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Licensed auto and home insurance agent
4+ years in content creation and marketing
As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.
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Licensed auto and home insurance agent
4+ years experience in insurance and personal finance editing
NPN: 20564519
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
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Data expert on auto trends and driver behavior
University of Chicago graduate with statistics degree
Chase spearheads analytics for Insurify’s data insights team. With his deep expertise in insurance data, Chase is often interviewed on industry trends.
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At Insurify, our goal is to help customers compare insurance products and find the best policy for them. We strive to provide open, honest, and unbiased information about the insurance products and services we review. Our hard-working team of data analysts, insurance experts, insurance agents, editors and writers, has put in thousands of hours of research to create the content found on our site.
We do receive compensation when a sale or referral occurs from many of the insurance providers and marketing partners on our site. That may impact which products we display and where they appear on our site. But it does not influence our meticulously researched editorial content, what we write about, or any reviews or recommendations we may make. We do not guarantee favorable reviews or any coverage at all in exchange for compensation.
Homeowners insurance protects you from the financial risk of loss or damage to your home in the event of a covered peril, like a natural disaster, fire, or other hazards. Many mortgage companies require home insurance, so if you’re financing your house, you’ll likely need coverage.
Whether you’re a first-time homeowner or want to change your existing homeowners policy, shopping around to find the best homeowners insurance is the easiest way to save. Here’s a closer look at how much coverage you need, what affects your rate, and how you can save.
The average cost of homeowners insurance is $2,540 per year for a $300,000 dwelling policy with a $1,000 deductible, according to Insurify data.
Though states don’t require home insurance by law, you should still purchase it to protect your home and finances in the event of damage.
Completing a home inventory checklist can help you determine the right amount of coverage for your home.
Homeowners insurance has a few core components protecting your main assets, but you can choose to add additional coverages to increase your protection. While state law doesn’t require home insurance, experts recommend it because home repairs can be extremely costly. It can save you tens of thousands of dollars should damage actually happen.
If you have a mortgage, your lender will require you to have home insurance.
Here are the main coverage components for standard home insurance.[1]
Dwelling insurance pays to repair or replace your home’s structure if a covered peril, like wind or fire, damages it.
Other structures coverage pays for damage to detached structures on your property, like a shed, garage, or fence.
Personal property insurance protects your personal belongings, such as clothing, furniture, and electronics. High-value items, such as jewelry, often need special coverage.
Personal liability insurance pays for legal expenses if someone incurs an injury on your property or suffers personal property damage.
Medical payments insurance pays for medical costs if someone gets injured on your property, no matter who’s at fault.
Also called loss of use coverage, this pays for living expenses, such as housing and food, if a covered peril makes your home uninhabitable.
Standard home insurance, while effective, doesn’t cover every kind of damage. Some common exclusions include wear and tear, flooding, and earthquakes. You’ll need special coverage to protect your home against these damages.
Here are some optional home insurance policies to consider:
Flood insurance: Flood insurance can pay for damages caused by heavy rain, storm surge, and overflowing rivers. You can buy it through some private insurers or the National Flood Insurance Program.[2]
Earthquake insurance: Earthquake policies cover structural and personal property damage caused by earthquakes or ground movement.[3]
Umbrella insurance: Umbrella coverage provides additional liability protection above your current limits.
Guaranteed replacement cost coverage: This covers the full cost to repair or replace your home after a covered loss if it costs more than your dwelling limit.
Water backup endorsement: This add-on pays for damage caused by drain or sewer backups.
Scheduled personal property endorsement: This coverage type protects higher-value items such as jewelry and art at higher limits.
Insurify partners with top insurers for accurate quotes
Homeowners can change policies at any time, but you might face fees if you don’t cancel at renewal time. If you can afford to wait, the best time to change your policy is when your policy ends. You shouldn’t cancel your policy before it expires, as this will result in a lapse in coverage and likely violate an existing mortgage agreement.
You may want to change your home insurance policy for several reasons, such as to save money on premiums, improve your coverage, or add endorsements your current insurer doesn’t offer. It’s best practice to re-examine your policy each year and consider alternatives, as the insurance market can change quickly.
Here’s how to change a home insurance policy as an existing homeowner:
Assess your current policy. Take a look at your current policy’s coverage limits and exclusions to see if it suits your needs. You may find you have coverage gaps or unnecessary coverages.
Review your deductible. Reconsider your deductible amount. If you can afford to increase it, you’ll likely pay lower monthly premiums.
Gather home details. Gather any new details about your home, such as renovations, new security features, or newly purchased expensive items. Consider if you want to add any new endorsements.
Compare home insurance quotes. Take a look at the available home insurance companies in your market. Compare prices, coverages, and insurance discounts to see if any insurers suit you better.
Buy your new policy and inform your lender. If you do decide to buy a new policy, make sure to inform your mortgage lender right away and provide the new declarations page.[4]
Buying home insurance as a new homeowner doesn’t have to be complicated. If you need a mortgage for your home, you’ll need a home insurance policy in place before you can close on your home.
Before closing, assess your home’s value as well as the value of your personal property inside. Then, compare quotes from multiple insurers.
Some lenders will set up an escrow account for your payments to go toward your property taxes and home insurance premiums. Without an escrow account, you’ll pay your insurer directly. If you decide to switch insurance companies, you’ll need to let your lender know.
Deciding how much coverage you need is one of the most important steps when buying home insurance. Your dwelling coverage limit should cover the replacement cost to rebuild your home, not its market value.
A standard industry rule is the 80/20 rule, which states your dwelling coverage should cover at least 80% of your home’s replacement cost.
You should also consider optional coverages and endorsements, such as flood or earthquake insurance, guaranteed replacement cost, and water backup coverage. You should also adjust your personal liability coverage based on any attractive nuisances on your property, such as pools or trampolines.
For your personal property coverage, consider whether you want replacement cost or actual cash value coverage. Replacement cost pays for the full cost to replace items, while actual cash value only pays the item’s current value. When deciding how much personal property coverage you need, it’s helpful to walk through your home and make an inventory of your belongings.
A deductible is the amount you’ll pay out of pocket for damages before your home insurance coverage kicks in. Your deductible choice is entirely up to you and what you feel comfortable paying at short notice in the event of a covered peril. Some policies use fixed deductibles, while others use percentage-based deductibles.
When choosing your deductible, keep in mind that it’ll affect your premium. A higher deductible typically results in a lower premium, while a lower deductible means a higher premium. So if you go with a $1,000 deductible instead of a $500 one, your premiums will be lower, but you’ll have to pay an extra $500 to kickstart your coverage in the event of damage.
When applying for home insurance, the insurer will likely ask you some of the following questions to prepare a quote:
What year was your house built?
Who lives in your house?
Do you have pets?
Do you run a business out of your house?
What is the square footage of your home?
What is the type and age of your roof?
What is the style of your home?
Do you have a security system or any other safety devices?
Have there been any previous claims on the house?
Are there any special features in the house?
Having this information handy can save you a lot of time when you go to compare quotes and get you a more accurate estimate of how much your coverage may cost.
Comparing quotes is one of the most important steps you should take before buying a home insurance policy. It’s the best way to see the options available to you. Each insurer has its own method for setting rates based on factors like your ZIP code, home size, burglary rates, whether your home is in a flood zone, and even your proximity to a fire station.
You can compare home insurance quotes online through insurance or comparison websites, or you can go through an independent insurance agent. Finding online quotes is often much quicker than getting quotes from independent agents, but insurance agents can better tailor coverage. Once you pick a policy, inform your mortgage lender right away to ensure you’re compliant.
See quotes from top insurers in minutes
Regardless of whether you’re a first-time homebuyer or on your third home, finding the cheapest home insurance can be a challenge. The average monthly cost of home insurance in the U.S. is $215, but you can find rates as cheap as $113. Every home and homeowner is different, so the cheapest average insurer may not be the cheapest for you.
While finding an affordable rate is important, you shouldn’t sacrifice your coverage amount or quality just to save a few bucks. If you don’t have enough insurance, you could end up paying tens or even hundreds of thousands to repair or replace your home. The extra money you’ll spend for sufficient coverage is worth every penny in the event of a disaster.
Take a look at the cheapest home insurance companies, according to data from Insurify.
Data expert on auto trends and driver behavior
University of Chicago graduate with statistics degree
Chase spearheads analytics for Insurify’s data insights team. With his deep expertise in insurance data, Chase is often interviewed on industry trends.
Featured in
Insurance Company  | Average Annual Premium: With $300,000 in Dwelling Coverage |
|---|---|
| Grange | $1,356 |
| Westfield | $1,428 |
| American Family | $1,932 |
| Erie | $3,192 |
You have plenty of ways to save money on your homeowners insurance:
Increase your deductible. Deductibles and premiums are inversely related, so increasing your deductible will lower your premium. Just make sure you can afford your new deductible amount if you have to file a claim.
Add security features. Adding a burglar alarm, new deadbolt locks, or advanced smoke detectors all make your home less likely to experience damage, so some insurers may give you a lower rate.
Bundle policies. Consider bundling your home and auto insurance policies with the same insurer. Many companies offer significant savings for bundling policies.
Apply for discounts. Ask your insurer what discounts it offers and which you qualify for.
Compare quotes. Always compare home insurance quotes from at least three insurance companies before buying a policy.
Here are some answers to some of the most commonly asked questions about buying home insurance to help you navigate the process.
The 80/20 rule is an insurance industry standard that stipulates you should insure your home for at least 80% of its replacement cost. If you insure your home for less than this amount, your insurance company may not cover your entire claim. If you make renovations that increase your home’s value, be sure to adjust your coverage.
The first step when buying homeowners insurance is deciding how much coverage you actually need. You’ll need to figure out the replacement cost of your home and the value of your personal belongings. You’ll also need to consider any liability coverage needs, such as a pool or trampoline. Once you understand these numbers, you’ll know how much coverage you need.
Home insurance doesn’t cover everything. Standard homeowners insurance policies exclude flood damage, earthquake damage, wear and tear, business activities conducted on the property, intentional damage, acts of war, and some high-value items.
Home insurance on a $400,000 house with a $1,000 deductible costs an average of $3,276 per year, Insurify data shows. Your exact rates will vary based on location, hazards, and other risk factors.
To choose the right coverage limits for your home insurance, you’ll need to get an accurate assessment of your home’s replacement cost and personal property value. You’ll also want to make sure you have adequate liability and additional living expenses coverage. Speaking with a home insurance agent or adviser is a great way to check your chosen coverage limits.
When buying home insurance, you should always compare multiple quotes to make sure you’re getting a fair price. It’s also important to focus on adequate coverage and each insurer’s financial strength, and not just getting the cheapest deal. While you can buy it on your own, buying home insurance with the help of an independent insurance agent is often easier.
While your mortgage lender may not require you to purchase flood insurance if you’re not in a flood zone, you may still want it. If your home isn’t in a flood zone, that doesn’t necessarily mean it’s at zero risk of flooding.
If you live near a creek or your area often sees heavy rain, flood insurance may still be worth it if the cost isn’t too high. Consider the cost of what you’d need to replace in the event of a home flood, and ask yourself if you could afford that out of pocket.
You should review your home insurance policy at least once per year. Home values and construction costs can change, so you may need to adjust your limits. You should also review your home insurance policy after any major home improvements, as your home’s value has likely risen. It’s also a good idea to review after large purchases, such as jewelry or electronics.
Insurify data scientists analyzed rates from more than 180 home insurance companies sourced directly from Insurify’s partner companies and Quadrant Information Services. Rates span all 50 states and Washington, D.C., and quote averages represent the mean price for a given coverage level and geographic area. To ensure data reliability, only insurers meeting minimum quote thresholds were included in the analysis.
Unless otherwise specified, quoted rates reflect the average cost for homeowners with no prior claims and good credit with a home construction year of 1980. The default coverage assumptions include:
Default Coverage Assumptions
Additional data points beyond these default values are sourced from Insurify’s proprietary database. Rates are updated monthly.
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Licensed auto and home insurance agent
4+ years in content creation and marketing
As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.
Featured in
As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.
Licensed auto and home insurance agent
4+ years experience in insurance and personal finance editing
NPN: 20564519
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
Featured in
Data expert on auto trends and driver behavior
University of Chicago graduate with statistics degree
Chase spearheads analytics for Insurify’s data insights team. With his deep expertise in insurance data, Chase is often interviewed on industry trends.
Featured in