Shopping for homeowners insurance isn’t an everyday task. Once you’ve chosen a policy, it’s likely you’ll stick with it for at least a year or more. Because of this, when the time comes to shop for a new policy, comparing home insurance quotes to ensure you’re getting a good price is essential. However, it’s important to acknowledge that cost isn’t the only factor to consider; you also need a policy that will provide sufficient coverage should disaster strike. Before you start shopping, here’s what you need to know.
Where to Get Home Insurance Quotes
You can obtain homeowners insurance quotes through various channels: online, by contacting the insurance company directly via phone, or through either a “captive” or an independent agent. Let’s look at the advantages and disadvantages of each.
Home Insurance Quotes Online
Many insurance companies provide free online homeowners insurance quotes on their websites. If a quote meets your needs, purchasing the policy online is often possible. Some insurers allow you to start a quote online but require an agent to finalize it over the phone.
Best for: Simple, straightforward coverage and quick quotes.
Not ideal for: Complex coverage needs or those preferring to discuss options with a person.
Captive Insurance Agents
A captive agent is tied to a single insurance company, such as Allstate, Farmers, or State Farm. Their role is to help you determine the best policy for your needs within that company’s offerings and give you a quote accordingly. They earn a commission, a percentage of your premium, when you buy a policy, and unlike independent agents, they might also get a salary from the insurance company.
Best for: Individuals who have a particular company in mind and want to speak with an agent knowledgeable about its policies.
Not ideal for: Those looking to compare quotes from multiple companies, as you’ll need to contact an agent for each insurer.
Independent Insurance Agents and Brokers
If you want to explore different home insurance options and aren’t tied to a specific company, consider getting a quote from an independent insurance agent or broker. These professionals collaborate with numerous insurers, enabling them to present a wide variety of homeowners insurance quotes for comparison. Because independent agents work on commission, they usually strive to offer the best customer service, but they may also subtly steer you towards more expensive policies.
Independent brokers also work on commission but can also charge a broker’s fee, which they must disclose to customers. This transparency ensures you know exactly how much the broker is earning from your business.
Best for: Those who prefer to have someone else do the comparison shopping for them.
Not ideal for: Individuals who prefer to conduct their own research.
What Do You Need for a Home Insurance Quote?
When you start comparing home insurance quotes, insurers will have questions about you and your home. Here’s some of the information you’ll want to have ready:
- Your address and how long you’ve lived there.
- The number of people and pets living with you.
- The year your house was built, how it’s heated, and the last time its electrical and plumbing systems were updated.
- The age and material of your roof (e.g., slate, shingles, or metal).
- Your home’s square footage, number of stories, and exterior materials.
- Whether you have special features like a garage, fireplace, burglar alarm, or detached shed.
- If you’ve filed any claims in the past five years.
- The date you want your homeowners insurance coverage to begin.
Finally , before comparing home insurance quotes, you should also have a rough idea of the amount of homeowners insurance you need. If you already have insurance, the declarations page of your current policy is a good starting point. It provides a view of your existing coverage and extra features, but be ready to make updates if your needs have changed. For instance, if you’ve recently upgraded your kitchen you may need extra coverage.
How to Compare Home Insurance Quotes
Whether you’re dealing with an agent or working independently, aim to get at least three quotes. This approach lets you assess that you’re getting a good price confidently. When evaluating quotes, ensure that the policies have comparable deductibles and coverage limits. Here are a few key points to keep in mind.
How Much Dwelling Coverage Do I Have?
Dwelling coverage is the part of your policy that covers damage to your home’s structure. Your dwelling coverage limit is the cost to rebuild your home following a disaster (this isn’t necessarily the same as the market value of the home).
Most insurance companies will suggest a certain amount of dwelling coverage based on the specific features of your home, though you can often choose a higher or lower amount. Since each insurer calculates a home’s replacement cost slightly differently, determining the most accurate dwelling coverage limit can be a bit tricky.
If the dwelling coverage offered by one company is significantly higher or lower than others, that could signal a problem. One quote may be much cheaper because it offers less coverage for the actual structure of your house, but that upfront savings might not be worthwhile if a fire leaves you without enough money to rebuild.
If you’re unsure of what coverage you need, include some leeway. Ask about extended replacement coverage, which offers a set percentage above your dwelling coverage limit in case your insured amount falls short.
How Are My Belongings Covered?
The part of your policy paying for damaged or stolen belongings is called personal property coverage. Your insurer may offer either actual cash value or replacement cost coverage for your personal property.
With actual cash value, the insurance company will pay you the item’s value at the time of the incident if something is stolen or destroyed. For older items, this likely won’t be enough to replace them. Paying a little extra for a policy with replacement cost coverage can be well worth it. In that case, your claim payout will be enough to buy new versions of the items you had.
Is There Enough Liability Coverage?
Personal liability insurance can cover your defense costs if someone sues you or files a claim against you. Liability insurance can pay their medical expenses if a neighbor’s child is injured on your backyard trampoline. If they sue you, your policy can cover attorney fees and any legal damages. Consider keeping at least enough liability insurance to protect the value of your financial assets, such as your house, bank accounts, and investments.
What Are the Deductibles?
A homeowners insurance deductible is the amount of a claim you’re responsible for paying. The higher the deductible, the lower your premium tends to be.
Depending on where you live, your insurance company may charge a separate deductible for certain types of claims, such as those from windstorms or hurricanes. Ensure that you are comfortable with the deductibles on your policy before committing to it.
Getting the Right Coverage
Taking the time to compare home insurance quotes is a smart move. Make sure you’re choosing not just the cheapest quote, but also the best coverage for you and your property. Consider working with an independent insurance agent to ensure you compare all available options, or do your research online and carefully review the details of each policy. By taking these steps, you can protect your home and your finances for years to come.
