Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as "Credible."

Home insurance quotes can vary depending on your coverage, as well as where you live. If you’re not sure where to start, or you want to compare quotes from multiple providers, consider using Young Alfred, a home insurance broker Credible is partnered with.

Customers who have used Young Alfred for insurance have saved hundreds of dollars per year.

Here’s what you need to know about homeowners insurance:

Do I need homeowners insurance?

Just about everyone should consider homeowners insurance. Even if you have your home paid off and don’t need the insurance to help you manage a mortgage, home insurance can be a smart financial choice. If your home were completely destroyed, would you be able to cover the cost of rebuilding it?

How much homeowners insurance do you need?

As you shop for home insurance quotes, you’ll need to figure out how much coverage you actually need.

Tip: The main thing to consider is how much it would cost to completely rebuild your home. You can get a rough estimate of this cost by asking your insurance agent about the average construction costs in your area based on square footage.

Review your homeowners insurance coverage regularly to ensure that you have adequate coverage.

In addition to the total cost of your home, you need to make sure you have enough coverage for your personal belongings. Take a home inventory and estimate the replacement cost for items if they’re stolen or destroyed.

In general, you can expect your personal belongings to be covered up to 50% of your dwelling coverage. However, you might need to make adjustments if you have a large number of belongings or more expensive items. For some extremely valuable possessions, such as artwork or jewelry, you might need separate insurance.

Depending on your situation, it might make sense to also purchase an umbrella liability policy if your homeowners insurance liability coverage isn’t enough.

6 types of homeowners insurance coverage

When looking for homeowners insurance quotes, make sure you understand what coverage is included in a regular policy. Check out the table below for the main types of coverage you’ll typically receive.

Type of coverageWhat it coversCoverage amount
DwellingDamage and destruction to the houseUp to the cost to rebuild the home
Detached structuresStructures on the property that aren’t attached to the home, including sheds, fences and gazebosAbout 10% of the coverage you have on the dwelling
Additional living expensesYour living expenses if you have to relocate while your home is being repairedAbout 20% of the coverage you have on the dwelling
Personal propertyThe cost to repair or replace damaged or stolen personal items, including those stolen from your carOften between 50% to 70% of the coverage you have on the dwelling
LiabilityInjuries or property damage that you or a family member cause to othersLimits usually start at $100,000
Medical paymentsDirect payments of medical bills for someone who was injured on your propertyUsually between $1,000 and $5,000

Once you’ve decided on the type of coverage you want, shop around for quotes. You can do this easily by using a home insurance broker, like Young Alfred.

Get free quotes now
young-alfred

What insurance doesn’t cover

When shopping around for home insurance quotes it’s important to pay attention to what’s not covered. While many standard homeowners insurance policies cover natural disasters, there are a couple of notable events that aren’t usually covered and may require separate coverage:

  • Earthquake
  • Flood

Your homeowners insurance policy also won’t cover normal wear and tear on your home. Maintenance costs must be covered out of pocket.

Homeowners insurance deductibles

Your homeowners insurance deductible is the amount you pay out of pocket before the insurance cost kicks in.

For example: If you have a $500 deductible on your homeowners insurance policy, and vandals cause $2,000 in damage to your home, you’ll have to pay $500 out of pocket. However, the insurer will take care of the other $1,500.

How much does homeowners insurance cost?

There are a number of factors that go into your home insurance quote. Some of these items include:

  • How much coverage you choose: The higher the coverage you get, the more you’ll end up paying in premiums.
  • Construction costs: Some homes cost more to build, based on customization, materials used, and other factors. If there are increased construction costs based on making adjustments for natural disasters, that can impact the cost of insurance.
  • Likelihood of catastrophe: If there is a greater likelihood of fire, wind, hail, or extreme weather, or even an increased chance of terrorist attack, that can also impact your homeowners insurance quotes.
  • Where you live: Costs also vary based on where you live. For example, if you get dwelling coverage of $200,000 in Hawaii, the average premium is $787 for the most common type of insurance. In Idaho, the premium for that same level of coverage is $693 per year. In New York, the average premium is $863 for the same level of dwelling coverage.

One of the easiest ways to reduce your homeowners insurance cost is to increase your deductible. The higher your deductible, the lower your premium is likely to be.

Tip: If you’re willing to bundle other policies, such as auto insurance, with your home insurance policy, you might get a discount. Adding safety features such as alarm systems and deadbolts can potentially help you get a lower premium amount too.

Be sure to shop around and get a few home insurance quotes — Credible’s partners make this easy for you. Once you have some quotes, review your needs and policies, and then choose the best homeowners insurance policy to fit your needs.

Compare home insurance quotes, review your needs and policies, and then choose the best homeowners insurance policy to fit your needs.

See How Much You Could Save

About the author
Miranda Marquit
Miranda Marquit

Miranda Marquit is a mortgage, investing, and business authority and a contributor to Credible. Her work has appeared on NPR, Marketwatch, FOX Business, The Hill, U.S. News & World Report, Forbes, and more.

Read More