The Guide That Makes Choosing Cheap Home Insurance Quotes Simple

About 95% of U.S. homeowners have homeowners insurance. In 2021 homeowners are paying an average annual premium of $1,312 for a $250,000 home. With insurance premiums increasing, about 65% of homeowners are seeking cheap home insurance quotes by taking advantage of carrier discounts, including bundling their home insurance with other policies such as auto and health.

Finding affordable home insurance is crucial when you consider that in 2018 more than 98% of the home insurance claims filed were due to property damage, including losses from theft. Thirty-four percent of the claims were for wind and hail damage, and 32% were for lighting and fire damage.

When shopping for the best insurance quotes, cheap does not mean ineffective. It means finding insurance carriers that provide you with the best affordable home insurance.

Best Home Insurance Policy Coverage

When shopping for home insurance you need to review the policy carefully. It needs to include standard coverage plus any additional riders based on your needs.

Work with a company that is all-inclusive in offering auto, home, and health insurance. Check to see if they offer discounts when purchasing several types of insurance through their company.

Factors to consider when looking for the best insurance quotes include replacement cost coverage and the amount of your deductible. Other factors include the age of your home, its condition, the material it is made of, and its location.

Those factors and more play into the amount of your insurance premium, including a review of your history for filing claims and your credit score.

Replacement Cost of Home

The replacement cost of your home is the amount of money an insurance company will need to pay to rebuild the home to its former condition. The dwelling coverage portion of your insurance policy protects your home’s structure.

The replacement cost controls coverage limits for other areas of your home. This is usually on a percentage basis of about 10% for detached buildings, 20% for loss of use, and 50% for personal property.

What this means is if you insure your home for $250,000, you will have coverage of $25,000 for detached buildings, $50,000 for loss of use, and $125,000 for personal property. Your policy coverage will be comparable to the home you own and coverage percentages adjusted accordingly.

Deductible Amount

The deductible you pay has an impact on your premium. The higher the deductible, the lower the premium. In the event of a disaster, the deductible is subtracted from the amount the insurance company pays on the claim.

It is important to understand how deductibles work. Seriously consider whether you can financially handle the amount that will be deducted. Do you have access to funds to cover the deductible amount if necessary?

For example, you have a policy providing $200,000 in coverage with a $5,000 deductible and your home suffers $20,000 in damage. In that instance, you receive a check for $15,000 and need to cover the remaining $5,000 out-of-pocket.

While a $5,000 deductible may save you a few hundred dollars on your annual premium, if you cannot easily pay that amount, it is better to take a lower deductible.

Disaster Deductibles

Most standard insurance policies require additional deductibles or policies to be purchased by the homeowner. This is especially important if the home is in an area prone to specific natural disasters. 

Hurricane deductibles are common in states that are in hurricane-risk areas. The policy will likely include special deductibles when the home suffers hurricane damage.

Hurricane deductibles are usually higher than the standard homeowner's policy deductible. They are used in accordance with a “trigger” shown in the policy. This is usually applied if the National Weather Service takes specific actions, such as defining a tropical storm or hurricane.

Wind/hail deductibles may be a requirement in parts of the country, such as tornado alley (Texas, Kansas, Nebraska, Oklahoma) or in midwestern states. A standard homeowners policy usually includes wind and hail damage coverage.

If you live in an area prone to wind or hail damage, the policy may exclude coverage. To rectify this coverage gap you may need to purchase a separate windstorm policy. 

Flood insurance varies by state and is sometimes a mandatory requirement if you live in a flood area. There are about 60 insurance companies on the National Flood Insurance Program. You may suffer up to $25,000 in damages due to just one inch of floodwater.

The majority of homeowners insurance policies do not include flood damage. You may purchase a separate policy the provides coverage for the structure, contents in the structure, or both. Flood insurance is available to anyone who resides within any of the 23,000 national high-risk flood areas.

Earthquake insurance is usually done on a percentage deductible of between 2% to 20% of the replacement value of your home. This may vary depending on where the home is located.

For example, in Utah and Nevada, the deductible is usually around 10% of the replacement cost of the home. In California, the deductible is around 15% of the replacement cost.

Home’s Age, Condition, Materials, and Location

If the condition of your home indicates there is a higher likelihood you may need to file a claim, you will pay a higher premium. If the home is in a high level of disrepair insurance companies may refuse to provide coverage.

Construction considerations include having a more flammable wood structure instead of the preferable stone, brick, or stucco. The condition, quality, and age of your roof impact the risk of a leak. Older homes are more likely to be made of flammable material, increasing the fire risk.

Insurance companies also consider how many people in your home's location file insurance claims. This may happen if you are in a hurricane or tornado-prone area or a location with a high number of burglaries.

Another concern is the fire protection rating of your home. This includes the distance to the closest fire hydrant and fire station.

Attractive Nuisances

An attractive nuisance is something that will likely attract a child's attention and is a potential injury risk. This includes playgrounds, hot tubs, pools, and trampolines.

Pets

If you own an animal, such as a dog in an aggressive breed, you may have a higher premium. Some insurance companies consider the breed, others look at the dog’s bite history.

Credit Rating

Insurance carriers consider your credit score as a strong risk indicator. This is because data indicates those with lower credit scores are more likely to file insurance claims. Insurance companies charge a higher premium to cover this risk.

Shopping for Homeowners Insurance

When shopping for homeowners insurance, contact a company that provides a quote comparison from at least three companies. Prior to calling assemble the following information:

• Information about the house, inventory, and value of personal property
• Determine how much coverage you need, including additional riders for fine art, jewelry, collectibles, or coverage for floods, wind damage, etc.
• Compare price quotes and make sure they are equal coverage

Ask if the company offers additional discounts if you bundle auto or health insurance coverage through them.

Request Cheap Home Insurance Quotes

Part of your homeownership journey is shopping for insurance. Once you have gathered your information and know your coverage needs, request cheap home insurance quotes.

The process is simple at Quotelab, where you enter your zip code to begin receiving quotes. Quotelab will provide you with quotes from both local and national insurance companies. If you have any questions you are welcome to call (855) 976-5435 to speak with an agent.