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If you own a home, you may be shopping for your home insurance with some help from yourself or an independent agent. Your home insurance is more than just another box to check your mortgage company. Home insurance can provide valuable protection for the greatest asset potential. Choosing the right home insurance company is an integral part of protecting your finances, and Bankrate’s insurance editorial team can help you do it.
How to Choose Homeowner Insurance
There are many home insurance companies in the market. So comparing providers can help you narrow down your options. Some of the most important things to consider are your location, coverage cost, and third-party ratings for your provider. The next five steps will help you understand how to choose the best homeowner insurance company for your needs.
1. Think about your place
Home insurance premiums vary by state, city, and zip code and are usually based on the common causes of local losses. For example, the cost of home insurance in high crime areas is usually more expensive than average rates in areas with low incident rates. Knowing the common causes of losses in your location will help you determine the type of coverage you need. There are a few things to consider:
- Crime Rate: If you live in an area where you are in high-voluntary, theft, or vandalism, your home’s premiums can be more expensive. You can also consider an alarm system that will protect your home and potentially earn discounts from your insurance company.
- Weather phenomenon: Living in an area where severe weather risks such as hurricanes, tornadoes, hail, etc. can have a significant impact on your home’s premiums. Keep in mind that housing insurance costs in states where there is a high risk of bad weather are usually more expensive.
- Proximity to the fire station: Homes within a mile of the fire station are often cheaper to insure. On the other hand, if you live a few miles from the fire station, you can pay more with the premium as it will take time to help you arrive. In this case, it may be beneficial to look for companies that offer discounts on fire risk reduction.
Some states, like California and Florida, have stricter home insurance markets. This will allow you to find an insurance company for your home. Working with an insurance broker will help you shop for the right insurance. If your home insurance application is repeatedly denied, you may want to look into your state’s fair plan, or the insurance options for the last resort.
2. Factors of your home’s functioning
Certain factors, such as your home area, construction materials, and safety features, can affect the cost of your home insurance. When you shop for an insurance company, it helps you find a provider that will cover those features and related discount opportunities. For example, many home insurance companies will lower their fees because they have impact-resistant roofs and residential security systems.
To avoid not being insured, consider adding an extended replacement cost value (RCV) approval. We also recommend looking at support that may be useful based on the functionality of your home, such as garden and garden coverage, water backup, sump pump coverage, and more.
3. Check out the ratings of trusted third-party
Many home insurance companies are valued by third-party organizations. When comparing insurance companies, consider looking at JD power ratings across customer satisfaction. This takes into account actual customer feedback regarding costs, agent interactions, and claim handling.
Additionally, it is helpful to look up each provider’s ratings from AM Best and Standard & Poor’s (S&P) for financial strength. Companies with strong financial stability have historically demonstrated their ability to pay policyholder claims. Many insurance companies publish these ratings on their websites.
4. Compare quotes based on coverage
When you purchase home insurance, the fees vary based on many factors that are unique to you and your home. Additionally, home insurance companies calculate prices differently. Comparing estimates from several providers for the same amount of coverage can help you determine which home insurance company is the cheapest for you.
Please note that a household insurance policy may refund losses on eligible personal property based on actual cash value (ACV). If the policy is the default for ACV with Personal Properties, you have the option to upgrade to RCV, but it will be more expensive. Purchase options like home sharing coverage and scheduled personal property coverage will also increase your fees.
Why it’s important to choose the best home insurance company
Basic home insurance coverage types are standard across airlines, but each home insurance company may provide policyholders with a different experience. This could be during the policy shopping, updates, or billing process. For this reason, it may be a priority for some homeowners to consider the desired experience, in addition to the amount of coverage they want and annual premiums.
There are several factors that can affect your decision when choosing the best home insurance company.
- Accessibility: Consider customer service options and accessibility for each company. If you want to feel safe knowing you can contact your agent anytime, you may want to prioritize businesses that receive 24/7 customer service and billing reports.
- Local Agent: Although not necessarily, many national insurance providers have offices nationwide with local agents who are experts in your geographic area.
- Digital Management: If you don’t want to work with an agent, you can find a home insurance company that has a mobile app or online customer portal that allows you to manage your insurance contracts anytime, anywhere and file claims.
- Claim: Check out JD Power’s 2025 US Property Claim Satisfaction Survey to get a sense of emotion surrounding each company’s claim processing. JD Power Assessment describes settlements, billing services, home repair processes and more.
- Available Discounts: Discounts are a great way to save on premiums. Before deciding on an insurance provider, it can be helpful to see which discounts you advertise and which discounts qualify. Bundle discounts tend to offer the best savings.
Common mistakes to avoid when choosing homeowner insurance
Avoiding these pitfalls will help you choose the right home insurance company that suits your financial needs:
- Skip cheap premium coverage: Price is important, but that’s not everything. If your home is completely destroyed with covered losses, you will probably regret lowering your compensation limits to save in the short term when you need to immerse yourself in your own funds to fund the remaining repairs. What most people overlook with their home insurance is that if your home is destroyed by a covered loss, you can’t usually “cash out.” In most cases, you have to rebuild your home. Appropriate compensation limits must be established to restore residence and property after loss.
- Haven’t read your policy: Knowing what isn’t covered by your policy is just as important as knowing what is. By reading your policy, you can give insight into what you are covered and where you may need to buy approval or additional insurance, such as flooding or umbrella insurance.
- Insist on doing it all yourself: Insurance can be confusing. If you’re not confident, you don’t have to navigate the entire process yourself. Authorized insurance agents or insurance brokers can help you navigate the shopping process.
- Ignore your deductible: Deductible represents the amount you are responsible for after you submit your claim. Typically, higher deductions will result in lower premiums, so if you are getting a more expensive insurance quote, consider increasing your deductible.
- Cheap doesn’t always mean better: The best home insurance company for you doesn’t necessarily offer you the cheapest rates. If something happens to your home at a covered event, you need to make sure your home insurance company is there when you need it through the availability of that service and the ability to pay bills.
I felt that choosing quality coverage at the cheapest rate gave me the peace of mind I needed to make sure my home was properly covered.
– Amy Sims
Editor-in-Chief of Bankrate
Bankrate Editor Amy Sims explained why quality of coverage has become more important to her than finding the cheapest policy for her home.
“When I bought my home, I recommended that real estate agents get an estimate of insurance brokers and homeowners’ insurance that offer ‘cheap rates’,” Sims said. “However, I decided to stay with USAA, the homeowner’s insurance company in my previous home. In the end, my ‘cheap rate’ doubled. I had history with them so I stayed in USAA.
