Two quotes can cost the same and cover very different things. Here is how to line up coverage amounts, deductibles and exclusions so you can see what a policy really offers before you buy.
Two quotes for the same house can carry the same price and protect very different things. Each insurer uses its own formula to measure risk, so the cost of covering one home varies from company to company, often by hundreds of dollars a year. Here is the job in order: decide what coverage you need, gather the right details, compare the quotes line by line, and check the companies behind the prices.
Why Two Quotes With the Same Price Can Be Very Different
A policy is a contract, and two contracts that cost the same can promise different amounts. Standard policies generally contain the same types of coverage, but the limits are not always the same. A cheaper quote may simply offer less protection: a lower dwelling limit, a higher deductible, or smaller payouts for your belongings.
Price also says nothing about what happens after a loss. Service quality and the insurer’s financial strength matter most when you file a claim, which is why the comparison has to go beyond the number at the top of the page.
Step 1: Decide What Coverage You Actually Need
A standard homeowners policy has six main parts: dwelling, other structures, personal property, loss of use, personal liability and medical payments. Get a rough idea of the amounts you need for each before collecting quotes, so every insurer prices the same thing.
Start with dwelling coverage, which pays to rebuild the structure after a covered loss. That figure is based on the cost to rebuild, not the home’s market value. The land under your house is not at risk from theft, windstorm or fire, so leave its value out; including it means paying a higher premium than you should. For a ballpark figure, multiply your square footage by average building costs in your area, and consider running the number past a local builder.
Next, take a home inventory: a list of your belongings and their values, with receipts if you have them. Personal property coverage generally runs 50 to 70 percent of the amount on the structure, so the inventory tells you whether that share fits what you own. If you ever file a claim, the same list makes the paperwork easier.
Finally, note what a standard policy will not cover: flood, earthquake and routine wear and tear. Flood insurance is a separate policy, and buyers in flood-prone areas should price it before committing, since it becomes a long-term cost of owning the home. If you have remodeled a kitchen or built an addition, include those changes in the amounts you request.
Step 2: Collect the Details Insurers Will Ask For
Every company will ask similar questions about the property, so write the answers down once and reuse them. Expect questions about the home’s age, size and construction, the roof, and the condition of the heating, plumbing and electrical systems. Updated systems reduce the risk of fire and water damage, which can work in your favor on price.
With the details in hand, request a quote for the same coverage types and the same policy amounts from each company. Get at least three quotes; that gives you a real sample of what is available for your home. Online comparison tools can speed this up by letting you enter your information once, and a licensed agent can do the same shopping on your behalf.
Worth knowing
Ask each insurer to quote the same dwelling coverage amount and the same deductible. Without that, you are comparing different products, not different prices.
Step 3: Compare Dwelling Coverage, Deductibles and Exclusions Line by Line
Put the quotes side by side and walk through each line.
| Line on the quote | What to check |
|---|---|
| Dwelling | Enough to rebuild, not the purchase price or the land value |
| Other structures | Whether a detached garage, shed or fence is included, and at what limit |
| Personal property | The limit, usually 50 to 70 percent of dwelling coverage, plus dollar limits on jewelry, furs, art and collectibles |
| Loss of use | What it pays for hotel bills and restaurant meals while your home is being rebuilt |
| Liability and medical payments | The limits, and that medical payments cover guests, not your own household |
| Deductible | The standard amount, plus any separate wind, hail or earthquake deductible |
| Exclusions | Flood, earthquake, wear and tear, and anything else the policy will not pay for |
Deductibles deserve a close look. A deductible is what you pay toward a loss before the insurer pays anything. Most companies recommend at least $500, and raising a deductible to $1,000 can save as much as 25 percent on the premium. If you live in a disaster-prone area, watch for separate deductibles: coastal homes in the East may carry a windstorm deductible, hail-prone states a hail deductible, and earthquake policies their own.
Read the fine print on belongings too. Coverage for items stored off-premises follows you anywhere in the world, but some companies limit that protection to 10 percent of your personal property amount. Expensive items such as jewelry, art and silverware are covered with dollar limits when they are stolen, so ask what it would cost to insure them fully.
Step 4: Ask About Discounts and How Claims Are Handled
Discounts can move the price without cutting coverage. Buying your home and auto policies from the same insurer may reduce the premium, but confirm that the combined price is lower than buying the coverages separately from different companies. Ask about paying in full or using autopay, and ask each insurer what they would do to lower your costs.
If you already hold a policy, start with your current insurer. Many companies value long-time customers, and a conversation can surface discounts or coverage options tied to changes in your household or property. An annual checkup is a good habit for the same reason.
One caution on switching. Some policyholders move for a lower premium only to find the coverage or service falls short of what they need, and others save in the first year only to face higher prices as early as the next. Value includes service and financial strength, not just the number on the quote.
Step 5: Check the Insurer With Your State Insurance Department
Before you sign, look into the company itself. Many state insurance departments publish typical rates charged by major insurers and the frequency of consumer complaints by company, so you can see how an insurer treats policyholders when claims arise. The National Association of Insurance Commissioners also offers information to help you choose an insurer in your state, including complaint data. Check financial stability through independent rating companies such as A.M. Best and Standard & Poor’s.
Where the Comparison Usually Goes Wrong
The most common mistake is shopping on price alone and accepting the lowest quote without checking limits, deductibles or exclusions. The second is comparing a $1,000 deductible against a $500 one and calling the difference savings. The third is forgetting the escrow connection: if your premium is paid through your mortgage payment, a new premium changes that payment after the servicer’s annual review. Our guide to mortgage escrow accounts explains how the adjustment works.
Related guides
- Why did my mortgage payment go up when my rate is fixed?: how premium and tax changes reach a fixed-rate payment.
- What’s inside a monthly mortgage payment: where the insurance piece fits with principal, interest and taxes.
- When to appeal your property tax assessment: another recurring cost of owning, and how to challenge it.
The short version
- Insurers price the same home differently, often by hundreds of dollars a year, so get quotes from at least three companies.
- Dwelling coverage should reflect the cost to rebuild, not the market value, and the land under the house should not be included.
- Raising a deductible to $1,000 can save as much as 25 percent, but disaster-prone areas may carry separate wind, hail or earthquake deductibles.
- Standard policies exclude flood, earthquake and routine wear and tear; flood insurance is always a separate purchase.
- Your state insurance department and the NAIC publish complaint data, and rating agencies such as A.M. Best report on financial strength.
Readers also ask
How many homeowners insurance quotes should I get?
Three is the common minimum. Insurers use different formulas to measure risk, so a sample of three gives you a real sense of the price range for homes like yours.
How much personal property coverage do I need?
Personal property coverage generally runs 50 to 70 percent of the amount on the structure. A written home inventory, with receipts where you have them, tells you whether that share fits what you own.
Does homeowners insurance cover floods?
No. A standard policy does not pay for flood, earthquake or routine wear and tear damage. Flood coverage is a separate policy, so price it before committing to a home in a flood-prone area.
Can bundling home and auto lower my premium?
It can, but check the math. Make sure the combined price from one insurer is lower than buying the two coverages separately from different companies.
This guide is general information about U.S. mortgages, not financial, tax or legal advice. Loan terms depend on the lender and on your credit, income and property, so confirm the details with your lender, and see consumerfinance.gov for official guidance.
