If you own a home, you need homeowners insurance. Your mortgage company will require it; but, more importantly, it protects an investment most people can't afford to replace out of pocket. But do you know what your home insurance premium pays for? What is home insurance and what does it cover? Most people know that homeowners insurance covers the house itself, but a home insurance policy is a package that also includes coverage for other structures, your personal belongings and provides liability protection.
The average home insurance rate in the U.S. is $2,777 a year, or $231 a month, but rates are very specific to the house and alos vary by location. To get the best insurance for your home, you'll need to compare home insurance companies, coverage and rates.
Shopping for homeowners insurance takes a clear understanding of the basics of home insurance as well as your needs. We’ve gathered expert tips and all the information you need to compare home insurance quotes and buy a policy with confidence.
- Home insurance policies are available for renters and condo owners in addition to single-family homes.
- The most important coverage on a homeowners insurance policy is the dwelling coverage, which is a calculation of the cost to replace your home entirely at today's construction prices.
- Home insurance isn't required by law, but your mortgage company will require it as part of your loan agreement.
How to compare home insurance quotes
Shopping for home insurance isn't hard, but it's important to do it right so that you protect your home properly. Follow a few simple steps to narrow down your choices and find the best homeowners insurance for your needs:
- Decide how much coverage you need. This includes dwelling, liability, and personal property coverage along with any optional endorsements you need to add.
- Request quotes with the same coverage. Make sure all of the quotes you request are apples-to-apples so that you’re comparing rates for exactly the same limits, coverage options, and deductibles.
- Compare the quotes and note any differences. Even if you request the same coverage levels, every company is a little different. Some might automatically include extended replacement cost coverage or added benefits like identity theft coverage. Note any extras included with the price that might cost extra elsewhere.
- Research each company. A cheap rate isn’t the only thing to consider. Make sure you’re choosing a company that will be there for you when you need it. Check sources like J.D. Power and AM Best, and review our ranking of the best homeowners insurance companies.
Best Home Insurance Companies of 2023

State Farm

Auto-Owners

Travelers

Allstate

Erie
How much does homeowners insurance cost?
Homeowners insurance rates vary based on location, claims history, risk and credit history. You’ll pay more for home insurance in an area with more frequent claims, severe weather or an area with a high crime rate.
Factors specific to your home also impact rates, including the size of the home and construction features. These things determine the replacement cost of the home, which is the basis for the dwelling coverage and has the biggest impact on rates. The average home insurance rate for $300,000 dwelling coverage and liability with a $1,000 deductible is $2,777 annually. Of course, that's just an example; your dwelling coverage amount will vary along with your rates.
In addition, home insurance rates vary by state. Homeowners in some states pay double the national average.
Oklahoma, Kansas, Nebraska, Arkansas and Texas are the most expensive states for home insurance based on an Insurance.com analysis. Among the least expensive states for home insurance are Hawaii and California.
Use our home insurance calculator to get an estimate of home insurance costs in your area.
Average home insurance rates by state
What does home insurance cover?
Home insurance covers your home for its replacement cost (the cost to rebuild it from the ground up), other structures on the property, and your personal property. It also protects you from injury and damage claims with liability coverage and provides additional living expenses coverage in case you can’t live in your home during repairs related to a claim.
A standard homeowners policy, or HO-3 policy, is an all perils policy. Some of the covered perils include:
- Fire
- Weather damage, including lightning, windstorms, hail, and the weight of ice, snow, or sleet
- Theft
- Vandalism
- Water damage from sudden and accidental discharge
- Damage from vehicles or aircraft
- Riots
- Explosions
- Falling objects
All perils means a peril is covered unless it is specifically excluded. Your liability and medical payments coverage will pay for injuries to others or damage you do to another person's property and will pay to defend you in court if you are sued for negligence.
Types of homeowners insurance coverage
Dwelling Coverage
Dwelling coverage covers the house itself and any attached structures, like a deck. It's calculated based on the cost to replace the house at current construction prices. Some companies may include extended dwelling coverage at 125% or more of the replacement cost to cover inflation. Other structures on the property, like a shed, are covered at a percentage of the dwelling coverage, usually 10%.
Personal Property
Personal property protection covers your possessions, such as clothing, furniture, electronics, and appliances. Coverage for your belongings is usually around 50% of the dwelling coverage. You can increase this coverage and also select replacement cost coverage rather than the depreciated actual cash value of your property.
Liability Insurance
Liability protection covers bodily injury or property damage to others caused by you or a family member. Liability also covers legal costs and court damages if you are sued. The standard home insurance policy includes $100,000 of liability coverage, but experts recommend at least $300,000.
Valuable Items
Standard home insurance policies usually offer limited coverage for items like jewelry. High-value items may need to be protected using what’s known as a floater or a rider. Consider a rider for any single item that has a value above the limits on your policy.
Additional Living Expenses
Additional living expenses coverage pays for you to live somewhere else when your home is damaged by a covered peril and you can’t live there during repairs. That protection includes paying for hotel and restaurant bills and other living expenses.
Guest Medical Payments
Guest medical covers the medical costs if a visitor to your property is hurt in a minor incident, regardless of liability. Typical limits run from $1,000 up to $5,000.
What's the difference between homeowners, condo and renters insurance?
Home insurance companies write policies specific to the needs of each type of home, including a condo or a home you’re renting. Condo and renters insurance work similarly to homeowners insurance. However, there are distinct differences between homeowners, renters, and condo insurance.
Homeowners insurance
Home insurance protects your house and any other structures on the property. It includes coverage for your personal belongings, liability coverage, and guest medical. Homeowners insurance protects your biggest investment and can avert financial disaster by taking on the bulk of costs if your home is damaged or destroyed.
Renters insurance
Renters insurance covers your personal possessions. Your landlord has their own insurance policy to protect the structure but it won’t cover your belongings. If a fire damages your belongings or a thief steals your laptop and TV, your renters insurance will cover your losses, minus your deductible. Liability coverage is also included as part of a renters policy.
Condo insurance
Condo insurance covers damages within the unit (interior walls, floors and ceiling) and personal property, as well as liability claims, such as someone getting injured in your condo. Like home insurance, many perils are covered by condo insurance, such as fire, theft and vandalism. Some policies will cover your entire condo unit, but that depends on your homeowners (HOA) master policy and what it covers.
How much homeowners insurance do you need?
Before shopping for home insurance, ensure you know how much coverage you need. Take a look at the recommended coverage for each of the main components of a homeowners policy.
- Dwelling coverage. You’ll need enough dwelling coverage to match your home’s full replacement cost. Replacement cost is not market value (what your house could sell for). Instead, it’s how much you would need to build your current home and doesn’t consider land value. You can figure out how to calculate home replacement cost by looking at building materials used for your home, using online calculators, or you can hire an appraiser to do it for you. Discuss your replacement cost estimate with your insurance agent or insurer and confirm that you have coverage limits appropriate for your situation.
- Liability. The recommended level of liability coverage is $300,000, but you might need more if you have a lot of assets to protect.
- Personal property coverage. Personal property coverage is typically 50% to 70% of your dwelling coverage amount. Make sure your personal property is covered at replacement cost rather than actual cash value (the depreciated value of an item).
- High-value item endorsements. Standard-issue homeowners insurance policies don’t cover all types of property. They may restrict payments for specific losses. For example, stolen jewelry reimbursement may be limited to $1,500 regardless of the item's replacement cost. To avoid taking an unexpected loss on your more valuable or unusual items, consider "scheduling" them and adding special coverage.
- Deductible. Deductibles usually range between $500 and $2,500 for a home insurance policy but can be higher. The deductible is the portion of repair costs you are responsible for in a claim.
Once you have the coverage you need nailed down, you’re ready to compare house insurance quotes. Make sure you compare home insurance rates for the same amount of coverage from at least three different insurance companies.
5 Important things to know as you compare home insurance
How to save money on homeowners insurance
The most effective way to save on home insurance is to comparison shop, maintain good credit, avoid filing small claims, and get all the discounts available to you.
Compare home insurance quotes: It’s a good idea to compare homeowners insurance quotes from at least three companies. Get quotes yearly when your renewal approaches to be sure you’re getting the best deal. Rates can vary greatly from company to company and can change over time.
Maintain good credit: Homeowners with bad credit pay significantly more for coverage than those with good credit because insurance companies consider bad credit a risk factor. Stay on top of your credit report and do whatever you can to keep your score up.
Don’t file claims for minor damage: Typically, the more claims you file, the higher your insurance rate will be. Homeowners insurance is meant to protect you from big financial loss, not from minor damages. Avoid filing a claim if you can pay for the repairs yourself.
Maximize discounts: Be sure you get all of the homeowners insurance discounts for which you qualify. These may include discounts for:
- Bundling coverage with your car insurance
- Installing security devices
- Using weather-resistant building materials
- Staying with the same company (loyalty)
Take a look at some discount details below.
I want to learn more about home insurance.
What is the cheapest home insurance?
What you pay for coverage depends on many factors, including the age, location, and materials of your home. However, the best cheapest home insurance companies based on Insurance.com's analysis are Amica and Allstate.
Rates were compared for a policy with $300,000 of dwelling and liability coverage and a $1,000 deductible.
Is homeowners insurance required?
Homeowners insurance isn’t required by law, but your mortgage company will require it to protect their investment in the home. If you don’t have a mortgage, you don’t have to carry home insurance, but it’s highly recommended that you do.
How does homeowners insurance work?
Homeowners policies work in much the same way as car insurance. You pay a premium in return for the promise of coverage if you need to file a claim. When a claim is filed, your insurance company will investigate the claim, estimate the repair costs, and pay for damages per the policy's limits and coverage.
What isn’t covered by homeowners insurance?
A standard homeowners insurance policy doesn’t cover certain types of perils, including earthquakes and floods, and also won’t cover wear and tear damage. You can buy an earthquake or flood insurance policy separately. Other common exclusions include the following, but read your policy in full, so you know what is excluded.
- Theft or damage from a vacant dwelling
- Damage due to war or nuclear disaster
- Damage to pavement or foundations from ice or snow weight
- Pests and damage done by pests
- Defects in construction
- Intentional acts
How are homeowners insurance claims paid?
A home insurance claim goes through the same process as any claim. After the report, an adjuster will investigate and decide what’s covered. Homeowners insurance claims are usually paid by check or sometimes direct deposit. How much you get will depend on the limits of your policy, and your deductible will be subtracted from the total.
- How do you shop for homeowners insurance?
Shopping for homeowners insurance is similar to looking for auto insurance. You can shop online either directly with insurance companies or using a quoting tool to compare multiple companies at once. You can also work with an insurance agent to help find the right homeowners insurance for your needs.
I want to learn more about renters insurance
How much renters insurance do I need?
You need enough coverage to replace all of your personal property. That means you’ll likely want replacement value rather than actual cash value. Replacement value pays for a brand new replacement, regardless of how old the item is. Actual cash value pays the depreciated cost of the item.
What does renters insurance not cover?
Rental insurance protects your possessions, but standard policies have exclusions. That includes roommates unless they’re named on the policy, expensive jewelry and collectibles, business equipment, and flood damage. Renters insurance also doesn’t cover the structure as that’s the landlord’s responsibility.
Why do I need renters insurance?
Renters insurance protects your personal property and protects you from liability claims. Your landlord’s policy doesn’t offer any protection for you at all.
How do I file a renters insurance claim?
Filing a renters insurance claim is similar to homeowners and condo insurance. You’ll contact your insurance company and follow the steps for filing a claim, providing details about the type of claim and what was damaged or stolen. Most companies allow you to file a claim online, over the phone, or in person if you have an agent.
- How much does renters insurance cost?
The cost of renters insurance varies. The good news is that renters insurance is much cheaper than homeowners and condo insurance. The average renters insurance costs $347 annually (about $29 monthly) for $40,000 personal property and $100,000 liability protection with a $1,000 deductible.
I want to learn more about condo insurance
How is condo insurance different from homeowners insurance?
Condo insurance is often limited to your possessions. However, depending on your HOA’s master policy, you might have to cover the floor and ceilings of your unit, too. The HOA’s master policy dictates the exact coverage needed. That’s unlike a homeowners policy, which includes the structure and your belongings.
How much condo insurance do I need?
The level of condo insurance depends on your HOA’s master policy. The master policy tells how much it’s willing to cover. Often, that protection is limited to the structure and common areas. You will need to get condo insurance for your possessions and liability.
What does condo insurance cover?
Condo insurance covers damages within your unit and personal property. It also handles liability claims if someone is injured in your condo. That coverage includes interior walls, floors, fixtures, and ceilings. To figure out what you need, check your condo association policy. They vary depending on protection.
- “All in” or “all inclusive” covers the individual units’ exterior and interior surfaces. In that case, the condo owner only needs coverage for personal property and liability coverage.
- “Special entity” covers nearly all of the condo structure. That includes fixtures. However, it doesn’t cover structural improvements or unit additions.
- “Bare walls in” and “wall studs in” covers just the bare structure. The condo owner needs to get insurance for the contents, floors, fixtures and countertops, as well as liability.
How much does condo insurance cost?
The cost of condo insurance depends on the coverage level, location, and other factors. The average condo insurance rate for a policy with $60,000 personal property coverage, $300,000 liability coverage, and a $1,000 deductible is $759 a year.
How do I file a condo insurance claim?
Much like homeowners insurance, you want to notify your insurer as soon as possible after the damage. Also, contact your condo association. Depending on the damage, the association may need to file its own claim. Document the damage and take photos. Call the insurance company with your policy number and detailed information to start the claim, and follow their instructions.
Ready to shop for Home Insurance?
Read Our Latest Articles on Home Insurance



