Call our licensed agents toll free 844.855.0163
Go To Top

What is homeowners insurance?

Homeowners insurance is financial protection that pays for damage to your home and belongings, and for visitor’s injuries and legal expenses if you’re sued because of an accident. It is comprised of different types of coverages that pay to repair or replace your home and your personal items if damaged, under certain conditions, for instance from fire. It also pays for the medical bills of those injured in your home and for legal expenses if you are sued by an injured guest.

What does homeowners insurance cover?

Homeowners insurance covers you in case your home gets damaged by fire, weather or other reasons, such as burglary. Insurance helps you if you must file a claim. If approved, the insurer will provide reimbursement minus your deductible. Your deductible is what you agree to pay if you file a claim. Deductibles are often between $500 and $1,000 but can go higher. Home insurance also provides liability coverage. Liability protects you in case someone gets injured on your property or you get sued.

You can also get coverage if you have a condo or rent. Condo and Renters insurance work similarly as homeowners insurance. However, there are distinct differences between homeowners and renters and condo insurance.

Dwelling Coverage

Dwelling-Coverage-icon

Insurance covers your home and property for “covered perils.” Coverage includes damage from fire, smoke, storms, lightning, hail, vandalism and damage from a car. Property damage coverage is meant to repair your home or completely rebuild the structure if needed.

Personal Property

Personal-Property-icon

Personal property protection covers your possessions, such as clothing, furniture, electronics and appliances. Coverage for your belongings is usually between 50% and 70% of your dwelling’s coverage. You can also buy additional protection.

Liability Insurance

Liability-Insurance-icon

Liability protection covers you if you’re sued for bodily injury or property damage 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

Valuable-Items-icon

Standard home insurance policies usually offer limited coverage for items like jewelry. Homeowners should take an inventory of belongings to gauge how much protection is needed for valuable items. You can increase coverage limits or endorsement for higher coverage limits.

Additional Living Expenses

Additional-Living-Expenses-icon

Additional living expenses protection helps you out if a fire, storm or other covered peril damages your home and it is unlivable. The coverage provides compensation to live elsewhere temporarily. That protection includes paying for hotel and restaurant bills and other living expenses.

Guest Medical Payments

Guest-Medical-Payments-icon

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. This coverage helps avoid potential litigation or use of liability coverage.

Types of home insurance

HOMEOWNER INSURANCE

Home insurance protects your house from various perils, such as damage caused by theft, burst pipes, robbery, and severe weather. It includes coverage for your structure, personal belongings, liability coverage and guest medical. Homeowners insurance protects your biggest investment and can advert 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 should have a separate insurance policy to protect the structure but that will not 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.

Top 5 Home Insurance Companies

USAA

USAA

Our Score
infoiconinfoicon
HOW WE WEIGH OUR SCORE
Customers Who Recommend
Who Plan to Renew
Customers Who Recommend
Who Plan to Renew
Value for Price
Customer Service
Claims Service
Website & Apps
State Farm

State Farm

Our Score
infoiconinfoicon
HOW WE WEIGH OUR SCORE
Customers Who Recommend
Who Plan to Renew
Customers Who Recommend
Who Plan to Renew
Value for Price
Customer Service
Claims Service
Website & Apps
American Family

American Family

Our Score
infoiconinfoicon
HOW WE WEIGH OUR SCORE
Customers Who Recommend
Who Plan to Renew
Customers Who Recommend
Who Plan to Renew
Value for Price
Customer Service
Claims Service
Website & Apps
Liberty Mutual

Liberty Mutual

Our Score
infoiconinfoicon
HOW WE WEIGH OUR SCORE
Customers Who Recommend
Who Plan to Renew
Customers Who Recommend
Who Plan to Renew
Value for Price
Customer Service
Claims Service
Website & Apps
Allstate

Allstate

Our Score
infoiconinfoicon
HOW WE WEIGH OUR SCORE
Customers Who Recommend
Who Plan to Renew
Customers Who Recommend
Who Plan to Renew
Value for Price
Customer Service
Claims Service
Website & Apps

How much is home insurance?

Homeowners insurance costs vary based on location, claims history, risk and even your credit history. You’ll pay more for home insurance if you’re in an area with higher claims. That may be a region with severe weather, such as hurricanes or tornadoes. It could also be an area with many break-ins and fires. Home insurance companies take all of that into account when devising rates. The average home insurance rate for $300,000 dwelling coverage and $300,000 liability with a $1,000 deductible is $2,305 annually. However, home insurance rates vary by state. Homeowners in some states pay double that amount on average.

Oklahoma, Kansas, Florida, Arkansas, Texas, Mississippi and Louisiana are the most expensive states for home insurance among common coverage levels analyzed by Insurance.com. Among the least expensive states for home insurance are Hawaii and Vermont.

It all goes back to risks. Florida, Texas, Mississippi and Louisiana are prone to hurricanes, while Oklahoma, Kansas and Arkansas experience lots of tornadoes. Insurers charge a higher rate in those riskier states. You can’t avoid paying more if you live in an expensive area. However, shopping around can lead to lower rates.

Find average home insurance rates by ZIP code for 75 different coverage levels

HOMEINSURANCE RATES

by zip code
Please enter valid zipcode

CONDOINSURANCE RATES

by zip code
Please enter valid zipcode

RENTERSINSURANCE RATES

by zip code
Please enter valid zipcode

5 most important things to know as you compare home insurance

  • 1You should buy enough home insurance to cover the cost of rebuilding.
  • 2Your landlord's insurance won't cover your stuff.
  • 3A good inventory is worth your time.
  • 4Replacement cost coverage may be worth the extra expense.
  • 5A home or renters insurance policy doesn't cover everything

You should buy enough home insurance to cover the cost of rebuilding.

One of the most common mistakes people make when shopping for home insurance is thinking the coverage should equal the home's market value. But home insurance is designed to pay for the cost to rebuild your home if it's destroyed. That amount might be lower or higher than what you paid for the house. In recent years many homeowners who lost homes in disasters found themselves caught short because they were underinsured.

A good home insurance agent can help you estimate, and it wouldn't hurt to ask a local contractor about building costs in your area. Online calculators to estimate the replacement cost are also available through services such as HMFacts and AccuCoverage.

Your landlord's insurance won't cover your stuff.

Don't expect the landlord to help you replace anything if disaster strikes. His insurance covers the building - not your things. Buy renters insurance to protect your belongings in case they're stolen or damaged by fire or other perils. Like home insurance, renters insurance also provides liability coverage in case you unwittingly injure others or damage their property and are held responsible.

A good inventory is worth your time.

Conduct an inventory to find out how much coverage you need. Check whether your insurance company offers an inventory app, or use the Insurance Information Institute's free online software at KnowYourStuff.org to help catalog everything. Beware that standard home and renters insurance policies place dollar limits on coverage for valuables and special collections, so you might need to buy additional coverage for those items. Besides helping you determine how much coverage you need, an inventory helps the claims process go smoothly if something unfortunate happens.

Replacement cost coverage may be worth the extra expense.

Replacement cost coverage is pricier than actual cash value coverage, and here's why. With replacement cost coverage, the policy reimburses you to buy a new, comparable item to replace the one that was damaged. Actual cash value coverage pays you the current market value of the item that was damaged or destroyed. Say, for instance, a pipe burst and ruined a 5-year-old couch. Replacement cost coverage would pay for a new sofa. Actual cash value coverage would reimburse you for cost of a new sofa minus five years of depreciation.

A home or renters insurance policy doesn't cover everything

Standard home and renters insurance policies do not cover damage from earthquakes or floods. You need to buy separate insurance policies for coverage in case either of those disasters strikes. Home and renters insurance also don't provide any liability coverage for business activities, even when the business is conducted from your home office. And they limit coverage for business-related property.

How to save money on homeowners insurance

The most effective way to save on home insurance is to comparison shop, maintain good credit, file only claims that are for major damage and to get all the discounts that match your homeowner profile.

Compare home insurance quotes: You should compare homeowners insurance quotes from at least three carriers at least every year upon renewal to be sure you’re getting the best deal. Insurance companies each use their own calculations for assessing risk and deciding what you pay for coverage. That means the price for the same policy can differ by hundreds of dollars. You can’t save if you don’t shop around.

Maintain good credit: Homeowners with bad credit pay significantly more for coverage than those with good credit. By maintaining a healthy credit history, or improving your credit standing, you will ensure you pay less overall for insurance coverage, all else being equal.

Don’t file claims for minor damage: Typically, the more claims you file, the higher your insurance rate will be. By all means file claims for significant damage, but hold off if claims are for minor damage, say under $2,000 or so, to keep your costs low.

Maximize discounts: Be sure you get all the discounts for which you qualify. These may include discounts for bundling coverage with your car insurance, for installing security devices, for using weather resistant building materials, for staying with the same company over a period of years, among other scenarios.

I want to learn more about Home Insurance.

I want to learn more about Renters Insurance

I want to learn more about Condo Insurance

Home Insurance Glossary

Ready to shop for Home Insurance?

Please enter valid zipcode
Nocheck-icon

Read Our Latest Articles on Home Insurance

Loss of use coverage: Everything you need to know
Read Article
What’s the difference between HO3 and HO5 home insurance?
Read Article
Is homeowners insurance tax-deductible?
Read Article
Rent vs. owning: It’s cheaper to own a home than rent in some markets
Read Article
See all articles