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How to shop for home insurance: A Step-By-Step Guide
Shopping for homeowners insurance is about obtaining the correct protection for your house, your valuables and your financial future. In this tutorial, you'll learn what homeowners insurance covers, what impacts your price, how to compare quotes, and the important homeowners insurance rating elements insurance companies use to compute your rate.
At HoneyQuote, we're a licensed independent insurance agency serving homeowners across Florida. We compare home insurance quotes from 20+ trusted insurance carriers to help homeowners find the right coverage at a competitive price. While this guide is helpful no matter where you live, our live quote data and carrier insights reflect the coastal markets we serve.
By the end of this guide, you'll know how to shop for home insurance: what to compare, which questions to ask, and how to confidently shop for homeowners insurance.
Protect your home without overpaying
Comparing homeowners insurance doesn't have to be stressful. HoneyQuote helps you compare trusted insurance companies, understand your options, and find the right coverage at a competitive price.
Article Takeaways
Compare more than just the premium. Review coverage limits, deductibles, exclusions, and the insurance company's financial strength before choosing a policy. The cheapest homeowners insurance isn't always the best value.
The coverage you choose has a bigger impact on your premium than many homeowners realize. Finding the right balance of deductible, coverage limits, and endorsements can help you protect your home while keeping your insurance costs affordable.
HoneyQuote compares quotes from 20+ trusted insurance carriers across 23 coastal states to help you find the right coverage at a competitive price. We never sell your personal information, so you can compare your options without worrying about unwanted spam calls.
How does home insurance work?
Home insurance covers your home and possessions against covered losses for a premium. You pay your premium to keep your policy in force, and if a covered loss occurs, you pay your deductible, after which your insurance company pays the rest of the covered costs up to your policy limits.
A standard homeowners insurance policy typically covers your home, other structures, personal belongings, personal liability, and additional living expenses if a covered loss makes your home temporarily uninhabitable. Because every policy has different coverage limits, deductibles, and exclusions, it's important to understand what's covered before you buy.
One of the most common myths is that your homeowner's insurance will cover flood damage. Most of the time it doesn't. Flood insurance is generally purchased separately, and some coastal homeowners may also have separate wind or hurricane deductibles.
Learning how your premium, deductible and coverage limits interact will help you choose the right coverage for your home and budget.
How your premium, deductible, and coverage limits work together
Your premium, deductible and coverage limits are all factors in the cost of your policy and the amount of coverage you have.
Premium
Your premium is the amount you pay to keep your homeowners insurance policy active, typically on a monthly or annual basis.
Deductible
Your deductible is the amount you pay out of pocket before your insurance coverage begins. Choosing a higher deductible can lower your premium, while a lower deductible typically increases it.
Coverage limits
Your coverage limits are the maximum amount your insurance company will pay for a covered loss. Choosing limits that reflect your home's rebuilding cost and the value of your belongings helps ensure you have the protection you need.
How a home insurance claim is paid
Once you file a covered claim, your insurance company will assess the damage and determine what your policy covers. If you have a mortgage, you may often have payments on major repairs made out to you and your mortgage lender, since the lender has a financial stake in the property. Your lender might hold back some of the funds in escrow and only release it once repairs are done.
Larger claims are usually paid in installments. An initial payment could fund the first stage of repairs, with further funds released as repairs continue and are documented.
It's also important to understand the difference between replacement cost and actual cash value (ACV) coverage. Replacement cost pays to repair or replace damaged property with materials of similar quality, subject to your policy limits. Actual cash value pays the current value of damaged property after depreciation, which generally results in a lower claim payment.
Understanding which type of coverage your policy provides can help you avoid unexpected out-of-pocket costs after a covered loss.
What does homeowners insurance cover?
A standard homeowners insurance policy helps protect your home, your belongings, and your financial well-being when a covered loss occurs. Most policies include six primary coverage types, each designed to protect a different part of your property or provide financial protection.
Coverage amounts vary by policy. In many cases, other structures, personal property, and loss of use coverage are calculated as a percentage of your dwelling coverage. Personal liability and medical payments coverage work differently — their limits are selected separately and aren't based on your home's insured value.
Dwelling coverage
(Coverage A)
Dwelling coverage helps pay to repair or rebuild your home's structure if it's damaged by a covered loss, such as fire, wind, hail, or lightning. This includes the roof, walls, foundation, built-in appliances, and attached structures like an attached garage. It generally doesn't cover flood damage or normal wear and tear.
Example: a windstorm damages your roof and siding. Dwelling coverage helps pay to repair your home's structure, minus your deductible.
Other structures coverage
(Coverage B)
Other structures coverage helps protect buildings on your property that aren't attached to your home, such as detached garages, fences, sheds, gazebos, and workshops. This coverage is typically 2% of your dwelling coverage, although you may be able to increase the limit if you need additional protection.
Example: a windstorm damages your detached garage and backyard fence. Other structures coverage helps pay to repair or replace them after you pay your deductible.
Personal property coverage
(Coverage C)
Personal property coverage helps pay to repair or replace your belongings after a covered loss. This includes furniture, clothing, electronics, and other personal items. Coverage is typically 25% to 50% of your dwelling coverage, depending on your policy. High-value items, such as jewelry, artwork, firearms, and collectibles, may require additional endorsements for full protection.
Example: a kitchen fire damages your furniture, clothing, and electronics. Personal property coverage helps replace your belongings, subject to your policy limits.
Loss of use coverage
(Coverage D)
If a covered loss makes your home temporarily uninhabitable, loss of use coverage helps pay for additional living expenses while your home is repaired or rebuilt. This may include hotel stays, restaurant meals, and other necessary expenses beyond your normal cost of living. It covers only the extra costs you incur, not your regular mortgage payment or everyday living expenses.
Example: after a house fire, your family stays in a hotel for several weeks while your home is repaired. Loss of use coverage helps pay those additional living expenses, subject to your policy limits.
Personal liability coverage (Coverage E)
Personal liability coverage helps protect you financially if you're legally responsible for someone else's injuries or property damage. It can help pay legal defense costs, settlements, or judgments up to your policy limits.
Example: a guest slips on your icy walkway and is injured. Personal liability coverage may help pay for their medical expenses, legal costs, and other covered damages if you're found legally responsible.
Medical payments coverage (Coverage F)
Medical payments coverage helps pay for minor medical expenses if a guest is injured on your property, regardless of fault. It applies to guests, not household members, and may help resolve minor injuries before they become larger liability claims.
Example: a visitor trips on your front steps and needs stitches. Medical payments coverage may help pay their medical bills, even if you weren't legally responsible for their injury.
Replacement cost vs. actual cash value vs. extended replacement cost
Not all homeowners insurance policies settle claims the same way. Understanding how your policy pays a claim can make a difference in what you'll receive after a covered loss.
Replacement cost pays to repair or replace damaged property with materials of similar quality, without deducting for depreciation, up to your policy limits.
Actual cash value (ACV) pays the current value of damaged property after depreciation, which generally results in a lower claim payment.
Extended replacement cost provides additional protection if the cost to rebuild your home exceeds your dwelling coverage limit due to increased labor or material costs. Depending on your policy, it may pay an additional percentage above your dwelling limit.
Example: after a major hurricane, rebuilding costs increase because labor and construction materials become more expensive. If your home costs more to rebuild than your dwelling coverage limit, extended replacement cost coverage may help cover the additional expense, subject to your policy terms.
What homeowners insurance doesn't cover
While homeowners insurance protects against many common risks, it doesn't cover every type of loss. Understanding what's excluded from your policy can help you avoid unexpected expenses and determine whether additional coverage is right for your home. Most standard policies do not cover:
- Flood damage — requires a separate flood insurance policy
- Normal wear and tear — insurance covers sudden, accidental damage, not damage caused by age or everyday use
- Lack of maintenance — damage resulting from neglected repairs is generally not covered
- Pest damage — termites, rodents, insects, or other pests are typically excluded
- Intentional damage — damage caused intentionally by the homeowner is not covered
Many of these coverage gaps can be addressed with separate policies or endorsements. For example, if you live in a flood-prone area, a separate policy may be needed to fully protect your home. Learn more in our flood insurance guide.
How much does home insurance cost?
Homeowners insurance costs vary more by state than almost any other factor. Insurance companies calculate premiums based on local storm risk, rebuilding costs, claims history, and state insurance regulations, which is why homeowners with similar homes can pay very different premiums depending on where they live.
Finding the right home insurance just got easier
You don't have to spend hours comparing policies, deductibles, and coverage options. A licensed HoneyQuote insurance professional shops 20+ trusted insurance carriers for you, explains your options in plain language, and helps you find the right coverage.
How to shop for home insurance in 7 steps
Shopping for homeowners insurance doesn't have to be complicated. Follow these seven steps to compare coverage with confidence and choose the policy that's right for your home.
The 7 steps at a glance
- Decide how much coverage you need
- Gather these 6 details before you request quotes
- Choose your deductibles
- Add the coverage a standard policy doesn't include
- Get at least three quotes and compare them line by line
- Vet the insurance company, not just the price
- Buy your policy, set the start date, and cancel your old one correctly
Step 1: Decide how much coverage you need
Before requesting quotes, determine how much coverage your home needs. Choosing the lowest limit may save money upfront but could leave you underinsured after a covered loss. Consider:
- Your home's rebuilding cost (not its market value)
- The value of your personal belongings
- Your liability protection needs
- Your mortgage lender's requirements, including the 100% replacement cost guideline
Create a simple video home inventory by recording each room and your valuables. It can make the claims process much easier after a covered loss.
Step 2: Gather these 6 details before you request quotes
The more accurate your information, the more accurate your quote. Before requesting homeowners insurance quotes, have these details ready:
- Square footage and year built
- Roof age, shape, and material
- Electrical, plumbing, and HVAC updates
- Major renovations or improvements
- Liability risks (pool, trampoline, certain dog breeds)
- How the home is used (primary, second home, or rental)
Tip: you can find much of this information on your county property appraiser's website or your current declarations page.
Coastal homeowners: have these documents ready
If you live in a coastal area, these documents may improve your insurance options or qualify you for discounts:
- Wind mitigation inspection
- 4-point inspection
- Opening protection verification
Depending on your home and location, these inspections may qualify you for valuable discounts or improve your insurance options.
Step 3: Choose your deductibles
The more accurate your information, the more accurate your quote. Before requesting homeowners insurance quotes, have these details ready:
- Square footage and year built
- Roof age, shape, and material
- Electrical, plumbing, and HVAC updates
- Major renovations or improvements
- Liability risks (pool, trampoline, certain dog breeds)
- How the home is used (primary, second home, or rental)
Tip: you can find much of this information on your county property appraiser's website or your current declarations page.
Understand hurricane deductibles
Many coastal homeowners have a separate hurricane or named-storm deductible based on a percentage of their dwelling coverage rather than a flat dollar amount. For example:
- Home insured for $400,000
- 2% hurricane deductible = $8,000
- 5% hurricane deductible = $20,000
Understanding your hurricane deductible can help you avoid unexpected out-of-pocket costs after a major storm.
Step 4: Add the coverage a standard policy doesn't include
A standard homeowners insurance policy doesn't protect against every type of loss. Depending on where you live, you may need additional protection, including:
- Flood insurance
- Windstorm coverage in some coastal markets
- Sewer backup coverage
- Scheduled personal property endorsements
- Water backup coverage
- Equipment breakdown coverage
Adding the right endorsements can provide valuable protection and help close common coverage gaps before a loss occurs.
Step 5: Get at least three quotes and compare them line by line
Don't compare premiums alone. Review at least three homeowners insurance quotes side by side and compare:
- Dwelling coverage
- Other structures coverage
- Personal property limits
- Liability limits
- Deductibles
- Replacement cost options
- Policy exclusions
- Endorsements
- Available discounts
- Financial strength of the insurance company
Homeowners Insurance Quote Comparison Worksheet
To make comparing easier, download our Homeowners Insurance Quote Comparison Worksheet. It helps you compare coverage line by line so you can choose the best value, not just the lowest price.
Step 6: Vet the insurance company, not just the price
The lowest premium isn't always the best value. Before purchasing a policy, take a few minutes to evaluate the insurance company behind the quote. A financially strong, reputable insurer can make a significant difference when it's time to file a claim. Before choosing a homeowners insurance company, be sure to:
- Verify the company is licensed in your state. State insurance departments maintain lists of licensed insurers authorized to sell homeowners insurance.
- Review the company's complaint history. Most state insurance departments publish consumer complaint data, which can help you identify companies with patterns of customer service or claims issues.
- Check the company's financial strength. Independent rating agencies, such as AM Best, evaluate an insurer's financial stability and ability to pay claims, especially after widespread disasters.
- Research customer claims satisfaction. Reviews from independent sources can provide insight into how insurers handle claims, communicate with policyholders, and resolve problems.
Step 7: Buy your policy, set the start date, and cancel your old one correctly
Once you've chosen a policy, confirm the effective date to avoid a lapse in coverage. If you're buying a home, your lender will typically require coverage before closing, and your first year's premium may be paid through your closing costs or escrow account.
Never cancel your current policy until your new coverage is confirmed in writing.
Before your policy takes effect:
- Confirm the effective date.
- Review your coverages, deductibles, and endorsements.
- Verify your lender has proof of insurance, if applicable.
- Cancel your old policy only after your new one is active.
These final steps can help ensure a smooth transition and prevent an unexpected lapse in coverage.
Questions to ask before you buy a homeowners insurance policy
Choosing homeowners insurance isn't just about comparing prices. Asking the right questions can help you better understand your coverage, avoid surprises after a claim, and feel confident you're choosing the right policy. Use this checklist when speaking with an insurance professional or comparing quotes online.
Is my dwelling coverage based on replacement cost or actual cash value?
This is one of the biggest differences between two quotes that appear similar. A good answer is replacement cost, along with the amount of dwelling coverage provided. A red flag is an agent who can't clearly explain how your home would be rebuilt after a covered loss.
How did you calculate my rebuild cost, and what happens if it costs more to rebuild?
Rebuilding costs have increased significantly in recent years due to higher labor and material costs. Ask whether your policy includes extended replacement cost coverage and, if so, how much additional protection it provides above your dwelling limit.
What deductible applies if I file a claim?
Many homeowners focus on the premium but overlook the deductible. Make sure you understand both your standard deductible and any separate deductibles that may apply.
Do I have a separate hurricane or named-storm deductible?
If you live in a coastal area, hurricane deductibles are often calculated as a percentage of your dwelling coverage rather than a flat dollar amount. A good answer includes both the percentage and the actual dollar amount you'll be responsible for after a covered storm.
What important exclusions should I know about?
Every homeowners insurance policy has exclusions. Ask whether flood, windstorm, water backup, sewer backup, or other common risks require separate coverage or endorsements.
Are there endorsements you recommend for my home?
Every home is different. A knowledgeable insurance professional should explain optional coverages that fit your home's location, age, and individual risks rather than recommending the same endorsements to everyone.
How does the claims process work if I have a loss?
You should understand what happens before you ever need to file a claim. A good answer explains how to report a claim, what to expect during the inspection, and how claim payments are handled.
Who do I contact if I have questions after I buy my policy?
Knowing who will assist you after your policy is issued is just as important as getting a competitive quote. A good answer clearly explains whether you'll work with a dedicated agent, a service team, or the insurance company directly.
Is this insurance company licensed in my state?
Only purchase homeowners insurance from companies authorized to do business in your state. Licensed insurers are regulated by your state's insurance department and must meet financial and consumer protection requirements.
What is the company's AM Best financial strength rating and claims reputation?
A financially strong insurance company is better positioned to pay claims after widespread disasters. Look for insurers with strong financial ratings and a reputation for fair, responsive claims service.
Can you explain why you're recommending this policy over the others?
The best policy isn't always the least expensive. A good answer should explain the differences in coverage, deductibles, endorsements, and overall value, not just the premium.
Can I review my policy before it's finalized?
Always review your coverage limits, deductibles, endorsements, and exclusions before purchasing your policy. A reputable insurance professional should encourage questions and make sure you understand exactly what you're buying before coverage begins.
Is homeowners insurance required, and how does it work with your mortgage?
Many homeowners purchase insurance because their mortgage lender requires it, but there's often confusion about what's legally required, what your lender expects, and how your insurance premium is paid. Understanding these differences can help you avoid costly mistakes and make more informed decisions about your coverage.
Is homeowners insurance required by law?
Homeowners insurance is not required by law in any state, but most mortgage lenders require it as a condition of your loan. For most homeowners, that makes coverage effectively mandatory until the mortgage is paid off.
If you own your home outright, homeowners insurance is optional. However, without coverage, you'll be responsible for the full cost of repairing or rebuilding your home after an uninsured loss. Some HOAs and condominium associations may also require homeowners insurance, even if you don't have a mortgage.
If your policy lapses, your lender may purchase force-placed insurance on your behalf. Force-placed coverage is typically more expensive and generally protects only the lender's interest in the home's structure, not your belongings, liability, or additional living expenses.
Is hazard insurance the same as homeowners insurance?
Hazard insurance is not the same as homeowners insurance — it's one part of it. Hazard insurance refers to dwelling coverage (Coverage A), which helps repair or rebuild your home's structure after a covered loss. Mortgage lenders focus on this coverage because your home secures the loan.
A standard homeowners insurance policy also includes coverage for other structures, personal property, loss of use, personal liability, and medical payments. When your lender asks for hazard insurance, a standard homeowners policy generally satisfies that requirement — you don't need a separate policy.
Keep in mind that hazard insurance doesn't cover flood damage, and in some coastal areas, windstorm coverage may also be separate. Learn more about flood insurance.
How escrow pays your homeowners insurance premium
If you have an escrow account, your mortgage lender collects a portion of your annual homeowners insurance premium with each monthly mortgage payment and pays your insurance company when your policy renews.
Even if your insurance is paid through escrow, you still choose your insurance company and policy. If you switch insurers, notify your mortgage servicer and provide your new declarations page to help prevent duplicate payments or a lapse in coverage.
If your homeowners insurance premium increases, your monthly mortgage payment may also increase after your lender's annual escrow analysis, even if your interest rate stays the same. Our guide to the cheapest homeowners insurance covers why rates are rising.
If you're buying a home, your first year's premium is often paid at closing before future renewals are paid through your escrow account. See Step 7 to coordinate your policy's effective date and avoid gaps in coverage.
What to do if your home insurance is cancelled or non-renewed
Receiving a cancellation or non-renewal notice can be stressful, but it doesn't necessarily mean you won't be able to find homeowners insurance. The most important thing is to act quickly. Understanding why your policy is ending and exploring your options early can help you avoid a lapse in coverage.
Address any underwriting issues
Sometimes homeowners can improve their eligibility by addressing the issues that led to the cancellation or non-renewal. Common examples include:
- Replacing an aging roof
- Trimming overhanging trees
- Repairing damaged siding or fencing
- Updating outdated electrical, plumbing, or HVAC systems
- Installing safety or security features
Completing these improvements may expand your insurance options and help you qualify for more competitive rates.
Avoid a gap in coverage
Maintaining continuous homeowners insurance is important. Even a short lapse in coverage can make it more difficult or expensive to obtain a new policy.
If you have a mortgage, notify your lender as soon as you secure replacement coverage. This helps prevent force-placed insurance, which is typically more expensive and provides less protection than a standard homeowners insurance policy.
Explore alternative insurance options
If several insurance companies decline your application, you may still have options. Independent insurance agencies can compare multiple carriers, including companies that specialize in higher-risk homes or unique property types.
In some states, homeowners who cannot obtain coverage through the standard market may also qualify for a state-sponsored insurance plan or insurer of last resort.
Review your new policy carefully
Before purchasing replacement coverage, compare more than just the premium. Review your dwelling coverage, deductibles, exclusions, endorsements, and available discounts to make sure your new policy provides the protection your home needs.
A lower premium may come with reduced coverage, so understanding what's included before your policy begins can help prevent surprises if you ever need to file a claim.
Why coastal homeowners choose HoneyQuote
Built for the coast
Coastal homeowners face unique risks, from hurricanes and hail to high winds and flooding. HoneyQuote works with carriers that understand these challenges, helping you find coverage designed for your area's unique risk.
The best rate for the right coverage
The lowest premium isn't always the best policy. HoneyQuote compares from 20+ trusted insurance carriers to help you find coverage that fits your home, your needs, and your budget.
We read the fine print for you
Insurance policies can be difficult to understand. Our licensed insurance professionals explain your coverage in plain language, so you know what's included, what's excluded, and where you may need additional protection before you buy.
Partners through your journey
You're not navigating homeowners insurance alone. From comparing quotes and choosing coverage to renewals and claims, your dedicated local insurance professional is here to help you make confident insurance decisions every step of the way.
Skip the homework. We'll do the shopping for you.
Comparing homeowners insurance doesn't have to be your next weekend project. A licensed HoneyQuote insurance professional shops 20+ trusted insurance carriers, compares the coverage for you, and helps you find the right policy, all in just a few minutes.
How to shop for home insurance: FAQs
What is the 100% rule in homeowners insurance?
The 100% rule in homeowners insurance means your home should be insured for at least 100% of its replacement cost to receive full reimbursement for a covered partial loss. Insuring your home to its estimated rebuilding cost can help avoid unexpected out-of-pocket expenses.
How much home insurance do I need?
The amount of homeowners insurance you need depends on your home's rebuilding cost, the value of your belongings, and the liability protection that's appropriate for your financial situation. Rather than choosing coverage based on your home's market value, make sure your dwelling limit reflects what it would cost to rebuild your home after a covered loss.
How many quotes should I get before buying home insurance?
You should compare at least three homeowners insurance quotes before purchasing a policy. Looking at multiple quotes helps you compare coverage, deductibles, endorsements, and premiums side by side. Remember, the lowest premium isn't always the best value if the policy provides less protection.
What should you not say when filing a home insurance claim?
When filing a homeowners insurance claim, avoid guessing about what caused the damage before the claim has been investigated. Stick to the facts, document the damage with photos or videos, and answer your insurance company's questions honestly. If you're unsure about something, it's better to say you don't know than to speculate.
Is homeowners insurance a rip-off?
Homeowners insurance is not a rip-off; it's financial protection against losses that could otherwise cost tens or even hundreds of thousands of dollars. While premiums have increased in many parts of the country, especially in coastal markets, a policy can provide valuable protection for your home, belongings, liability, and temporary living expenses after a covered loss.
Is it cheaper to buy home insurance online or through an agent?
Buying homeowners insurance online isn't always cheaper than working with an insurance agent. Premiums are generally set by the insurance company, regardless of how you purchase the policy. An independent agent can often compare multiple insurance companies, explain your coverage options, and help you find the best value for your needs.
How often should I shop my home insurance policy?
You should review your homeowners insurance at least once a year, ideally before your policy renews. It's also a good idea to compare quotes after a significant premium increase, home renovation, or major life event. Because insurance rates and coverage options change over time, shopping your policy regularly can help you find the right protection at a competitive price.
Will getting quotes flood me with spam calls?
Getting homeowners insurance quotes doesn't have to result in unwanted spam calls. Some quote websites sell your information to multiple companies, which can lead to frequent sales calls. HoneyQuote doesn't sell your personal information to lead-generation companies. You'll work directly with a licensed insurance professional who can answer your questions and help you compare your options without the pressure.
Sources
Every rate, average, and comparison on this page comes from HoneyQuote's own book of business — real policies placed for real coastal homeowners, not industry estimates. We publish what we actually see. How we calculate those averages is laid out in our methodology, the underlying numbers live in our research presented through our statistics pages, and if you want to know who's behind them, start with our contributors.
Why You Can Trust Honeyquote
Getting a quote should never cost you your phone number. We're a licensed independent agency, paid by the carrier only when you buy a policy, never for selling your information, because we don't sell it. Our editorial team follows rigorous editorial standards and works independently from the carriers we place with. Learn more about your privacy with Honeyquote.
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