How to shop for homeowners insurance

To shop for home insurance, you will need to gather details about your property’s age and construction, determine the types and amounts of coverage you need, and compare quotes from multiple insurers. While some companies offer online tools to provide a quote, others may require a brief phone call to finalize policy details and check for available discounts.

7 steps to shop for home insurance

Your home is likely your biggest investment, so making sure you have a solid home insurance policy in place to protect it is critical. Fortunately, it’s easier than ever to shop for coverage, whether you are purchasing a policy for your new home, are dissatisfied with your current insurance, or simply want to make sure you have the best coverage and rate for your situation. 

Here’s how to go about it step by step.

Step 1: Gather details about your home

To get the most accurate home insurance quotes, it’s helpful to have the following information handy.

• Details about your home: You’ll likely need to provide the year your house was built, its square footage, its construction material, and any renovations. Usually, companies also ask about the type and age of your roof.
• Potential risks: Be ready to mention if you have a pool, a trampoline, or certain breeds of pets. Because these can increase the risk of someone getting hurt on your property, they often affect your liability coverage and the final price of your policy.
• Safety features: Do you have a burglar alarm, smoke detectors, or a sprinkler system? If so, you might earn a discount on the cost of your coverage (called your premium).
• Your claims history: Insurers look at your Comprehensive Loss Underwriting Exchange (CLUE) report, which shows any insurance claims you’ve made in the past seven years. You can request a free copy of this report once a year from LexisNexis to check for errors.
• Your current policy: If you are already insured, your declarations page serves as a summary of your existing coverage. It lists your specific policy limits, deductibles, and the different types of protection currently in place. This summary makes it easy to compare your current premium against a new quote or spot areas where you might need more protection.

Step 2: Assess your coverage needs

You should carry enough coverage to rebuild your home based on current material and labor costs. You can estimate that amount by multiplying your home's square footage by local cost-per-square-foot building costs, or an insurance agent can calculate it for you. 

The resulting number reflects the minimum amount of dwelling coverage you need. Dwelling coverage covers your home’s primary structure, including the roof, walls, foundations, and any built-in or attached systems or structures. 

Other coverages to consider

In addition to dwelling insurance, you may also want to consider the other common coverages when assessing your needs:

• Other structures coverage: Helps pay to repair or replace structures not attached to your primary residence, such as sheds, fences, and detached garages, in the event of claimable damage. In most cases, the coverage amount for these structures is set at 10% of your dwelling limit. For example, if your home is insured for $300,000, you would have $30,000 for other structures. If that isn't enough to cover everything on your property, you can usually pay a little more to increase that limit.
• Personal property coverage: This part of your policy helps cover the cost of repairing or replacing your belongings, such as furniture, clothing, and electronics, in the event of a covered claim. The standard limit for personal property coverage is 50% of your dwelling insurance. However, you should consider purchasing extra coverage if you have high-value items, like collectibles, art, or jewelry as standard policies often have specific dollar caps on how much they will pay out for luxury goods. 
• Loss of use coverage: This part of a policy helps pay for additional living expenses you may incur if your home becomes uninhabitable after a covered loss. Covered costs can include alternative housing, such as a hotel, dining expenses, laundry services, and more. The standard limit for this type of coverage is 20% of your dwelling insurance, though it varies by insurer and policy.
• Personal liability insurance: If you or a household member injures someone or damages their property, this coverage will help pay for associated medical bills or property repair or replacements. Generally, you should carry at least $300,000 in personal liability insurance. However, you may want more if you’re at a higher risk for claims, as may be the case if you have a pool or trampoline, entertain often, or have a high net worth. 

Pro tip: You should also consider your deductible, which is the amount of damage you agree to cover out of pocket in the event of an approved claim. Selecting a higher deductible usually means your annual cost of coverage will be less. Just make sure the deductible you choose is an amount you can comfortably afford to pay on short notice if a disaster happens.

Step 3: Get multiple homeowners insurance quotes

Shop around and get quotes from at least three different home insurance companies. Though many insurers offer similar coverage amounts and types, rates can vary significantly by company. Getting multiple quotes can help you find the best coverage and rates for your needs. 

For the most effective comparison, get quotes for the same coverage types and limits. Try to choose the same deductible for each quote, though the options may vary slightly by insurer. For instance, one insurer may offer a deductible as low as $500, while another may have a minimum deductible of $1,000.

Step 4: Compare home insurance quotes

After you get multiple quotes, compare home insurance policies and rates, taking specific note of the following: 

• Coverage limits: Check the limits for each type of coverage included in the policy. Even if you get a quote for the same amount of dwelling coverage, you may find other coverage limits vary by insurer.  
• Policy exclusions: Most insurers exclude specific issues, like flood-related damage, from coverage. However, exclusions vary by insurer. For instance, one insurer may exclude certain dog breeds while another does not. 
• Reimbursement methods: Standard reimbursement options include actual cash value (ACV) and replacement cost value (RCV) coverage. RCV offers more comprehensive financial protection, though it may come with a slightly higher premium. 
• Deductibles: If you couldn’t choose the same deductibles for each quote, note how the variations affect rates and your ability to cover the deductible after a claim. 
• Additional features or endorsements: Even though policies are similar, some may offer extra features or policy add-ons (also known as endorsements) to enhance coverage. Some may be automatically included with your policy, while others may require an additional fee. Note any features or endorsements that may make one policy more valuable than another.

Step 5: Check for discounts

Home insurance discounts are an easy way to lower your annual premium. Here are some of the most common discounts homeowners may qualify for: 

• Age-related discounts, such as being 55 or older
• Bundling or multi-policy discounts for purchasing more than one type of coverage, such as home and auto insurance
• Claims-free discount
• Electronic payment 
• Paperless discount
• Risk mitigation discounts, such as those for hardening your house against wind or fire 
• Loyalty discounts if you remain a customer for a specific period 

If you’re applying for quotes online, consider following up with the insurer by phone to make sure your quote accurately reflects any discounts you’re eligible for. 

Step 6: Research the insurer's reputation

After narrowing your options, review each home insurance company to ensure they can offer reliable coverage and support after a claim. There are several steps you can take to analyze an insurer’s reputation:

• Check reviews. These can include customer reviews, such as those on sites like Trustpilot, and professional reviews online. 
• Speak with family, friends, or colleagues about their experience with an insurer. 
• Check the insurer’s financial ratings as provided by insurance and credit rating agencies like Demotech, Inc. and AM Best. These ratings indicate how likely an insurer is to meet its payment obligations after a claim.

Step 7: Finalize your purchase and review coverage  

After you’re satisfied with your selected coverage and company, you can purchase your policy. 

If you’re financing the purchase of a new home

• Buy home insurance well before closing, as your lender will likely require proof of coverage at closing. 
• You may need to pay in advance for a full year of coverage, though the payment is sometimes included in closing costs. 
• Lenders often require homeowners to have an escrow account as part of the lending agreement. If you need an escrow account, your lender will factor your home insurance costs into your monthly mortgage payment. 

If you’re switching insurers

• Make sure your new policy goes into effect no later than the day your existing policy is set to expire. 
• If you have a mortgage and an escrow account, tell the lender you’re changing insurance companies so they can update payment details. 
• If you don’t have an escrow account and plan to pay the insurer directly, review the available payment options. Standard options include annual, biannual, and quarterly payments, though some insurers may offer a monthly option. 
• Take note of payment due dates and methods to ensure continuous coverage. 

When to shop for new coverage

Shopping for home insurance isn’t a one-and-done task. Your home and life will change over the years, and your coverage needs will change, too. Here are four key times when shopping around may be beneficial.

Buying a new home

If you’re considering buying a new home, it is helpful to shop around for insurance as early as possible. This is particularly true for properties in high-risk locations like coastal regions, Tornado Alley, and wildfire country, where premiums are higher and coverage can be harder to find. By checking early, you can get a clear picture of your total monthly housing costs before you’re too far along in the process. 

Renewal time

Every year, your insurance company will send you a renewal notice at least 30 days before your policy ends. This is a good reminder to shop around to see if your company still offers the best deal for the coming year. But remember, you don’t have to wait for your policy to expire — you can change insurance companies anytime.

After rate hikes

Insurance costs are rising nationwide. The average home insurance premium increased by 24% between 2021 and 2024, and a large majority of American homeowners expect their premium to continue increasing in coming years. If your bill goes up, you may be able to find a lower price by shopping around.

Major renovations

If you finish your basement or add a bedroom, the value of your home will likely rise, and you should update your coverage limits so you aren’t underinsured. Conversely, if you get a new roof or install a security system, you might qualify for new discounts. Anytime you make a big change to your house, let your current insurer know and consider shopping around for better coverage at a better price.