How to Compare Homeowners Insurance Quotes

  • While lower rates can be enticing, it could mean you’re underinsuring your home.
  • Gather quotes from at least three different companies with the same coverage types and amounts based on your needs.
  • Research your company’s financial strength and customer satisfaction to ensure its ability to pay claims.
  • Read more stories from Personal Finance Insider.

Your home is probably your most valuable asset, so you want to ensure you have sufficient insurance coverage. Some homeowners might make the mistake of choosing the least-expensive option without knowing what their policy entails. As a result, their home may be underinsured.

While more coverage often means higher premiums, you can still get the best rate on your home insurance by shopping around and comparing quotes.

What is a homeowners insurance quote?

A homeowners insurance quote estimates how much you’ll pay in premiums. Nowadays, you can get a quote online in just a few minutes. Alternatively, you can speak with an insurance agent who can identify additional programs or discounts you may be eligible for. They can also help you understand all your coverage options so you can make the best choice based on your specific needs.

Another way to gather quotes is by using an insurance comparison website to generate a list of offerings from several different providers. While this expedites the comparison process, doing the extra work and digging deeper by obtaining quotes directly from the insurance companies can help you better understand what goes into the quote for the policy you’re considering.

How to get a quote for homeowners insurance

Having you and your home’s information will make the quote gathering and comparison process quicker. Here are some things you’ll need to get the most accurate quote.

Information you’ll need for your homeowners insurance quote

    1. Personal information: Name, date of birth, martial status, and contact information
    2. Basic information about your home: Address, how long you’ve lived in your there, what type of home you reside in and if its your primary residence, if there’s a mortgage on the property, year it was built, square footage, number of bedrooms/bathrooms, number of stories
    3. How your home was built: Material your building, exterior wall, and roof are made out of, heating or cooling systems, and the type of foundation and construction your home has
    4. Safety: How far your home is from the nearest fire station and fire hydrant, if you have home safety systems
    5. If you need extra coverage: Jewelry and high-end electronics, pets, swimming pools or trampolines, if you operate a business in your home

How to compare homeowners insurance quotes

Once you have your information on hand, you can proceed to obtain quotes and compare them.

“Customers should look for a carrier that offers extensive product and service offerings to meet their unique risk management needs,” says Carolyn Boris, VP and product development manager at the global insurance provider Chub. “They should also look for an insurer that has superior financial strength and a reputation and expertise for excellent claims handling.”

  • Get quotes from at least three insurance companies: the Insurance Information Institute (III) recommends obtaining at least three quotes from different companies. Ask your friends or relatives for recommendations on trustworthy insurance companies as a starting point for your search.
  • Compare policy coverage: Homeowners insurance protects you from financial hardship if you experience a home-related loss. A standard policy will generally cover your dwelling, personal belongings, liability against lawsuits, and additional living expenses against perils listed in the policy. Generally, the more comprehensive your coverage, the more expensive your premiums will be. Ensure that the coverage type is the same across all the providers you compare. In addition, you might want to factor in the cost of additional coverage like flood or earthquake insurance in your quote.
  • Compare deductibles and coverage amounts: You want to ensure your coverage amounts are the same across each insurance company. The more coverage you need, the higher your premiums will be. Your quote may also vary based on your deductible. A deductible is an amount you’ll pay out of pocket before you get compensated for a claim. The lower your deductible, the more expensive your quote will be. Accurately estimating how much homeowners insurance you need to ensure you have sufficient coverage in the event of a loss.
  • Verify personal information: Go back and ensure your personal information is correct. Details like where you live, and your home’s age can have a significant impact on your rates. You may also qualify for additional discounts that you may not be aware of.
  • Check if you’re eligible for any more discounts: Insurance companies usually have a list of discounts on their websites that may not already be included in your online quote. It might be a good idea to get on the phone with an insurance agent to speak about additional discounts or programs you may qualify for.
  • Compare companies’ trustworthiness: It is essential to look at a company’s financial strength via insurance rating agencies. An insurance company’s financial strength determines the ability of a provider to pay claims to its policyholders. A popular independent rating agency is AM’s best. It ranks insurance companies from A+ to F. Anything lower than a B means that a company is not financially stable and may not be able to pay claims at any given moment.
  • Compare customer satisfaction: It’s also a good idea to look into a company’s customer satisfaction. JD Power’s home insurance customer satisfaction survey ranks major insurance companies based on a 1000-point scale.

When comparing quotes, it is essential that you’re getting the right type and right amount of coverage for your needs. Adequate coverage is equally, if not even more important than price. Talking to an insurance agent can help consumers make the most informed decision when it comes to having sufficient coverage at the best price, says Boris.

Homeowners insurance policies are made up of different coverage types that vary based on a homeowner’s unique situation. Assessing your specific needs is key to obtaining the right quote.

* Available as add-on coverage if not part of policy

** Available through the National Flood Insurance Program and approved insurers

*** Windstorm rider may be required in hurricane or tornado areas

Types of homeowners insurance policies

There are several insurance policies to choose from to fit your individual needs. The more comprehensive a policy is, the more expensive your quote will be. According to the III, the most popular policy is the HO-3. This coverage protects you against loss related to your dwelling, personal belongingsand personal liability claimsincluding the 16 named profiles. Below are the types of policies insurance companies offer:

Townhomes can be HO-3 or HO-6.

* Typically not considered sufficient coverage by lenders

** Typically for brand-new homes only

*** Covered under condo association’s master policy

How much does home insurance cost?

Your quotes will vary based on your unique situation. However, it is worth comparing them to your state average and average for your home’s value. The national average for annual homeowners insurance premiums in the US is $1,272, according to S&P Global Market Intelligence.

The state you live in will affect your homeowners insurance premiums. If your state is more prone to natural disasters, you could see higher premiums. Here are the average annual homeowners premiums by state:

Source: S&P Global Market Intelligence

Your dwelling’s cost and the amount it would require to replace your home will also affect your quote. Generally, the more expensive your home, the higher your quote will be. Below are the homeowners insurance costs by home value in the US according to the Homeowners Insurance Report by the National Association of Insurance Commissioners (NAIC):

Does getting homeowners insurance quotes affect my credit score?

In states where permitted, home insurance companies may look at credit-based insurance scores to determine your likelihood of filing a claim, according to Experian. This gives companies insight into your financial history. The higher your score, the better your rates will be.

Insurance carriers will typically evaluate a consumer’s credit score as part of the underwriting process, but this should not impact one’s credit score, says Boris. Instead of a hard inquiry, which will likely lower your credit score, insurance providers will perform a soft inquiry. These generally won’t have a negative impact on your credit score when shopping for coverage.

Ensure that you know what’s going into your home insurance quote, and that you are looking at companies with equal coverage types and values ​​so you can preform an apples-to-apples comparison. If you are looking for a place to start, check out Insider’s best homeowners insurance guide for our top picks of home insurance companies.

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