How to Buy Home Insurance (2025)

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 and loan servicers require home insurance, so if you’re financing your house, you’ll likely need coverage. 

Whether you’re buying a new home or want to change your existing homeowners policy, shop around to find the best homeowners insurance for your needs and budget. Here’s a closer look at how much coverage you need, what affects your rate, and how you can save.

How to shop for homeowners insurance

Shopping around for homeowners insurance can help you find the cheapest rates. Here’s a closer look at what to consider when trying to get the best deal on coverage.

1. Decide how much coverage you need

Most standard homeowner insurance policies provide four types of coverage:1

• The structure of your home

• Personal belongings

• Liability protection

• Additional living expenses (also known as loss of use coverage)

When it comes to the structure of your home, a standard homeowners insurance policy will cover disasters such as fire, hail, lightning, and explosions. Most standard policies won’t cover flooding or earthquakes. If you live in an area where your risk of these events occurring is high, consider getting additional insurance.

Make sure you have enough insurance to cover the costs of completely rebuilding your home. Some policies may limit your coverage amount to the cost of your mortgage.

To determine how much you need to cover your personal belongings, you can take an inventory of your personal possessions. You’ll then need to consider the following policy types:

• Actual cash value: What your possessions are currently worth (taking depreciation into account)

• Replacement cost: The cost to purchase new replacement possessions

In this table, you’ll find a deeper explanation of the coverage types you can have on your homeowners policy.2

A few other types of homeowners insurance coverage that might be worth considering include:

2. Choose a deductible amount

A homeowners insurance deductible is the amount of money you have to pay out of pocket before your insurance company takes over. Deductibles vary by insurer and the plan you choose. Generally, the larger your deductible, the lower your insurance rate.4

A deductible can be calculated as a flat-dollar amount or a percentage of the total amount of your policy. For example, if you have a flat-rate deductible of $500 and a claim worth $10,000, your insurer will pay $9,500 after you pay $500.

Percentage deductibles work a bit differently. For example: Say you have a $200,000 home insurance policy and a 2% deductible. You’d pay a deductible of $4,000 (or 2% of $200,000) before your insurance kicks in. So, if you’ve submitted a $50,000 claim, your insurance would cover $46,000 after you pay the 2% deductible.

3. Gather details about your residence

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?

To determine the amount of coverage you need, you can calculate factors such as how much it would cost to rebuild your home. Variables that can affect the cost of rebuilding include:

• Materials used to construct the walls of your home (brick vs. veneer)

• Style of your home (ranch, colonial, etc.)

• Number of rooms

• Type of roof and materials used

• Any other structures on the property (garage, shed)

• Any special features (fireplaces, arched windows, swimming pool)

• If you’ve made improvements or done renovations (added a bathroom, renovated kitchen)

4. Compare quotes from home insurance companies

Insurers base the cost of home insurance on factors such as where you live, natural disasters in your area, coverage amount, the condition of your roof, how close you live to a fire station, your claims history, and even your credit history in most states.

But the cost of home insurance varies widely between companies. Comparing home insurance quotes is the best way to get the coverage you need and can help you save hundreds of dollars per year. When comparing quotes from different insurers, ask for the same coverages and limits.

Homeowners have a few options to get home insurance quotes:

• Use an online comparison platform. An online comparison tool, like Insurify, can help you compare quotes from many different insurers at once. Some platforms also help you sign up for a new policy after you choose an insurer.

• Talk to an insurance agent. Consider using an agent if you want to speak to a person about the best coverage for your needs. Many agents represent more than one insurer, so they can help you compare quotes from different companies.

• Reach out directly to insurers. Compare quotes from different insurers by getting estimates from a handful of insurers. You can generally speak to an agent, call the company, or visit an insurer’s website for a quote.

5. Buy your home insurance policy

Once you’ve chosen the insurance policy that’s right for you, it’s time to close the deal. Make sure you read and understand the details of your policy.

Your policy document will contain coverage details for your dwelling, other structures, personal property, and liability insurance. It will also include information such as your:

• Policy number: The number you use if you need to file a claim

• Policy period: The start and end date of your policy, which is typically one year

• Coverage limits: How much coverage you have for each type (dwelling, other structures, personal property, and liability)

• Deductible: The amount you have to pay out of pocket before your insurance company steps in

• Endorsement(s): Also known as an insurance rider, any policy add-ons that change or provide extra coverage

Average cost of homeowners insurance by state

The national average cost of home insurance for $300,000 in dwelling coverage with a $1,000 deductible is $2,520, based on Insurify data. But home insurance quotes can vary widely based on what state you live in.

Below are the average home insurance rates for a policy with a $300,000 dwelling limit in each state.

Factors that affect homeowners insurance rates

Insurance companies take numerous risk factors into account when quoting your homeowners insurance premium. Here are some of the most common elements of your profile insurers consider:

How to save on homeowners insurance

Homeowners insurance can be expensive, and Insurify projects rates will continue to rise. Here’s a closer look at some common ways to save on your rate.

Look for discounts

Many home insurers offer discounts for paying your annual premium in full or bundling other types of insurance, like auto, with your homeowners. Discounts may also be available for installing security measures, like cameras and alarm systems.

Improve your credit

A good credit history can help you qualify for cheaper insurance rates. Keep an eye on your credit and monitor your credit reports regularly for errors or suspicious activity.

Comparison shop

Compare quotes from multiple home insurance companies to find the cheapest rates. When rate-shopping, be sure to get quotes that meet your lender’s insurance requirements.

Make fortification home improvements

Some states offer incentives for having a fortified home, like insurance discounts and tax credits. Consider making fortification home improvements to strengthen your home against severe weather events like hurricanes, tornados, high winds, and hail.

Adjust your deductible

Raising your deductible can help you save on your home insurance premium. Keep in mind that if you have to file a claim, you’ll need to pay the deductible in full before insurance kicks in. Your agent can help you find a deductible that best fits your budget.

Avoid coverage gaps

A lapse in homeowners insurance can be costly. To avoid force-placed insurance from your loan servicer, be sure not to let your policy lapse.

How to buy home insurance FAQs