9 Ways To Shop for Home Insurance and Get the Best Rates

It’s always helpful to shop for home insurance before settling on a policy, whether you are insuring a new home for the first time or your current policy is up for renewal. This process involves comparing quotes from multiple homeowners insurance companies to find out which carrier can offer you the best deal on a policy that meets your coverage needs.

Below, you’ll find an overview of the steps you need to take as you shop for homeowners insurance, along with other useful tips, like when you should begin the home insurance shopping process.

Key Takeaways You should always shop around before settling on a homeowners insurance policy because different insurers may offer you different rates for the same coverage. Before searching for quotes, you should collect documents and information that you’ll need to share and decide how much insurance you want to purchase. Asking an insurance provider about available discounts can help you secure additional savings. It’s generally recommended that you reevaluate your home insurance needs at least once per year and that you start shopping around at least one month before closing on a new home.

1. Gather All of Your Information and Documentation

Before you begin applying for insurance quotes, you should make sure you have all of the information you will need to share with each insurer at the ready. In general, insurance carriers will request information that they can use to determine your risk of filing a home insurance claim, including your personal details and the characteristics of your property.

In addition, an insurance company may access your credit report and assign you a credit-based insurance score during the underwriting process. While this isn’t legal in every state, federal law allows insurance carriers to look at your credit information because financially unstable people are generally considered more likely to file insurance claims, making them riskier to insure and necessitating higher premiums.^[1]

However, you likely won’t be personally responsible for sharing your credit report, as insurers have the right to independently check your credit information without your permission.^[1]

2. Determine How Much Home Insurance You Actually Need

Ideally, you should know the amount of coverage you want in advance so you can receive quotes for similar policies from the insurance carriers you contact. While home insurance isn’t required by law, it is typically required by mortgage lenders. Even if you don’t need to take out a mortgage, it may still be worth purchasing an insurance policy to protect yourself from a major financial loss due to a damaging peril or liability risk.

The below table goes over the types of coverage that are included in a standard homeowners insurance policy and what coverage limits you may want to set for each coverage type.^[2][3][4]

Coverage Type	Description	Recommended Coverage Limit
Dwelling	Insures your home and attached structures, like patios	Enough to completely rebuild your home after a covered loss
Other structures	Insures outbuildings and other detached structures on your property, like sheds and fences	10% of your dwelling coverage limit
Personal property	Insures your belongings, like electronics, furniture and clothing	50% to 70% of your dwelling coverage limit
Loss of use	Covers additional living expenses or lost rent payments if you or your tenants are unable to return home due to a covered peril	20% of your dwelling coverage limit
Personal liability	Covers medical bills, property repairs and legal expenses if you are held liable for another person’s injury or damage to their property	$300,000 to $500,000
Medical payments	Covers medical expenses after someone incurs a minor injury on your property, regardless of who is at fault	$1,000 to $5,000

Consider hiring an appraiser to get an accurate assessment of the amount of money it would take to rebuild your home before selecting your dwelling coverage limit. You could also create a home inventory to determine how much your most valuable items are worth and whether you need a higher coverage limit for your personal property insurance.

3. Compare Multiple Home Insurance Quotes

You should request quotes from at least three to five home insurance companies so you can compare them and see which policy best matches your coverage needs and budget. Keep in mind that you will most likely need to shop for home insurance during escrow because lenders will usually require you to show proof of insurance three to 15 business days before closing.^[5]

4. Research Home Insurance Carriers

To narrow down which home insurance carriers you would like to contact for quotes, you could look up their customer satisfaction ratings on a third-party platform, like J.D. Power, or research their financial strength ratings, which measure the ability of insurers to consistently pay out claims.

Meanwhile, if you have unique insurance needs, consider researching specialty insurance providers that might be equipped to meet those needs.

For example, if your home is aging and structurally insecure or you live in a region that is prone to natural disasters, like hurricanes, you may want to search for companies that specialize in high-risk homeowners insurance.

5. Ask for Home Insurance Discounts

As you shop around, you should ask homeowners insurance companies about the kinds of discounts they offer. Even if an insurance company sells coverage at a higher base rate, it could still end up being the most cost-effective option if it also offers a number of discounts that you are eligible for.

Actions you can take to potentially qualify for home insurance discounts include the following:

1. Bundling your home and auto insurance policies
2. Paying your premiums for the entire coverage period up front and/or with your insurer’s preferred payment method
3. Going an extended period of time without filing a claim
4. Installing smart home technology, weather-proofing materials and other anti-theft, security or fire protection devices that can make your home safer
5. Staying with an insurer for an extended period of time to earn a loyalty discount
6. Signing up for a new policy or renewing your current one before it expires
7. Using sustainable materials and energy-efficient features to earn a Leadership in Energy and Environmental Design (LEED) certification
8. Buying or building a new house or roof
9. Joining an approved credit union, company, organization or homeowners association to get an affinity discount

6. Consider Working With a Home Insurance Agent

If you would like for someone to guide you through how to shop for home insurance, you could consider reaching out to a captive agent who works for a single homeowners insurance company or an independent agent who sells insurance products from multiple insurers.

That said, you should keep in mind that there are pros and cons to working with both types of insurance agents. For example, although a captive agent may be an expert on their company’s insurance products, they won’t be able to help you compare quotes.

Meanwhile, an independent agent may be able to provide you with quotes from multiple companies. However, their income may come entirely from commissions, which means they could potentially have an incentive to push you toward buying a more expensive policy than you need.

7. Choose the Right Home Insurance Policy

There are numerous other details to consider before you pick a policy to purchase. For example, you will need to select a deductible, which is the minimum amount you are responsible for covering out of pocket on every claim. The higher you set your deductible, the lower your regular premium payments will be.

If you live in an area that is prone to flooding or earthquakes, you may need to add flood insurance or earthquake insurance to your policy since standard policies don’t cover these perils. You’ll also need to decide whether you want to insure both your home and belongings on an open peril basis, which means they would be insured against any peril the policy doesn’t name as an exclusion.

Finally, consider whether you want to insure your belongings at their actual cash value (ACV), which is their depreciated value due to factors like age or wear and tear, or their replacement cost value (RCV), which is the cost to replace them with comparable items. You may also be able to better protect your home with extended replacement cost coverage or guaranteed replacement cost coverage, which can raise your dwelling coverage limit if necessary to cover extra rebuilding costs caused by inflation.

8. Remember That You Can Always Change Your Policy Later

While it’s important to consider all of your options when shopping for home insurance, don’t stress too much about the policy you ultimately settle on since you won’t be locked into it forever. Homeowners insurance policies typically last for one year, and you will likely have the option to cancel your policy early if you so choose.^[6]

You may have to pay a cancellation fee if you terminate your policy early, but you may also be entitled to a prorated refund.

You can even switch policies if you pay for homeowners insurance through an escrow account. Simply let your lender know that you have changed policies, and they will use the money you have paid into your escrow account to start making payments to your new home insurance company.

9. Be Honest When You Apply

Lying to an insurance company is considered insurance fraud and is illegal. While you may be able to get lower premiums by concealing information like the high number of claims you’ve filed in the past or the poor condition of your roof, insurance fraud will cost you greatly if you are caught. Your insurance company could cancel your policy, and you could potentially face criminal punishments, like fines or jail time.

In addition, withholding information from your insurance provider could lead to certain claims being denied. For example, if you buy a trampoline and don’t tell your insurance company about it, the insurer could refuse to pay out a personal liability claim after a visitor gets hurt while jumping on the trampoline.

Why Should You Shop Around for Home Insurance?

You should always shop around before committing to a homeowners insurance provider because every insurer has its own formula for evaluating how likely you are to file a claim and how much you should have to pay for coverage. As a result, one insurance company could view your circumstances more favorably and offer you a better rate than another company.

When you’re shopping for home insurance, make sure you only make direct comparisons between similar policies. Homeowners insurance policies can come with different coverage limits and coverage types, so it’s important to remember that a cheaper policy is not necessarily better if it comes with substantially less coverage.

How Often Should You Shop for Home Insurance?

It’s recommended that you compare homeowners insurance quotes at least once per year. A convenient time to do this may be whenever your current policy is up for renewal. In addition, you should review your insurance policies and consider shopping around any time you experience a major life event that will change your coverage needs, such as getting married or buying a new house.^[6]

What Do You Need When Applying for Home Insurance?

You should be prepared to provide the following information when you apply for homeowners insurance:^[7]

1. Date of birth
2. Insurance coverage and claims history
3. How many people live in the home
4. Property address
5. Age and size of the home
6. Home safety features
7. Whether the house is your primary residence or second home
8. Detached structures on the property
9. How accessible the home is to firefighters
10. When you would like your coverage to begin

When Is the Best Time To Shop for Home Insurance?

When you need to shop for homeowners insurance for a new home, you should start looking for coverage as soon as you begin the closing process. This should give you about a month to collect multiple quotes, weigh the pros and cons of each and purchase a policy in time to show proof of insurance to your lender prior to closing. Keep in mind that your lender may require you to pay for an entire year’s worth of coverage up front.^[5]

How To Buy Insurance for Your Home

The best way to shop for home insurance is to take advantage of an online insurance marketplace like SmartFinancial. Answer a few questions for us, and we can connect you with agents in your area who can offer you personalized homeowners insurance policies. Start the process of comparing home insurance quotes for free today.