To get a home insurance estimate for rates, you need to know how much coverage you need to buy. The main coverage on your home insurance policy is dwelling coverage, which is the replacement cost of your home. You’ll also need to decide on liability coverage and deductibles and consider any endorsements.
While estimating these coverage amounts yourself will give you a good idea of your average insurance rates, you’ll need the most accurate numbers possible when you buy your policy.
Getting homeowners insurance estimates is a good way to shop around and get quotes, then move forward with more exact numbers. Find out how to estimate your home insurance needs and costs below.
Key takeaways
- Estimate your home’s replacement cost value to determine the dwelling coverage on your policy.
- Many coverages on a home insurance policy are calculated as percentages of the dwelling coverage but can be increased in some cases.
- Experts recommend increasing your liability coverage from the standard $100,000 to $300,000, which won’t increase your rates by much.
How to get home insurance estimates
There are many variables to consider when working up a homeowner insurance estimate, and we’ll break it down into a few easy steps.
Step 1: Calculate how much dwelling coverage you need
Step 2: Decide how much homeowners liability you need (and medical payments)
Step 3: Choose additional coverage options
Step 4: Choose a deductible
The limits of your coverage for the following are typically a set percentage of your dwelling coverage limit, as shown below:
- Other structures – 10%
- Personal property – 50% (you choose between replacement value or actual cash value)
- Loss of use – 20%
Each of these requires a little more information to make sure you get the right amount of coverage.
Step 1: Estimate how much dwelling coverage you need
Your dwelling coverage should equal the cost to repair damage to your home or rebuild it completely at equal quality — at current prices. This is called the replacement cost. Figuring out how to calculate home replacement cost can be a challenging task, but can be done by making a thorough inventory of building materials used for your home, using online calculators, or, you can hire an appraiser to do it for you.
When buying homeowners insurance, you should get enough dwelling coverage to match the full replacement cost of your home. An estimate will work for quote comparison purposes, but you need an accurate number to make sure you’re properly insured.
Step 2: Decide how much homeowners liability you need (and medical payments)
Most home insurance policies come with $100,000 in personal liability insurance, but most experts recommend upping your limits to at least $300,000.
Liability insurance pays out when you or a family member are legally responsible for others’ injuries or property damage. Personal liability also covers legal fees if you are sued, as well as any resulting judgments from a lawsuit, up to your policy limits.
Medical payments coverage pays for injuries to guests in your home, regardless of who is at fault. Medical payments differs from liability insurance in significant ways, primarily in that it is for minor incidents and comes in very low limits of $1,000 or $5,000. The highest amount available to you is recommended.
Step 3: Choose additional coverage options
With the basics in place, you can look at the options available from the insurance company. Common add-ons and home insurance endorsements you might want to consider are:
- Upgrading to a higher or extended/guaranteed replacement cost
- Upgrading personal property coverage to replacement cost
- Water and sewer backup
- Riders on high-value items such as jewelry and art
Some companies offer upgrade packages that include the most popular options for one price.
Step 4: Choose a deductible
The deductible is your share of the repair cost when you file a claim. Your home insurance premium will be lower if you choose a high deductible. If you have a $500 deductible, you're going to pay more on your premiums than if you have a $2,000 deductible.
Going with a higher deductible will save you money. It will also mean you pay more out of pocket if there’s a claim. That’s why it’s important to know the trade-off you’re making – and be comfortable with it -- when choosing a home insurance deductible.
Comparing home insurance quotes
With all of the above information ready, you can request home insurance quotes and compare them. Make sure you compare three to five quotes to find the best deal.
As you look at the quotes, ensure they all include the same coverage, and look for any add-ons that are included with the policy. Some insurance companies offer extras at no charge, adding value.
While you’re comparing, make sure you also research the company’s reputation. Our best insurance companies ranking is a good place to start.
