To find the best home insurance, you will need to compare quotes. This is how you do it.
You don’t do this every day. You’re more likely to keep your policy for at least one year after you have chosen a policy. It is important to compare home insurance quotes before you purchase.
It can be difficult to understand how to compare home insurance quotes. You don’t just need to consider price, you also want a policy that meets your needs in case of disaster. Here are some things you should know before you start shopping.
What is a quote for home insurance?
A homeowners insurance quote gives you an estimate of how much you will pay for your policy. The quote is based on many factors such as:
- The size of your home.
- Your neighborhood.
- If there is a fire station nearby.
House insurance prices vary greatly between companies because each company has its own formula. Comparing rates from multiple companies will increase your chances of getting the best homeowners insurance rate.
A home insurance quote is just an estimate and may not reflect the final price. An inspector might visit your home to determine if you require a different level of coverage. This could change the price.
What is included in a home insurance quote
Your homeowners insurance quote will be affected by many factors, including the size and contents of your home. These factors are weighed differently by different companies, so an insurer may be more accommodating about your credit score or backyard trampoline.
These are just a few of the many factors that could affect your homeowners insurance quote.
- Cost of rebuilding. Your home insurance premium will likely be higher if you have to rebuild your house from scratch. Cost of local construction, labor and material costs will all affect the cost of rebuilding. It is important to consider the size of your house. A 1,000-square foot house will typically cost more to replace than one measuring 5,000 square feet.
- Your home’s age. Because older homes are more expensive to insure, the components might have degraded over time.
- Types of materials. Brick and stone homes are more affordable to insure than wooden houses, which can be flammable.
- Security features. Home insurance rates can be reduced by installing alarm systems, smoke detectors and deadbolt locks. They reduce the chance of theft and damage.
- Home improvements. Remodeling the kitchen, adding a deck or making other improvements to your home can increase the price of the rebuild.
- Local fire protection. You’ll be able to get home insurance quotes that are cheaper if you live near a fire station and hydrant.
- Your area is at risk of natural disasters. In areas that are prone to earthquakes, hurricanes, wildfires, and other natural hazards, home insurance quotes can be more expensive.
- Crime rates in the neighborhood. Your home insurance rates may rise if there are many burglaries in your area.
YOU AND YOUR STUFF
- Your credit score. A home insurance quote in most states can be more expensive for those with poor credit. According to insurers, people with bad credit are more likely than others to file claims. In Massachusetts, Maryland, and California, insurance companies can’t consider credit when setting homeowner’s insurance prices.
- Your pet. If your dog is aggressive, house insurance can be expensive. Your liability insurance may have to cover you if your dog bites another person and they sue. Some companies might not offer coverage.
- Your possessions. You may require additional coverage if you have valuable jewelry, expensive musical instruments, or other valuables. This will likely increase the cost of your house insurance.
- Your trampoline or backyard pool. These items could increase your home insurance premium due to the potential for injury. You could be held responsible if someone is injured using these items, regardless of whether you gave permission.
- Your wood-burning stove. Your stove may be considered a fire hazard by insurance companies, especially if it was not professionally installed or does not meet code requirements.
- Your home-based business. You may need additional coverage for your home-based business, such as a homeowners policy, or a business owner policy that covers business-related inventory, equipment, and liability.
- Previous claims. Insurers may consider you a risk if you have filed multiple claims in the past and charge higher premiums.
What is homeowners insurance?
There are many types of homeowners insurance policies. Some include coverage automatically, while others you can add. These are known as endorsements and riders. You can choose how much coverage you need and what optional features you would like when you receive a homeowners insurance quote.
This is how different coverage types work.
Standard homeowners insurance coverage
The six main types of coverage that are included in a standard homeowners insurance policy are:
Your dwelling coverage covers damage to your home and any attached structures, such as a porch, deck, or porch. If your home is damaged or destroyed, you need sufficient dwelling coverage. The cost of rebuilding is not the property value of your home or its tax assessment. This would consider factors such as the value of the land, and the desirable location. For a rough estimate of the rebuilding costs, multiply the square footage of your home by local construction costs per sq. foot. An insurance agent or an insurer can help you determine these costs and calculate the replacement cost.
You can repair or replace any other structures on your property such as storage buildings or swimming pools. The coverage is usually 10% of the dwelling coverage amount. If you have expensive structures to replace, you can purchase additional coverage.
Personal property coverage covers your personal belongings. It pays to replace or repair them if they are stolen or damaged due to an event that is not covered by your homeowners insurance. The coverage typically covers 50% to 70% of your dwelling coverage. You can purchase additional coverage for more expensive items, such as jewelry or art. However, you might need to have them appraised.
Additional living expenses coverage pays for the cost of living in another place while your home is being fixed. The coverage is usually about 20% of the dwelling coverage amount.
If you cause injury or property damage, liability coverage covers you. The typical amounts range from $100,000 to $500,000. An umbrella insurance policy can add more coverage, which may be important if your circumstances put you at risk of being sued.
No matter the fault, medical payments coverage covers you for treating someone injured on your property. It pays for the cost of treating an injured person while they are away from their home by paying the homeowner, family member, or pet. The typical limits range from $1,000 to $5,000.
Options for homeowners insurance policies
When you request and compare home insurance quotes for your home, you will need to choose from a variety of policy options.
- Your deductible. Your deductible is the amount that you pay out-of-pocket before your insurer covers any damages. It’s usually $500 to $2,000 for homeowners insurance. If you are certain that you can afford the deductible, you might consider increasing your deductible to lower your premiums.
- Coverage for earthquake, flood and windstorm. Standard homeowners insurance does not cover flood damage or earthquakes, and windstorm coverage may be limited in hurricane-prone areas. You may be interested in optional coverage if you live near these areas. Flood insurance is required for some properties in high-risk zones.
- Your belongings are covered by replacement cost coverage. Standard homeowners insurance policies will not pay for the replacement of old items with newer ones unless you upgrade.
- Guaranteed or extended replacement cost coverage for your house. Standard policies will not pay more than the dwelling coverage limit for your home. Extended replacement cost coverage, which will pay more for repairs, will be extended up to a certain limit. Guaranteed replacement cost coverage will cover the entire cost.
What information is required to obtain a quote for homeowners insurance?
Insurers will ask you questions about your home and personal details when you begin looking for home insurance quotes. Here are some important information that you should have.
DETAILS ALL ABOUT YOU
- Name, date of birth, marital status, and contact information.
- Your address and the length of time you have lived there.
- The number of people living with you.
- No matter if you have a dog or another pet.
- You can start a business from home, or you can have a child-care company.
- You can choose to have additional coverage for your home and computers, or jewelry.
DETAILS ON YOUR INSURANCE
- If you have had a policy in the past, please provide the name and dates of your most recent homeowners’ insurance company.
- If you have filed any claims within the last five years.
- When you would like your homeowners insurance coverage start.
- What coverage you need. The declarations page on your existing insurance policy can be a good starting point. You can view the coverage and additional features that you have, but you should be open to making changes. It’s smart to review your needs before you compare home insurance quotes.
DETAILS ON YOUR HOUSE
- The year that the house was constructed. You may be asked if the house is older and if it has been renovated in recent years.
- The house’s square footage, the number of stories, and the style (e.g. ranch or colonial).
- It doesn’t matter if the exterior walls were built with brick, stone, or wood.
- The age and material of the roof, including whether it is made of metal, slate, or shingles.
- The number of bathrooms and bedrooms.
- It doesn’t matter if there are smart home technology features, such as a fireplace, garage, or sprinkler system.
- How to heat your home.
- It does not matter if there are detached structures such as a gazebo, toolshed, or other similar items.
- Whether the mortgage is on the house.
- Distance to nearest fire station or fire hydrant.
You can often find the information you need online from your local tax assessor’s offices, even if you don’t know the date or square footage of your house. You can search for “tax assessor” and “property record” along with the name of your city or county. Agents and insurers may also have access to information about building material, size, and other details once they have the address of the house.
How to get homeowners insurance quotes
There are many options available to you when you want to get homeowners insurance quotes.
- Get home insurance quotes online and by phone.
- You can work with a “captive agency” who represents one company.
- You can work with an independent agent, or an insurance broker.
No matter which path you choose to take, you should get at least three quotes to ensure you are getting a fair price. Compare home insurance quotes to ensure that each policy offers similar coverage, deductibles, and endorsements.
Online or over-the-phone, get home insurance quotes
Online homeowners insurance quotes are available from many companies. If you are satisfied with your quote, you may be able to complete the purchase online. You can get a quote online, but some insurers will send you an agent to complete the quote over the telephone.
You can adjust your coverages and get quotes directly from the insurer when you purchase homeowners insurance without an agent. However, there are some drawbacks.
Agents of captive insurance
A captive agent can provide homeowners insurance quotes. A captive agent is an employee of one insurance company such as Allstate, Farmers Insurance, or State Farm.
Agents are there to help you choose the right policy for you. They also provide quotes. When you purchase a policy, the agent receives a commission (or a percentage of your premium). Captive agents may also be paid a salary by the insurance company, which is not possible for other agents.
Independent brokers and insurance agents
A quote from an independent broker or agent is a great way to explore your options for home insurance without being restricted to one company.
Independent agents and brokers can work with many insurers to offer homeowners a variety of policies and options. Independent agents may work for a commission and will try to give you the best service or point you in the right direction.
Independent brokers are different from independent agents because they charge a brokerage fee and must disclose commission rates. This transparency allows customers to see exactly what the broker makes from their business.
What is the cost of home insurance?
According to the National Association of Insurance Commissioners’ most recent report, homeowners insurance costs $1,211 per year on average. This is based on 2017 data.
Depending on the cost of rebuilding your home, your home insurance quote might be higher than or lower than this average. Here are the NAIC analyses of annual premiums for different coverage amounts. Also, the percentage of policies within that value range.
The average homeowners insurance rate also varies by location. There are different insurance regulations in each state, and the costs of construction vary across the country. Therefore, homeowner’s insurance prices are not always in line with home values.
According to the U.S. Census Bureau 2014-2018 American Community Survey (the most recent available), New Mexico and Georgia have $166,800 median home values. However, the average home insurance premium in Georgia is 20% lower than that in New Mexico.
This is a state-by–state map that will give you an idea about what to expect in your locality.
How to get homeowners insurance at a low price
It is a great way to get the lowest home insurance rates. You are responsible for protecting your home and making sure it is covered. However, you won’t be able to compare the prices of home insurance quotes to determine if you’re getting a good deal.
You can also try these other tips to save on homeowners insurance:
- Your deductible should be increased. You can reduce your premiums by agreeing to pay more for a possible claim. According to the Insurance Information Institute, a deductible increase of $500 to $1,000 can reduce premiums by as much as 25%.
- Bundle auto and home insurance policies. Numerous insurers offer both coverage, and discounts can be obtained if you purchase home and car insurance from the same company.
- Ask for discounts. Although price breaks are common, they can vary between companies so make sure to verify. For example, you might be eligible for discounts for being a smoker, retiring early, purchasing a home, signing up to automatic payments, or being free from claims.
- Make your home safer. Discounts can be obtained by installing smoke detectors, storm shutters, and deadbolt locks. If you make improvements to your heating, plumbing, and electrical systems, you may be able to get lower home insurance rates.
- Credit repair. A good credit record can result in lower home insurance rates for most states. To improve your credit score, pay your bills on-time and keep your debts as low as possible.
- Drop coverage you no longer need. Check your policy documents to make sure you’re not paying for coverage that you don’t use. You can save money if you have extra coverage on a high-end computer that you bought a few years back but it is no longer worth the cost.
- Eliminate risky features. Your home insurance premiums can be significantly increased by having a backyard trampoline, treehouse, or swimming pool. These items can be dangerous and costly, so you should consider removing them.