Buying Home Insurance

Homeowners insurance is never required by law in any state, but most homeowners can benefit from it. Even the cheapest homeowners insurance can save you thousands of dollars if anything ever damages your home. Homeowners insurance coverage types offer different protection, but most policies cover damage from theft, vandalism, fire, and some weather events.

You can also add more coverage to your policy for protection from events like earthquakes, floods, and windstorms. The best home insurance for you greatly depends on where you live, so it’s important to research your options before purchasing a policy.

Read on to learn how to find affordable home insurance that meets your needs. Then, use the tips for buying home insurance below to compare quotes and save.

The Ins and Outs of Buying Home Insurance

Buying home insurance is a simple task when you break it down into steps. Purchasing a homeowners policy works similarly to other types of insurance, but there are a few differences.

First, the factors that affect your rates are unique to home insurance. These factors include:

• Location: Some areas come with higher insurance costs than others. Insurance companies consider crime rates, weather risks, and flood plains when they determine your rates.
• Price of your home: The more your house costs, the higher your insurance rates will be. The primary reason for this is that expensive homes cost more to repair or replace after a covered incident.
• Your home’s age: Older homes are often built with more expensive materials and are more likely to need repairs. The newer your home is, the less your insurance will cost.
• Amount of coverage: Like other types of insurance, your rates will increase the more coverage you buy.
• Home features: Insurance companies usually give discounts to homeowners who have certain safety features installed, like security systems or fire alarms.
• Credit history: Companies can use your credit score to determine rates in most states. You’ll pay more if you have a lower credit score, but you can lower your rates by improving your score.

Most insurance companies look at the same factors when crafting your rates, but they use unique formulas. It’s important to look at several companies when you’re shopping for home insurance — you’ll likely overpay if you don’t.

Read more: Can you buy homeowners insurance for a home you don’t live in?

However, there’s more to finding affordable home insurance than just comparing quotes. Follow the steps below to learn how to shop for homeowners insurance

Decide What Home Insurance Coverage You Need

What does home insurance cover? Home insurance covers a lot, but some homes benefit from more coverage than a standard plan. If you’re wondering how to choose homeowners insurance, you should carefully consider what you want to keep covered in your home. For example, you might need more coverage if you have valuable possessions like jewelry, art, sports equipment, or musical instruments.

Another consideration to keep in mind is where you live. People who live near fault lines should consider buying earthquake coverage. You’ll always have at least a small risk of floods, but some places are more inclined to water damage than others. Standard insurance doesn’t cover natural floods, so you’ll need extra coverage to protect your home.

Decide How Much Home Insurance Coverage You Need

While an insurance representative will help you decide exactly how much coverage you need, it helps to be prepared to fill out your application. To get an idea of how much coverage you need, you should have an estimate for your agent. Here’s how you can prepare:

• Calculate rebuild costs: You should have an idea of how much it would cost to completely rebuild your home and unattached structures like fences or a garage. If you need help, an insurance representative, appraiser, or real estate agent can provide assistance.
• Estimate the value of your belongings: Your home is more than the walls of your house. You should have an idea of how much it would cost to replace things like a barbecue, musical instruments, collectibles, or hobby equipment.
• Create an inventory: You’ll get the most from your coverage if you have an inventory of everything important in your home, including silverware, linens, and books. If you can, take a video inventory to submit to your insurer.

The more detail you add to your inventory, the better your insurance will protect you. While a video inventory is best, you can also take photos of everything valuable in your home.

Read more: What is the average cost of homeowners insurance?

Buying Home Insurance From the Right Company

Once you know how much coverage you need, the next step is to find the right company for you. Start by looking for one with the following characteristics:

• Operates in your area
• Offers competitive rates and solid discounts
• Has good reviews from third-party rating companies and customers
• Is financially stable
• Offers 24/7 claims assistance

You should also consider the needs of your lifestyle. For example, dog owners should look for insurance that accepts their breed. Not all homeowners insurance companies allow all breeds of dogs, so you should check with a representative before you sign up. (For more information, read our “Where can I get homeowners insurance coverage for a German Shepherd?“).

With so many home insurance options, it’s important to research several companies. They all have different coverage options and plans. Taking the time to find the right policy for your home will pay off in the long run.

Choose Your Home Insurance Policy

The final step in how to get homeowners insurance is to choose the type of policy you want. You’ll need enough insurance to cover the physical structure of your home and your personal belongings. You also might need add-ons to protect your home, such as flood or earthquake insurance.

You should also look for discounts. Most companies offer discounts to help customers save on their coverage, and the number of available discounts should be something you look at when considering a policy. Common home insurance discounts include savings for having a new home, bundling with other policies, and replacing your roof.

Once you’ve decided which policy to buy, you simply need to fill out your application. When you’re filling out your application, make sure you’re honest — lying on your home insurance application can have serious consequences.

The Best Home Insurance Companies

While buying homeowners insurance from the home insurance company that’s best for you requires research, you can start your search by looking at the highest-rated companies. Some of the best home insurance companies include:

• Lemonade: Lemonade is a young company that offers a modern take on home insurance. Everything about your policy will be handled online, and Lemonade includes replacement coverage in standard policies.
• Erie: Although it’s only available in 12 states, Erie stands out as a good home insurance company because it offers a wide variety of bundling options. Check out our Erie home insurance review to learn more.
• State Farm: Well-known for its car insurance, State Farm also offers excellent home insurance. State Farm home insurance has reliable coverage, excellent customer service, and some of the cheapest rates in the country.
• Chubb: While Chubb might be a more expensive option than some companies, its HomeScan tool can help you detect minor problems in your house before they escalate into something much worse.
• Farmers: Farmers often has higher rates than other companies, but it has plenty of options to save. Farmers offers special discounts for teachers, doctors, and other professionals.

This is only a small selection of home insurance companies, and there’s a significant chance that a company not listed above will have the best policy for you. Smaller, regional insurance companies that provide customized service may be your best bet, such as Magnum insurance for Illinois and Indiana residents. Learn more in our Magnum homeowners insurance review.

You should always request multiple quotes so you can find the cheapest insurance, but there are plenty of other ways to save.

How to Save Money When Buying Home Insurance

The average policy with $250,000 worth of coverage costs about $119 a month, but you can see vastly different rates based on your circumstances. If you want to save on your insurance, try the following tips:

• Raise your deductible: Your deductible is the portion you pay before your insurance kicks in. You can choose a higher deductible to lower your rates, but you’ll have to pay more if you file a claim.
• Maintain a security system: Insurance companies usually give a discount for the efforts you make to keep your house safe. Installing burglar alarms, smoke or CO detectors, and deadbolt locks can lower your rates.
• Ask about discounts: Companies usually apply any discounts you’re eligible for when you apply, but you can also ask a representative to double-check you’re getting every discount. Home and auto insurance bundles are great options to ask for.
• Pay off your mortgage: While it’s not an easy solution, you’ll see slightly cheaper rates once you’ve paid off your mortgage.
• Think ahead for renovations: The materials you use for a renovation will affect how much your insurance will cost. You should also consider your insurance rates before adding a pool — risky structures increase your rates by about 10%.
• Periodically review your policy: You should compare quotes with other companies at least once a year to make sure there’s not a better option out there. Most companies don’t charge a cancellation fee for canceling your policy, so frequently comparing quotes is a great way to save.

On top of periodically comparing quotes, you should also keep your current insurance company updated when you make any changes to your home. For example, having a trampoline usually means you’ll pay more for insurance. If you get rid of it, you might qualify for lower rates.

Buying Home Insurance That Fits Your Needs

No matter where you live, buying home insurance is crucial to keeping your house safe. The amount you’ll pay for your insurance depends on a variety of factors, but there are plenty of ways to save. From taking advantage of discounts to installing security systems, finding affordable home coverage doesn’t have to be a challenge.

One of the most important ways to keep your insurance rates low is to compare quotes with as many companies as possible. Whether you’re shopping for new coverage or you already have a policy, comparing quotes is the best way to ensure you have the best insurance at the best possible price.