Shopping for home insurance doesn’t have to be complicated. Clear Coverage Guide helps you explore home insurance coverage options, understand the factors that can affect your premium, and find coverage that fits your needs and budget.
What Does Homeowners Insurance Cover?
Home insurance can include several types of coverage designed to protect your home, personal belongings, and finances.
Dwelling Coverage — Helps pay to repair or rebuild the structure of your home if it is damaged by a covered event, subject to your policy limits and terms.
Other Structures Coverage — Helps cover structures on your property that are separate from your home, such as a detached garage, fence, or shed, subject to your policy limits and terms.
Personal Property Coverage — Helps cover your personal belongings, such as furniture, clothing, and electronics, if they are damaged, destroyed, or stolen due to a covered event, subject to your policy limits and terms.
Loss of Use Coverage — Helps pay certain additional living expenses if your home becomes uninhabitable because of a covered loss, subject to your policy limits and terms.
Personal Liability Coverage — Helps protect you financially if you’re found legally responsible for certain injuries to others or damage to their property, subject to your policy limits, exclusions, and terms.
Medical Payments to Others — Helps pay certain medical expenses if a guest is accidentally injured on your property, regardless of who is at fault, subject to your policy limits and terms.
What Affects the Cost of Homeowners Insurance?
Home insurance premiums can vary considerably from one property to another. Insurers may consider several factors when determining your rate, and the factors used can vary by insurer and location.
Location — Where your home is located can affect your premium based on factors such as local weather risks, crime rates, fire protection, and claim costs in the area.
Age and Condition of the Home — The age of your home and the condition of features such as the roof, electrical system, plumbing, and heating system may affect your premium.
Coverage Limits and Deductible — The amount of coverage you select and the deductible you choose can affect your premium. Higher coverage limits generally cost more, while a higher deductible may lower your premium.
Claims History — Your past insurance claims, and in some cases the claims history associated with the property, may affect the premium an insurer offers.
Home Characteristics — Features such as the size of your home, construction materials, number of stories, and certain safety or security features may affect the cost of home insurance.
Insurance and Credit-Based Factors — Depending on the state and insurer, certain insurance-related factors, including credit-based insurance scores where permitted by law, may be considered when determining your premium.
Ways to Save on Homeowners Insurance
There are several ways homeowners may be able to reduce their home insurance costs. Available savings and discounts vary by insurer, but comparing options can help you find the right balance between price and protection.
Compare Home Insurance Options — Rates and available coverage can vary between insurers. Comparing multiple options can help you find coverage that meets your needs at a competitive price.
Consider Bundling Policies — Some insurers offer discounts when you purchase more than one type of coverage, such as home insurance and auto insurance, from the same company.
Review Your Deductible — Choosing a higher deductible may reduce your premium, but make sure you can comfortably afford the amount you would need to pay out of pocket if you file a claim.
Ask About Available Discounts — Insurers may offer discounts for features such as home security systems, smoke detectors, newer roofs, claim-free history, or other qualifying factors. Available discounts vary by insurer and state.
Review Your Coverage Regularly — Your insurance needs can change over time. Reviewing your policy periodically can help you identify coverage that may need to be adjusted and make sure your policy still fits your needs.
How to Compare Homeowners Insurance Quotes
Comparing homeowners insurance involves more than looking at the premium. Coverage limits, deductibles, exclusions, optional coverages, and available discounts can differ between insurers, so it’s important to compare similar coverage when reviewing your options.
Compare the Same Coverage Limits — Make sure the quotes you compare use similar dwelling, personal property, liability, and other coverage limits. A lower-priced quote may simply provide less coverage.
Check the Deductibles — Compare the deductibles shown on each quote. A policy with a higher deductible may have a lower premium, but you could pay more out of pocket when filing a covered claim.
Review Exclusions and Limitations — Look at what each policy does not cover and whether certain types of losses have separate limits or conditions. These differences can be important even when two policies have similar premiums.
Compare Optional Coverages — Check whether each insurer offers additional protection you may want, such as water backup, equipment breakdown, service line, or increased limits for certain valuables. Options and availability vary by insurer and state.
Compare Discounts — Review the discounts included with each quote, such as bundling, home security, claim-free, new home, or automatic payment discounts. Eligibility and savings vary by insurer and state.
Common Homeowners Insurance Questions
Does homeowners insurance cover flooding? — For additional information about homeowners coverage, visit the NAIC homeowners insurance consumer guide.
Does homeowners insurance cover roof damage? — Homeowners insurance may cover roof damage caused by certain covered events, such as wind, hail, or falling objects. Damage caused by normal wear and tear, deterioration, or lack of maintenance is generally not covered. Coverage depends on the policy and circumstances of the loss.
Does homeowners insurance cover water damage? — Homeowners insurance may cover sudden and accidental water damage, such as damage from a burst pipe or certain appliance leaks. It generally does not cover flooding, gradual leaks, or damage caused by poor maintenance. Coverage depends on the cause of the damage and the terms of the policy.
Is homeowners insurance required by law? — Homeowners insurance is generally not required by state law. However, if you have a mortgage, your lender will typically require you to maintain homeowners insurance to protect the property securing the loan.
How much homeowners insurance do I need? — The amount of homeowners insurance you need depends on factors such as the estimated cost to rebuild your home, the value of your personal belongings, your liability protection needs, and any additional risks you want covered. Your home’s market value is not necessarily the same as its rebuilding cost.
What is the difference between replacement cost and actual cash value? — Replacement cost coverage generally pays based on the cost to repair or replace covered property with comparable new property, subject to policy terms and limits. Actual cash value generally accounts for depreciation, which can result in a lower claim payment.
Get a Free Home Insurance Coverage Review
Ready to review your homeowners insurance options? Complete our free coverage review form to tell us what you’re looking for. We’ll use the information you provide to help identify coverage options that may fit your needs.