Guide to homeowners insurance

Homeowners insurance provides financial protection if a disaster damages your home.

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When a disaster or accident damages your home, it can turn life upside-down. Homeowners insurance helps you sleep easy, knowing your biggest investment is safe.

Homeowners 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 living expenses if you have to live somewhere else while your home is being repaired.

Best Homeowners Insurance Companies in 2024 analyzed data from three major sources, J.D. Power, A.M. Best, and NAIC, to rank the best homeowners insurance companies. Our team of experts also considered each company’s average premiums, new homes discounts and bundling discounts.

Compare the best homeowners insurance companies

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AM Best Rating
Average Premium
Customer Satisfaction
AM Best Rating
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AM Best Rating
State Farm
State Farm
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AM Best Rating
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AM Best Rating
American Family
American Family
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AM Best Rating
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Customer Satisfaction
AM Best Rating
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Customer Satisfaction
AM Best Rating
Average Premium
Customer Satisfaction
AM Best Rating
Average Premium
Customer Satisfaction
AM Best Rating

Easy steps to shop homeowners insurance

When shopping for homeowners insurance, you want to be sure you get the coverage you need at a reasonable price. Here’s how to buy home insurance:

Process 1
Learn the basics of how homeowners insurance works
Process 2
Make sure you have enough coverage
Process 3
Research homeowners insurance companies customer satisfaction ratings
Process 4
Check discounts
Process 5
Compare quotes

Homeowners insurance basics

Homeowners insurance protects your house, your belongings and your financial health. Read on to learn more about homeowners insurance works.

What is homeowners insurance?

Homeowners insurance repairs or replaces your home and belongings when damaged by covered perils. It also pays for the medical or legal bills if someone is injured in your home or you are sued. In some cases, it also covers you if you damage someone else’s property or injure someone else.

What does home insurance cover?

Homeowners insurance is comprised of several types of coverages that work together to protect your finances, your home and your belongings.

The graph below shows how each type of coverage works.

Coverage type What the coverage does Coverage example Typical amount of coverage offered by a policy
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 out if for legal expenses if you’re sued or for injury and property damage Property damage, bodily injuries to another person and 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

What isn’t 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.

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. You can use the NFIP website 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 need a separate policy to cover your home from damage caused by earthquakes.

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).

Other things homeowners insurance does not cover

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 won’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 homeowners insurance

There are several different types of homeowners 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 homeowners 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 cost vary from one insurance company to another, but in general, the coverage will be similar.

Bare-bones policy that is rarely offered that covers just the house and attached structures, like garages.
Sometimes called a broad form policy, this covers more instances of damage than an H0-1 and also covers personal belongings.
The most common type of policy that includes coverage for your home, your personal possessions, garages and sheds, liability insurance and additional living expenses.
Coverage for renters.
The most comprehensive home insurance policy with coverages beyond an H0-3.
Coverage for condo owners.
Coverage for mobile homes and manufactured homes.
Coverage designed for homes in which the replacement cost exceeds the actual cash value and is commonly used for historic and older houses.

How much homeowners insurance costs’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 premium 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 homeowners insurance costs in your state

Home insurance rates vary depending on where you live. Select your state from the list below to get an estimate of how much coverage will cost.

Alabama $2,882/Year
Alaska $1,867/Year
Arizona $1,947/Year
Arkansas $4,062/Year
California $1,357/year
Colorado $3,376/Year
Connecticut $2,165/Year
Delaware $1,230/Year
Florida $2,260/Year
Georgia $2,375/Year
Hawaii $562/Year
Idaho $1,879/Year
Illinois $2,589/Year
Indiana $2,707/Year
Iowa $2,389/Year
Kansas $4,648/Year
Kentucky $3,153/Year
Louisiana $2,843/Year
Maine $1,420/Year
Maryland $1,685/Year
Massachusetts $1,583/Year
Michigan $2,306/Year
Minnesota $2,307/Year
Mississippi $3,541/Year
Missouri $3,335/Year
Montana $2,857/Year
Nebraska $4,614/Year
Nevada $1,433/Year
New Hampshire $1,190/Year
New Jersey $1,245/Year
New Mexico $2,530/Year
New York $1,727/Year
North Carolina $2,689/Year
North Dakota $2,931/Year
Ohio $2,005/Year
Oklahoma $4,934/Year
Oregon $1,491/Year
Pennsylvania $1,820/Year
Rhode Island $1,534/Year
South Carolina $2,751/Year
South Dakota $3,514/Year
Tennessee $2,857/Year
Texas $3,977/Year
Utah $1,411/Year
Vermont $1,158/Year
Virginia $2,043/Year
Washington $1,643/Year
West Virginia $1,781/Year
Wisconsin $1,495/Year
Wyoming $1,846/Year

States with the most expensive homeowners insurance rates

Oklahoma, Kansas, Nebraska, Arkansas 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 higher than the rest of the country.

Rank State Average Rate
1 Oklahoma $4,934
2 Kansas $4,648
3 Nebraska $4,614
4 Arkansas $4,062
5 Texas $3,977
6 Mississippi $3,541
7 South Dakota $3,514
8 Colorado $3,376
9 Missouri $3,335
10 Kentucky $3,153

States with the cheapest homeowners insurance rates

Hawaii, Vermont, New Hampshire and Washington D.C. top the list of states with the cheapest homeowners insurance rates.

Rank State Average Rate
1 Hawaii $562
2 Vermont $1,158
3 New Hampshire $1,190
4 Washington D.C. $1,203
5 Delaware $1,230
6 New Jersey $1,245
7 California $1,357
8 Utah $1,411
9 Maine $1,420
10 Nevada $1,433
Homeowners insurance advisor

Homeowners insurance advisor

By answering a few questions, the homeowners insurance advisor will assess your needs and recommend the best policy for you.

How to save money on homeowners insurance

There are many types of home insurance discounts you can earn to get affordable homeowners insurance rates. Many discounts are available. For example, you can receive a discount for the age of your home. H


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)

When you’re shopping for a new policy, ask your insurer discounts you might be eligible for.

Frequently asked questions

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 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