The average American pays $2,285/year for homeowners insurance, but rates vary by up to 300% between companies for identical coverage. This guide shows you how to compare quotes, maximize discounts, and save hundreds annually.
Potential Savings
- Shopping around: 20-40% by comparing 5+ quotes
- Bundling auto + home: 10-25% discount
- Increasing deductible: 10-25% savings per $500 increase
- Security systems: 5-20% discount
Top Home Insurance Companies 2025
| Company | Best For | Avg. Annual Rate | J.D. Power Rating |
|---|---|---|---|
| State Farm | Overall value | $1,900 | 835/1000 |
| USAA | Military families | $1,400 | 890/1000 |
| Amica | Customer service | $2,100 | 858/1000 |
| Erie | Midwest/East Coast | $1,600 | 842/1000 |
| Allstate | Digital tools | $2,400 | 810/1000 |
| Progressive | Bundling | $2,200 | 795/1000 |
Understanding Coverage Types
Dwelling Coverage (Coverage A)
Covers the cost to rebuild your home if damaged by covered perils. Should equal your home's rebuilding cost (not market value).
Other Structures (Coverage B)
Covers detached garages, fences, sheds. Usually 10% of dwelling coverage.
Personal Property (Coverage C)
Covers belongings inside your home. Usually 50-70% of dwelling coverage.
- Actual Cash Value (ACV): Pays replacement cost minus depreciation
- Replacement Cost: Pays to replace with new items (worth the extra cost)
Liability (Coverage D)
Protects if someone is injured on your property. Minimum $100,000, recommend $300,000-500,000.
Loss of Use (Coverage E)
Pays for hotel, meals if home is uninhabitable during repairs.
What's NOT Covered
Standard Exclusions
- Floods: Requires separate flood insurance (NFIP or private)
- Earthquakes: Requires earthquake endorsement/policy
- Maintenance issues: Wear, tear, mold, pests
- Sewer backups: Requires add-on coverage
- High-value items: Jewelry, art may need scheduled items
- Home business: May need business policy
All Available Discounts
| Discount Type | Typical Savings | How to Qualify |
|---|---|---|
| Multi-policy bundle | 10-25% | Auto + home with same insurer |
| Claims-free | 5-20% | No claims in 3-5 years |
| New home | 5-15% | Home built within 10 years |
| Security system | 5-20% | Monitored alarm, cameras |
| Smart home devices | 2-10% | Leak detectors, smart locks |
| Roof age | 5-15% | New roof (under 10 years) |
| Loyalty | 3-10% | Stay with same insurer 3+ years |
| Pay in full | 2-10% | Annual payment vs monthly |
| Paperless billing | 1-5% | Electronic statements |
| 55+ / Retiree | 5-10% | Age-based discount |
How to Shop for Home Insurance
Step-by-Step Process
- Calculate your coverage needs: Dwelling cost, personal property value
- Get 5+ quotes: Direct insurers + independent agents
- Compare apples to apples: Same coverage limits, deductibles
- Check financial ratings: AM Best rating of A or higher
- Read reviews: Claims experience matters most
- Ask about discounts: Don't assume they're applied
- Review annually: Prices change, shop every 1-2 years
Where to Get Quotes
- Direct insurers: State Farm, Allstate, GEICO, Progressive
- Comparison sites: Policygenius, The Zebra, Gabi
- Independent agents: Compare multiple companies at once
- Your current insurer: They may have better rates for bundling
Ways to Lower Your Premium
Cost-Cutting Strategies
- Increase your deductible: $1,000 to $2,500 saves 10-25%
- Bundle with auto: Almost always worth it
- Improve home security: Alarms, cameras, smart locks
- Upgrade roof: Impact-resistant materials save up to 20%
- Ask for all discounts: Many aren't automatically applied
- Maintain good credit: Impacts rates in most states
- Review coverage annually: Ensure you're not over-insured
When to File a Claim (and When Not To)
Claim Decision Guide
File a claim if:
- Damage exceeds deductible by $1,000+
- Liability claim (someone injured)
- Major damage requiring repairs
Don't file if:
- Cost is close to or under deductible
- Minor cosmetic damage
- You've had recent claims (premium increase likely)
Special Situations
High-Risk Areas
- Hurricane zones: May need separate windstorm policy
- Flood zones: NFIP or private flood insurance required
- Wildfire areas: FAIR Plan may be only option
- Earthquake zones: California Earthquake Authority (CEA)
Older Homes
- May face higher rates or limited coverage
- Consider HO-8 policy (actual cash value)
- Update electrical, plumbing, roof for better rates
Red Flags to Watch For
- Company not licensed in your state
- AM Best rating below B+
- Poor claims reviews
- Pressure to sign immediately
- Price seems too good to be true
- Unclear coverage details