How Do You Compare Home Insurance Quotes?

Increases in home insurance premiums have well outpaced inflation over the last several years, according to a report from the Urban Institute, a non-profit research organization. And homeowners in high-risk areas tend to be hit especially hard by higher costs. One way to soften the blow is to compare homeowners insurance quotes. Since every insurer calculates premiums differently, shopping around can help you find a better deal.

In this guide, we’ll cover what you need to get home insurance quotes and how to compare them. We’ll also suggest home insurance shopping tips and ways to save on your premium.

What information do you need to get a quote?

At the least, you’ll need to provide physical details of your home and its contents, your liability exposure, any special considerations regarding home use or its specific location, personal information, and your preferred deductible. If you're using an online intake form, set aside 10 to 20 minutes for the process. If discussing directly with an agent, be prepared to spend 20 minutes (or more) to get a highly customized quote.  

Here's a list of information typically required:

Home details

• Address: Your precise location helps determine safety factors like your proximity to the nearest fire department and the risk of natural disasters in your area. 
• Square footage: The size of your home affects the cost to rebuild. You may also need to provide the number of bedrooms and bathrooms. 
• Year built: Older homes may be built with materials that cost a lot to replace or have outdated plumbing and electrical systems. Modernizing these features in an old home can be costly, which could raise insurance premiums. 
• Building type: Home insurance companies write different policies for condos and co-ops than for single-family homes.
• Building materials: Along with their cost to replace, the type of siding you have or what your deck is made of may be more or less resistant to fire, wind, and hail. This in turn can affect your home’s vulnerability to natural disasters.  
• Special features: A swimming pool or hot tub, for example, might increase your exposure to liability risks. Extra liability coverage or an umbrella policy may be recommended. 
• Pets: The type and number of pets you have can affect the cost of home insurance. For example, while cats are not generally considered a risk factor, certain breeds of dog are.
• Roof age and condition: A new roof, especially one made with fire- or weather-resistant material, protects your home and can even earn you a home insurance discount, while an older roof might increase your premiums. 

Coverage needs

The amount of dwelling coverage you carry indicates the extent to which your other property is insured as well. For instance, any other structures on your property (such as a shed or detached carport) are typically covered up to 10% of your dwelling coverage, while personal property coverage is usually 50%-70% of dwelling coverage. 

Dwelling

Dwelling coverage reimburses you for damage to your main home from a covered peril, such as fire, lightning, hail, and theft. Insurance companies typically recommend — and mortgage lenders typically require — that you insure your home for 100% of its replacement cost value (RCV) to help ensure you have adequate coverage if a covered peril damages or destroys your property. 

Keep in mind that replacement cost value isn’t the same as your home’s market value, which includes the land your property sits on.

Personal property

Add up the total value of your household’s personal belongings, paying special attention to items that may have limited coverage, such as cash, jewelry, electronics, and certain types of collectibles.

"Everyone should do a detailed survey of their home and property so they don’t miss anything that might require extra coverage," says Erica Ostrander, vice president of markets and franchise success at We Insure. You can use a home inventory app to make the process easier. 

Personal liability

Liability coverage can help cover certain legal and medical costs if, for example, someone is injured on your property. A typical home insurance policy includes at least $100,000 of liability coverage, but you can increase that amount, typically up to $500,000.

Endorsements

An insurance agent may ask whether you need additional coverage not provided in a base policy. For example, earthquake or sinkhole coverage may be an option if you live in a high-risk area. Or, you might need home-based business coverage (if you operate a business from your home), or secondary residence coverage (if you have a summer home). 

Deductible

A deductible is the amount of money you're responsible for before your insurance company starts paying. Here's a scenario:

• You file a claim after a windstorm causes $5,000 in damages to your home's siding.
• Your home insurance deductible is $1,000.
• You pay $1,000 and your insurance company pays the remaining $4,000.

Consider choosing the highest deductible you can comfortably afford to cover in the event of a claim. A higher deductible can lower your annual premium, but it also means you pay more out of pocket for covered claims. 

Personal details

Depending on the insurer and state law, the following information may play a role in determining your home insurance rate:

• Claims history: Previous insurance claims may affect your home insurance quote. Most companies use a report from the Comprehensive Loss Underwriting Exchange database (CLUE) to see your claims history, so you may not need to provide this information directly. 
• Credit-based insurance score: In most states, home insurance companies use your credit-based insurance score when calculating your premium or deciding whether to offer you coverage. A credit-based insurance score isn't the same as a traditional credit score; it’s designed to show how well you’re likely to manage risk, and therefore how likely you may be to file an insurance claim. 

You may also need to provide details about you and members of your household, such as:

• Names, birth dates, and Social Security numbers
• Contact information
• Employment information

Safety features

If your home has certain safety or security features, you might qualify for a discount. "When getting a home insurance quote, inform your agent about locks, bars, alarms, gated community, guarded community," says Anthony Verreos, president of Verreos Insurance Agency. Verreos also recommends mentioning fire-resistant features, such as sprinkler systems.

How many quotes should you compare?

There’s no magic number, but the more quotes you compare, the better your chances of finding the coverage you need at a low price. You have several options for comparing home insurance quotes, including:

• Insurance company websites: Many homeowners insurance providers offer online quotes and agents ready to speak directly to consumers. 
• Insurance quote comparison sites: Online quote marketplaces can save you time since you enter your home details once and receive rate estimates from multiple companies. But make sure you’re using a true comparison site that actually provides quotes rather than lead generation sites that sell your data to third parties. 
• State insurance websites: Some state insurance departments offer a comparison of average premiums from major home insurance companies that operate in the state. You can often narrow down the comparison by city, policy type, dwelling type, or other filters. It’s not as customizable as a quote comparison tool, but it can be a good place to start.
• Insurance broker: Insurance brokers charge fees for their services, but often have access to a wider range of options, including niche coverages. A broker may be ideal if you have complex insurance needs, such as insuring a business you operate out of your home. 
• Independent insurance agent: A licensed independent agent sells policies for multiple insurance companies and can help you compare pricing and coverage. They receive commissions from the insurer when you buy.

"A lot of people don’t realize that it doesn’t cost extra to get insurance through an independent agent, and they can have access to tons of carriers to choose from," says Ostrander. "You’re going to get a lot more value talking to someone who not only knows insurance, but the unique risks in the region where you live, laws specific to your state, and your own personal situation."

What should you compare besides price?

When you shop for home insurance quotes, price might be your top priority. However, other essential factors to consider include:

Coverage limits and deductibles

Make sure the coverage limits for your main dwelling, personal property, loss of use, liability, etc. are the same across quotes, and that the type of coverage (RCV vs. ACV) is apples-to-apples for your roof and other assets. The same goes for the deductible. If you live in a luxury or high-value home, you may need to buy a policy from a specialty insurer. 

Availability of endorsements and separate policies

If you need them, find out which insurers offer supplemental coverage for valuable personal items, earthquakes, and other potential coverage gaps. 

Policy type

Open-perils policies with replacement cost coverage offer the most robust coverage with the lowest out-of-pocket costs, while named-perils policies with actual cash value coverage may offer more affordable premiums. Find an insurer that offers your preferred policy at a reasonable rate. 

Discounts

Discounts vary from one home insurance company to the next. For example, some companies offer discounts for new or renovated homes, enrolling in automatic premium payments, or being a member of certain professional organizations. 

Claims handling

Ask about the company’s claims process. Can you file a claim via mobile app? How does the company handle payments? How does the company rank in the JD Power Property Claims Satisfaction Study? What is the average claims processing time?

Financial strength ratings

Check the insurer’s ratings with independent agencies such as A.M. Best, Fitch Ratings, or Moody's. Each one assesses insurance companies’ financial capacity to meet their obligations to policyholders. 

Customer reviews

Look up customer reviews on third-party websites like Trustpilot and the Better Business Bureau (BBB). Most insurance companies will have some negative customer reviews, but a persistent pattern of the same type of complaint should raise a red flag. Also check the company’s NAIC complaint index to see whether the NAIC receives more or fewer consumer complaints about the company than similar insurance providers. 

How can you save on home insurance?

As you compare home insurance quotes, consider these tips to save money on home insurance: 

• Bundle your policies: Buying your home, auto, and other insurance policies from the same company can often earn you a multi-policy discount. 
• Choose a higher deductible: Choosing a higher deductible can lower your home insurance premium. The trade-off is that you would pay more out of pocket if you file a claim. 
• Make your home more resilient: Fortify your home against inclement weather by getting a new roof, fire-resistant siding, storm shutters, or shatterproof glass. Update your plumbing and electrical systems to reduce the risk of water damage or electrical fires. 
• Install a security system: Safety improvements such as a home security system could earn you a discount. 
• Ask about other discounts: Ask about discounts for seniors, professional organizations, new homeowners, etc.