Any number of catastrophes can hit home and turn life upside-down. Home insurance helps you pick up the pieces, turn things right side up again and sleep easy, knowing your biggest investment is safe.
Home insurance covers the house structure as well as your personal belongings. It also provides liability protection in case someone sues you, and money to cover additional living expenses if you have to live somewhere else while your home is undergoing repair after a covered loss.
Best Home Insurance Companies for 2021
Compare best home insurance companies side by side
You can compare homeowners insurance quotes for a policy with $300,000 in dwelling and liability insurance with a $1,000 deductible in the table below. The rate is an average field for nearly every ZIP code in the country. Additionally, you can compare homeowners insurance companies on how well they scored on customer service, their market share, their financial strength rating, and the number of complaints filed with regulators.
Here you can compare the best homeowners insurance companies side by side:
Easy steps to shop homeowners insurance
When shopping for home insurance, you want to be sure you get the coverage you need from a company with great customer service at a price that is reasonable. Here’s how to buy home insurance:
Home Insurance Basics
Home insurance protects your house, your belongings and shields you from financial disaster if you’re sued because someone is injured on your property. Here we’ll explain in detail how homeowners insurance works.
What is home insurance?
Home insurance is a contract between you and your home insurance company that outlines how much money you get to repair or replace your home and belongings when damaged under certain conditions. It also pays for the medical bills of those injured in your home and for legal expenses if you are sued by an injured guest and you’re legally responsible for the incidents. In some cases, it covers you if you damage others’ property or injures someone else.
What does home insurance cover?
Home insurance is comprised of several types of coverages that work together to protect you, your home and your belongings.
Here is the overview of what does home insurance cover with coverage limits for each:
| Covery type | What is does | Coverage example | Typical amount |
|---|---|---|---|
| Dwelling | Covers damage to your home | Damages caused by fire, smoke, storms, lightning, hail, vandalism. | Enough to pay to rebuild your home |
| Other structures | Covers stand-alone structures on your property | Damage caused to the fence, detached garage, etc. | 10% of dwelling coverage |
| Personal property | Pays to repair or replace belongings that are stolen or damaged in a covered event | Clothing, furniture, electronics and appliances. | 50% to 70% of dwelling coverage |
| Additional living expenses (ALE) | Help pay temporary living expenses while your home is being repaired | Hotel and restaurant bills and other living expenses. | 20% of dwelling coverage |
| Liability | Pays if you injure someone or cause property damage, and for legal expenses, if you’re sued | Property damage and bodily injuries to another person, Legal costs. | $100,000 to $500,000 |
| Medical payments | Pays for medical bills of those injured on your property, regardless of fault | Reimbursement of Medical bills of guests. | $1,000 to $5,000 |
Read more about what does home insurance cover
What is not covered by home insurance?
Your homeowners insurance coverage applies to water damage that occurs from burst pipes or severe rain, but it doesn’t cover damage if your house is flooded by water that comes in from the ground. For that, you need flood insurance.
How to get flood insurance: The National Flood Insurance Program (NFIP) sells flood insurance under the oversight and management of the Federal Emergency Management Agency (FEMA). Though these policies are administered by the NFIP, you would still buy one from a standard home insurance company. The NFIP website allows you to enter your state to get a list of providers in your area.
You can also buy flood insurance from a private company. Private flood insurance policies cost more but offer more protection.
You also need a separate policy to cover your home from damage caused by earthquakes.
How to get earthquake insurance: You can buy earthquake coverage from most major carriers as either a separate policy or as an add-on to your standard home policy. In California, it is available from the California Earthquake Authority (CEA).
There are other types of damage that aren’t covered by your homeowners insurance. These include damage from:
- Mold
- Termites
- Rodents
- Normal wear and tear or negligence
- Sewer backups
Additionally, some insurance companies don’t pay for injuries caused by certain breeds of dogs.
There is also a limit to how much a standard policy will payout for damaged or stolen belongings. That means you should get add-on coverage to boost protection if you have valuable possessions, such as jewelry or collectible art.
Types of home insurance
There are several different types of home insurance policies. Some offer more coverage than others, and some are for various types of structures, for instance, mobile homes, condos or historic houses. The type of home insurance that’s best for you will depend on how much coverage you want and what type of house you own. The exact terms and numbers below may vary from one insurance company to another, but in general, the coverage will be similar.
Get an estimate of home insurance cost
Insure.com’s analysis of rates from top insurers for nearly every ZIP code in the country found the average cost of homeowners insurance to be $2,285 a year, or $190 per month. That’s for a home insurance policy with $300,000 in dwelling coverage and $100,000 in liability insurance. If you bump up liability to $300,000, the national average cost is $2,305.
| Average Annual Rate | Dwelling/ Liability Coverage |
|---|---|
| $1,806 | $200,000/ $100,000 |
| $1,824 | $200,000/ $300,000 |
| $2,285 | $300,000/ $100,000 |
| $2,305 | $300,000/ $300,000 |
| $2,694 | $400,000/ $100,000 |
| $2,709 | $400,000/ $300,000 |
| $3,046 | $500,000/ $100,000 |
| $3,056 | $500,000/ $300,000 |
| $3,304 | $600,000/ $100,000 |
| $3,323 | $600,000/ $300,000 |
How much is home insurance in your state
Home insurance rates can vary depending on where you live. Select your state from the below list to get an estimate of home insurance cost and how does home insurance work in your location.
States with the most expensive rates for home insurance
Oklahoma, Kansas, Arkansas, Florida and Texas top the list for states where homeowners pay the most for insurance. These states are prone to severe weather, which is part of the reason why rates are high compared to the rest of the country.
| Rank | State | Average Rate |
|---|---|---|
| 1 | Oklahoma | $4,418 |
| 2 | Kansas | $3,920 |
| 3 | Arkansas | $3,422 |
| 4 | Florida | $3,418 |
| 5 | Texas | $3,412 |
| 6 | Mississippi | $3,318 |
| 7 | Louisiana | $3,249 |
| 8 | South Dakota | $3,149 |
| 9 | Nebraska | $3,112 |
| 10 | Missouri | $3,093 |
States with the cheapest rates for home insurance
Hawaii, California, Vermont, Utah and New Hampshire top the list of states where home insurance costs the least, compared to the rest of the nation.
| Rank | State | Average Rate |
|---|---|---|
| 1 | Hawaii | $477 |
| 2 | California | $1,144 |
| 3 | Vermont | $1,194 |
| 4 | Utah | $1,356 |
| 5 | New Hampshire | $1,436 |
| 6 | Nevada | $1,457 |
| 7 | DC | $1,462 |
| 8 | Washington | $1,494 |
| 9 | Maryland | $1,503 |
| 10 | Delaware | $1,504 |
Home Insurance Advisor
How to save money home insurance discounts
There are many types of home insurance discounts you can earn to get the cheapest home insurance rates for your particular homeowner profile. Some discounts are based on the materials and age of your home, some on how and when you pay your bill and others on upgrades or the types of security and safety features you have.
New Home Construction
Age of Home (Five Years or Less)
Home and Auto Bundle
Series of Upgrades (Electrical, Heating, Plumbing)
Age of Home (10 Years or Less)
Construction Type (Fire-resistive, Superior)
Roof Upgrade (Fire-resistive, Superior)
Advance Purchase
Loyalty (10 Years or More)
If you buy a new policy, look through your insurer’s information for any discounts for which you might be eligible. Don’t be afraid to ask your insurance company if you’re not sure if you’re eligible for a discount. Common discounts you can receive when you purchase coverage include a home and auto bundle and new home discount.
How to shop for homeowners insurance
When shopping for home insurance, you want to be sure you get the coverage you need from a company with great customer service at a price that is reasonable.
Here’s how to buy home insurance:
- Learn the basics of how home insurance works: Make sure you know how the different parts of a home insurance policy work to protect you and your home and belongings.
- Make sure you have enough coverage: You want to have enough dwelling coverage to rebuild your home. You can ask your home insurance company for help in determining this amount, hire an appraiser or use online tools that help calculate rebuilding costs. Experts recommend $300,000 of liability insurance.
- Research homeowners insurance companies customer satisfaction ratings: Check listings of the best homeowners insurance companies to see how providers rank on customer service.
- Create a list of four or five companies based on your research: Compare home insurance quotes from at least three companies, more is better, to be sure you find the most affordable rate. Be sure you get quotes for the exact same coverage amounts. Whether you decide to buy homeowners insurance online or through an agent, you’ll typically need to have the rebuild cost of your home, prior inspection reports, insurance history and your financing details and lender requirements for coverage, if any.
- Check discounts: Once you have a quote from several companies, research the discounts offered. One company may have more that match your homeowner profile, which means a lower rate compared to others. If you decide to buy homeowners insurance online, you can find out about discounts while perusing insurance company websites.
- Compare quotes and choose a company: Once you’ve compiled a list of companies with their quotes and service ratings, check for discounts, decide which one suits your needs best, buy the policy and choose a start date for it. Cancel your old policy once the new one is in effect if you’re switching carriers.
Read more about how to buy home insurance in 6 easy steps
Frequently Asked Questions About Home Insurance
What is home warranty insurance?
A home warranty is a service contract that you pay a monthly fee for that allows you to pay a set amount to repair major appliances and household systems. You pay a service call fee and a discounted amount for the repairs or replacement. Exactly what’s covered depends on your contract, but typically home warranties cover HVAC and electrical systems and water heaters. Some also include refrigerators, washers and dryers and you can add on coverage for septic systems, pools and hot tub and more.
A home warranty is a separate service contract. It is not home insurance but rather supplements it. If your home and appliances are relatively new, it’s not worth it to pay for a home warranty. The systems and appliances are likely covered by manufacturer warranties if they do fail, which is unlikely. However, if your home and appliances are old, it may be worthwhile in some cases. While you do pay a discounted rate and don’t have to find qualified repair businesses, most contracts don’t cover repairs needed due to normal wear and tear or improper maintenance. It may be likely that your definition of proper maintenance differs from the home warranty provider’s. That means in many cases you have to prove that you’ve done proper maintenance to get the home warranty company to do the work.
How much home insurance do I need?
You should select a dwelling coverage amount that covers the cost to repair damage to your home or rebuild it completely at the equal quality — at current prices.
Does home insurance go up every year?
In general, home insurance costs are trending upward, though what you pay will depend on your particular situation, your insurer, where you live and the type of home you have, among other things.
Here are common reasons why home insurance rates increase:
- Your insurer raised rates to cover its cost of doing business
- You filed a claim or live an area where many others have
- You added a pool, trampoline, woodstove
- You’ve added a certain breed of dog to the family
- You built an addition or did a major renovation
- Inflation
- Construction costs in your area increased
- Your credit score changed for the worse
Sources:
- https://www.jdpower.com/business/press-releases/2020-us-home-insurance-study
- State/Line (P/C Lines) – P/C, US; Data as of: June 1,2021
