When shopping for homeowners insurance, it's important to look at a range of factors, including price, coverage and customer service.
Although one company might offer cheaper quotes, the coverage might not by right for you. Quotes are always free. Just share some information about your home and needs with insurers, and they will craft policy offerings you can compare.
How to shop for homeowners insurance
There are four steps that you should follow when shopping for homeowners insurance: Consider how much coverage you need, get home insurance quotes from multiple companies, compare customer service reviews, and choose the best insurer for you and purchase a policy.
Determine how much coverage you need
The first step to finding the best homeowners insurance is understanding the coverages you can get and figuring out how much insurance you need.
A typical home insurance policy includes the following common coverage options:
|Coverage A||Dwelling||Cost to rebuild your home||Structure of your home|
|Coverage B||Other structures||10% of your dwelling coverage||Buildings not attached to your home, like a shed or fence|
|Coverage C||Personal property||20% to 50% of dwelling coverage||Your belongings|
|Coverage D||Loss of use||20% to 30% of dwelling coverage||Living expenses if you have to move out of your home due to damage|
|Coverage E||Personal liability||Based on your financial assets||Cost of a lawsuit if you hurt someone or damage their property|
|Coverage F||Medical payments||$1,000 to $5,000||Medical bills if a guest is injured in your home|
In addition, many companies offer optional coverages to help homeowners customize their policies. Some of the most popular coverage add-ons are:
Understanding home insurance coverage
Home insurance policies are fairly standardized. However, there are a few options that you'll need to familiarize yourself with so that you can make an informed decision.
Your home insurance deductible is the amount you'll pay toward fixing or replacing any damage after a claim. Your deductible can range anywhere from $500 to $5,000, and the amount you choose directly affects your insurance quotes. Choosing a low deductible will raise your insurance cost, while a higher deductible will result in cheaper rates.
It's important to choose your deductible based on how much you feel comfortable spending in an emergency situation.
Homeowners insurance policy types
The most common home insurance policy types are HO-3 and HO-5. The main difference between these options is the damage they protect your personal property against. HO-5 policies offer more coverage, so they're typically more expensive.
An HO-3 policy lists all of the hazards your belongings are protected against. If your belongings are damaged and the cause isn't listed on your policy, you can't make a claim.
This is also known as a named perils policy.
An HO-5 policy only lists hazards your belongings are not protected against. The coverage offered by an HO-5 policy is broader, so your things are protected against most types of damage.
This is also known as an open perils policy.
Actual cash value vs. replacement cost
There are two common types of coverage that insurance companies offer for personal property — actual cash value and replacement cost.
- Actual cash value: This coverage will pay for damage to your belongings based on their current value, so your insurance company will factor wear and tear into your payout. For example, if you have a 3-year-old couch that's destroyed in a fire, your insurance company will pay you enough money to purchase a used couch in similar condition.
- Replacement cost: This coverage pays for damage to your belongings based on the amount it would cost to purchase a similar item brand new. If you have replacement cost coverage and your 3-year-old couch is destroyed, the insurance company will pay for you to buy a new couch.
Not all homeowners benefit from the extra protection offered by replacement cost coverage. If you have a lot of brand new or expensive furnishings, you may want to consider replacement cost coverage — the added cost may be worth it if you value having brand new items.
The quotes below show the difference in cost between a policy with actual cash value coverage and one offering replacement cost coverage.
Actual cash value quote:
$2,239 per year
Replacement cost quote:
$2,365 per year
These factors can make a big difference when it comes to the cost of your home insurance.
It's important to understand what's included in your quote so you can make an apples-to-apples price comparison.
Compare home insurance quotes
Once you know how much coverage you need, you can start shopping for quotes.
State Farm offers the best widely available homeowners insurance rates.
Erie offers the cheapest home insurance quotes overall, but it is only available in select states.
If you have car insurance, make sure you compare quotes from your current insurance company, too. Most insurers offer a discount for bundling auto and home insurance, which could save you a lot of money.
Insurance companies may ask for a lot of information about you and your home to give you an accurate quote. You'll want to be prepared with the following information to make the process as quick as possible.
- Birth date
- Social Security number
- Prior addresses
- Square footage
- Construction date
- Building materials
- Age of roof and plumbing
- Renovation details
- Security and fire safety devices
- Past insurance claims
- Credit score
- Pet information
Insurers use this information to determine how much you'll pay for insurance because it affects the likelihood that you'll have to make a claim. For example, a 20-year-old roof is more likely to leak during a storm than a 2-year-old roof.
Compare quotes in your state
Where you live also influences your home insurance rates. That's because climate and weather can cause a lot of damage to your home. For example, homeowners in Florida pay some of the highest rates in the country, with an average of $2,207 per year, due to hurricane activity in the state.
Homeowners insurance rates by ZIP code
Average annual cost
We included rates for the 500 most populous ZIP codes in the U.S.
Compare home insurance companies
How your insurance company handles customer service is a crucial element of what you're paying for with home coverage. A storm, fire or catastrophic event means a disruption in your day-to-day life or even moving out of your home for weeks or months.
Good customer service plays an important role in helping you get your life back to normal quickly.
With that in mind, our editors looked at homeowners insurance ratings — like the National Association of Insurance Commissioners (NAIC) complaint index and J.D. Power customer satisfaction survey results — to find which companies have the happiest customers.
Home insurance reviews by company
Every insurance company has positive and negative attributes, so it's important to decide which features are the most important to you. To help you find the best homeowners insurance company for you, we've highlighted the pros and cons of companies that received top ratings from our editors.
Purchase a policy
The last step in comparing home insurance quotes is choosing the right insurer for you and purchasing a policy.
To decide on the right insurer for you, start by eliminating any companies that don't offer the coverage you need or want. Next, we recommend finding a balance between affordable homeowners insurance rates and positive customer service reviews.
Once you've chosen a company, you'll need to pick a coverage start date. If you currently have insurance, make sure that the date you choose is before your current policy's cancellation date to avoid a lapse in coverage.
Most major insurers allow you to pay for your policy online using a credit card or bank transfer. Many times, insurance companies will offer a discount for paying your balance in full or signing up for automatic payments, so make sure to select that option if you can afford it.
Frequently asked questions
How much does homeowners insurance cost?
The average cost of home insurance in the U.S. is $1,516 per year, or $126 per month.
Who has the best homeowners insurance?
The best home insurance for you depends on what you need in a policy. State Farm offers a great balance of low rates and good customer service, and is available to most homeowners across the country.
How can I get a good deal on my home insurance?
To find the best homeowners insurance rates, we recommend comparing quotes from multiple insurance companies. In addition, homeowners should make sure they're taking advantage of available discounts. Consider bundling home and auto policies, and let your insurer know if you have a security system, fire safety devices or an impact-resistant roof.
Which company has the lowest price for home insurance?
Erie offers the cheapest home insurance rates — a policy costs $1,244 per year, on average. Unfortunately, Erie is only available in 12 states, so many homeowners can't take advantage of its low prices. People who live outside of Erie's coverage area should consider State Farm.
Read our latest work on home insurance
Although the cost of tiny home insurance fluctuates by state, it’s 106% more expensive, on average, to insure a full-size home. Read More
Nearly one-third of the consumers who live in these areas aren't financially prepared for potential impacts from this year's season. Read More
Against expert advice, 59% of Americans plan to set off fireworks on their own this summer. Read More
Despite Pandemic Lockdowns That Kept Many Americans Inside, Fewer Home Improvement and Maintenance Injuries Were Recorded
Because more people were at home, sports-related injuries also dropped in 2020 compared to the year before — though that wasn’t the case in... Read More
Rural Counties Have More Firefighters per Home but Their Residents Pay More for Insurance Because They’re Farther From Fire Stations
The coronavirus crisis accelerated movement away from some crowded metropolitan areas in favor of less densely populated suburbs. That... Read More
Seventy-one percent of Americans will attend or host a summer barbecue this year, but a new ValuePenguin survey finds grilling hazards... Read More
To find the best cheap homeowners insurance, we compared quotes from top companies in every residential ZIP code across the country. Dwelling coverage is based on the median home age and value for each individual state. For example, our California sample home was built in 1975 and insured to a value of $505,000. Meanwhile, our sample West Virginia home was built in 1974 and insured for $119,500. We used median home values to approximate the rebuild cost in each state.
Quotes also include $100,000 of personal liability coverage, $5,000 of medical payments coverage and a $1,000 deductible.
To illustrate the difference in cost between actual cash value and replacement cost coverage, we gathered quotes from five top companies across every ZIP code in Texas. Quotes are based on $150,000 of dwelling coverage.
ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.