwelling coverage|
Understanding home insurance quotes
What is a homeowners insurance quote? Home insurance quotes, also called property insurance quotes, are an estimate of what coverage types and discounts will be included on a home insurance policy from a particular company, as well as how much that coverage will cost. Every company uses its own formula to determine your quote based on your perceived level of risk. Factors like your claims history, the amount of coverage you need and what discounts you qualify for will affect your premium. A quote is only an estimate of your final cost. Your premium could change when your policy is underwritten.
What home insurance includes
Each homeowners insurance policy is a package of several different coverage types. Your dwelling coverage, for example, is designed to cover property damage to the structure of your home, whereas your personal property coverage is designed to pay for your damaged or destroyed belongings.
Determining how much coverage you need is an important step in making sure a quote fits your situation. Most insurance companies have a tool to determine an estimated rebuilding cost of your house. Several other coverage types on your quote — your other structures coverage, personal property coverage and loss of use coverage — are generally percentages of your dwelling coverage amount. Your liability coverage also deserves some consideration. You can generally purchase coverage in amounts as low as $100,000, but you may want to increase your limits to provide you with more financial protection.
Home insurance policy types
When it comes to home insurance, several policy types are available. Understanding the differences in these policy types, which are represented by the letters “HO” followed by a number, might help you choose the option that best fits your needs. However, many homeowners insurance companies only sell HO-3 and HO-5 policies.
Each policy type comes with a different kind of coverage. Named peril coverage only covers your home and belongings for the risks specifically named in the policy, such as fire, theft and vandalism. Open perils coverage means that anything not specifically excluded is covered. Open perils coverage provides financial protection from a broader range of situations.
HO-3 home insurance policies tend to be the most common type of policy, as they can be a mix between solid coverage and an affordable price. HO-5 policies are also relatively common, but due to their broader coverage, they usually cost more. Below is a table showing several home insurance policy types and what kind of perils are covered for each coverage.
|Policy type||Dwelling||Other structures||Personal property||Policy summary|
|HO-1||Named perils||Named perils||Named perils||Only covers 10 named perils. Not offered by many companies due to limited coverage|
|HO-2||Named perils||Named perils||Named perils||Covers 16 named perils. Also not frequently offered.|
|HO-3||Open perils||Open perils||Named perils||Most common home insurance form.|
|HO-5||Open perils||Open perils||Open perils||Broadest home insurance coverage available.|
In addition to a policy having named or open perils coverage, you may have the option to choose between actual cash value (ACV) and replacement cost coverage for your dwelling, personal property or roof. ACV coverage means that depreciation will be taken out of a claim settlement, whereas replacement cost coverage will pay you the cost to replace your damaged or destroyed property minus the deductible.
How much does a homeowners insurance quote cost?
You should never have to pay to receive an insurance quote — property insurance companies offer them for free.
When it comes to premiums, the average cost of home insurance is $1,312 per year for $250,000 in dwelling coverage. Your premium will vary based on a number of factors, so it is likely that your premium will be different from the average.
Information needed to get a quote
Getting a quote, whether online or from an insurance agent, is not difficult. However, it does take a little time and there is information that you will need to provide to get the most accurate quote possible:
- Personal details: You will need to provide your name and date of birth to get a quote. If you own your home with a spouse, family member or anyone else, you will need their information as well.
- Property details: A carrier will need your address, including your ZIP code. Companies might be able to look up additional information, but you may want to be prepared with your home’s construction year, the age of the roof and other home systems, like your HVAC, and details of any custom features.
- Coverage needs: An insurer will review your history as a homeowner, including who your most recent insurer was (if you have been insured before) and the details of that policy. Although you can typically adjust your coverage options, property insurers will want to know what they are starting from with your previous policy, including what sort of endorsements you had and about any claims filed on your property.
How to compare quotes from home insurance companies
Even if you have a specific property insurer in mind when seeking coverage, getting quotes from other companies to see if you might be able to save money can be beneficial. Premium is not the only factor to think about, but budget is often one of the biggest considerations when shopping for insurance. Here are the steps to take to compare home insurance quotes and assess companies:
- Think about your needs: What are you looking for from a company? Do you value highly-rated customer service? Do you need certain coverage options? Do you want a company that has local agencies? Knowing what you want and need can help you narrow down your choices.
- Get quotes from several companies: Once you know what you are looking for in a company, you can request quotes from several home insurance providers that might fit your needs. You can often get quotes online or by phone, or you might be able to visit a local insurance agency.
- Review each quote for accuracy: Review your quotes to make sure each quote is accurate and that the quotes are as similar as possible. Although your dwelling coverage amount may vary based on each company’s valuation tool (as well as your other structures coverage, personal property coverage and loss of use coverage because these are percentages of your dwelling coverage), ensuring that each quote is for as similar coverage levels as possible can help you more equally compare your options.
- Consider customer service: Check out consumer advocate groups like J.D. Power to get a sense of what other policyholders think about the company. Knowing that you will get fast, efficient and effective service when you need it most is an important consideration.
- Check financial ratings: Finally, you may want to look at companies like AM Best and Standard & Poor’s (S&P), both of which assess a company’s financial stability. Insurance companies may also feature these scores on their websites. The more financially stable an insurance carrier is, the more likely it is that the company will be able to pay out claims.
When in doubt, working with a licensed insurance agent can be incredibly helpful. An agent can help guide you when choosing coverage and policy features.
Frequently asked questions
What is the best home insurance company?
Since every homeowner has unique insurance needs, there is no one company that is right for everyone. This is why understanding what you need from your property insurer and obtaining quotes from multiple companies can be helpful. This way, you can compare each company’s premium, coverage offerings, customer service and financial strength to help you find the best home insurance for you.
Can I get a home insurance quote before purchasing my new home?
Yes, you can. In fact, most mortgage companies will require you to have your homeowners insurance policy in place on your closing date, so starting the process of getting quotes before your closing can help keep things moving. Once you have found a home to purchase, it might be a good time to start the home insurance process by getting quotes from multiple companies.
How much home insurance do I need?
A number of factors contribute to how much home insurance coverage you need. The first is the cost per square foot to rebuild or repair a home in your region. Your insurance agent should be able to provide you with this information, as can an experienced construction professional.
Your dwelling coverage should be enough to cover rebuilding your home from the ground up if your home were destroyed by a covered peril. You should also consider if you need to purchase any optional coverage types, like water backup coverage or identity theft. Finally, consider your liability exposure. If you host guests often or if you have a pool, trampoline or swing set, you may want to increase your liability coverage.
Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on 40-year-old male and female homeowners with a clean claim history, good credit and the following coverage limits:
- Coverage A, Dwelling: $250,000
- Coverage B, Other Structures: $25,000
- Coverage C, Personal Property: $125,000
- Coverage D, Loss of Use: $50,000
- Coverage E, Liability: $300,000
- Coverage F, Medical Payments: $1,000
The homeowners also have a $1,000 deductible and a separate wind and hail deductible (if required).
These are sample rates and should be used for comparative purposes only. Your quotes will differ.