Who Has the Cheapest Home Insurance? 4 Tips for Comparing Rates

Who Has the Cheapest Home Insurance? 4 Tips for Comparing Rates

July 28, 2020Home Insurance

Buying a home is a huge investment that can last a lifetime, so when it comes to getting home insurance, you want to make sure that the cheapest home insurance rate you find is also the home insurance that meets all of your needs. Even if you want to pay the lowest possible rate for your home insurance, it's wiser not to cut corners on what your insurance will cover.

4 Tips for Comparing Rates for the Cheapest Home Insurance

1. Compare Quotes From Multiple Companies

This is a good piece of advice that applies to most insurance companies - compare quotes. There are several home insurance companies that will service your area, including nationwide and local companies, so it's worth the time to compare multiple quotes from companies.

When you are getting a quote from an insurance provider, there are several questions that will be asked, such as the cost of your home, your location, and your credit score. These are each factors that will impact the rate calculated by the company.

Comparing quotes from multiple companies is very much an apples-to-apples practice. When you are comparing quotes, make sure you are comparing the basic plans and not plans that have additional coverage add-ons. The basic plans are your best baseline measurement to what additional features from the company will be.

2. Consider the Coverage You Need

The coverage you need will ultimately be the determining factor for how cheap your insurance rate will be. Make sure you understand what kind of coverage you need; basic coverage will cover the cost of rebuilding your home, but coverage for your personal possessions or additional property will add to what your total coverage costs will be.

It's worth mentioning at this point that, although it may seem smart to skip out on extra coverage now, you could end up paying a significant amount of money later on by not getting all of the coverage you need now. Common coverage plans include:

  • House or dwelling
  • Personal property
  • Temporary living expenses
  • Personal liability
  • Extra coverage, such as for expensive items like jewelry or electronics

3. Estimate Your Deductible

Home insurance at a cheap rate may look like a great deal on the outside, but it's important to consider any out-of-pocket expenses you might have, such as your deductible. Your deductible is going to be the amount of money you pay out-of-pocket for any claims that are made on your home insurance, and the way this typically goes is that the cheaper the home insurance, the higher your deductible will be.

Why does this matter? Your deductible can potentially be a sum of money that you can't pay. Think about it like this: if you make a claim on your home insurance for $7,000 in damages, can you afford to pay a deductible as high as $2,000 to get repairs done?

If not, then you might want to reconsider what cheap home insurance looks like to you. It might make more sense now to invest in home insurance that has a smaller deductible that will be cheaper for you in the long run.

4. Double-Check Your Add-Ons

Another part of your home insurance worth a second glance is the add-ons for your coverage. If you happen to live in an area frequently impacted by natural disasters like hurricanes, tornados, or flooding, then you're going to want to make sure your home insurance will cover these natural disasters.

As a point of note, most basic plans do not cover these claims, which is why they are considered add-ons. Putting one of these add-ons on your home insurance might hike the price a bit higher, but you'll be glad for it when you need the coverage and can't afford to pay out of pocket for repairs.

What's the Average Home Insurance Rate With Add-Ons?

In 2020, the average cost of home insurance for homeowners this year is $1,200 to $1,400, which comes out to about $100 a month. That's not bad. Your insurance rate will ultimately be determined by your state and the coverage you need, but finding affordable home insurance is a feasible challenge. Even with add-ons for extra coverage, your rate should still stay within the ballpark of $100 to \$150 per month.

It's important to remember that the cheapest home insurance for you might not be the cheapest home insurance around - and in fact, it's actually better for you in the long run if you can get all the coverage you need now. From comparing quotes from multiple companies to making sure you have add-ons for certain types of coverage relevant to your needs, there are ways you can get the cheapest home insurance that covers all of your bases. To learn more about how to compare home insurance, please visit our home insurance comparison page.

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