Key takeaways
- Shopping around for home insurance may help you find the best and cheapest policy.
- It may be beneficial to shop for home insurance even if you aren't buying a house.
- Because coverage needs can change, insurance experts recommend you review your policy regularly.
Shopping for home insurance is frequently folded into the home buying process, but only shopping when you’re about to purchase a new home could mean missing opportunities to save. Bankrate’s insurance editorial team spoke with experts in the industry to understand when and how consumers can maximize their shopping habits — and why it might be beneficial to shop for insurance even if you aren’t planning a move.
Why is it important to shop for home insurance?
Shopping for home insurance is a key step in buying a home, but what about when you already own a home and have a policy in place? Shopping your existing home insurance policy can have major benefits.
Whether you’re looking for an improved customer experience, better coverage, a fairer price or a company that’s better aligned with your values, there are plenty of reasons people switch their homeowners insurance providers.— Sean Burgess, Chief Claims Officer at Lemonade
Shopping for and comparing home insurance quotes, even if you’re not buying a new house, can allow you to assess your current needs and decide if your policy and company can fulfill those needs. Even if you chose the best home insurance company for your needs when you initially purchased your home, your needs may have changed. Perhaps you need to find a lower rate, a specialty coverage option or a local agent.
But many homeowners purchase a policy when they first buy their house and neglect to review their coverage needs over time. Stephen Crewdson, J.D. Power senior director of Insurance Business Intelligence, told Bankrate that there is “anecdotal evidence that you’re more likely to shop when you’re buying a home than just any average day.” This means that existing home insurance policyholders could be missing out on an opportunity to find better coverage.
Should you shop for home insurance even if you aren’t buying a house?
It certainly can’t hurt. Karen Collins, vice president of Property and Environmental for the American Property and Casualty Insurance Association, confirms this, saying “there are only benefits associated with shopping for homeowners insurance.”
In fact, many homeowners are shopping for insurance outside of the home buying process. Data from TransUnion shows that home insurance shopping was up throughout 2023, despite rising mortgage rates that led to a record low in home sales. With home insurance rates on the rise, Bankrate theorizes that more consumers feel it’s worth shopping around for better rates or coverage even when not buying a house.
“Shopping for homeowners insurance isn’t just for when you’re moving homes,” Burgess says. “If you’re dissatisfied with your current homeowners insurance provider — or just curious if there’s a better deal out there — it’s worth shopping around to get a sense of your options.”
Requesting home insurance quotes doesn’t lock you into an agreement to purchase a new policy. Additionally, many shoppers think that getting insurance quotes affects their credit rating. But don’t worry: that’s a myth. Insurance companies in most states do use credit as a rating factor, but they use a “soft check” that does not impact or damage your credit in any way. Simply put, there’s no downside to shopping for home insurance.
There are, however, plenty of benefits to shopping. Let’s explore the various perks of sussing out the competition.
Advantages to shopping your home insurance
- You may find a cheaper rate
- Shopping may help you find better coverage
- Your home insurance needs may be changing
Shopping for home insurance should be a step on your moving checklist when you purchase a new home. However, there are also benefits to shopping under an existing policy, even if you aren’t moving. While you don’t have to change home insurance providers, shopping your policy helps you make sure that your current coverage still fits your needs.
You may find a cheaper rate
Although recent data suggests that inflation is cooling slightly, it remains elevated and most households are feeling the effects. Because different insurers have different rates, you may find a lower premium — and some breathing room in your budget — by shopping around.
“People say they’re shopping because of price,” Crewdson told Bankrate. “The percentage who say they’re shopping because of price has increased throughout the year.” Home insurance rates continue to increase in 2024, with an average annual premium of $2,151 for $300,000 in dwelling coverage. Just because your current policy was the cheapest option when you initially shopped doesn’t mean it’s the cheapest option now. Shopping around lets you compare rates to find the cheapest home insurance policy for your needs.
Just consider carefully whether you should cut coverage in an attempt to get a lower rate. Goosehead Insurance conducted a study of 2,000 American homeowners and found that 57 percent said they were willing to forgo coverage for a lower rate.
While it may seem like a solid strategy to save money, this can be a dangerous one. Reducing your coverage can mean that you are left with higher out-of-pocket costs in the aftermath of a claim, which could lead to a greater level of financial disruption than paying for the extra coverage in the first place. If you aren’t sure how much home insurance you need, you may want to work with a licensed agent while you’re shopping rather than getting a quote online.
When to shop for home insurance
Learning when to shop for home insurance can be surprising — it can happen at any time for any reason. Having a bad customer experience with a claims or service agent is a valid reason to look for a new provider. How you interact with your agent can matter too. Digital tools and 24/7 availability may fit your life better than an agent with limited office hours.
You may find better coverage
Price isn’t the only factor to consider when shopping for home insurance. Checking out the competition may also help you find better coverage.
Collins reminded Bankrate that “[w]ith inflation, supply chain issues and increased demand for skilled labor and construction materials following unprecedented natural disasters, there has been a significant increase in the cost to rebuild homes and businesses.” That means that even if you haven’t made any changes to your home, you might need higher limits. Your current insurer can give you a quote for any necessary adjustments to your policy, but shopping around could help you find better or more specialized coverage.
If you find a lower premium when you shop, it may also allow you to increase your coverage and still stay within your budget. You may find that, with a company that has lower rates, you can add additional endorsem*nts or increase your liability coverage, for example, without pushing yourself over your financial limits. If you can find a cheaper home insurance premium, it can lower your home expenses overall.
Your home insurance needs may be changing
If there’s one universal truth, it’s that change is inevitable. Whether the change is sudden or gradual, your life will shift, and when it does, your insurance needs might change. Home insurance shouldn’t be a static, “set-it-and-forget-it” product.
While that might work for some homeowners, most people experience changing needs throughout their tenure as homeowners. For example, when you purchased your home, maybe you needed the cheapest coverage to help offset the various startup costs involved in being a first-time home buyer. Several years into your homeownership journey, you might be more financially secure. Maybe you make some changes to your house, purchase some higher-end belongings, host guests more frequently or welcome new family members.
All of those factors could create a need for more or different home insurance coverage. As your needs change, so should your home insurance. Remember that home insurance is fundamentally a financial product. It’s designed to protect your finances from the fallout of unexpected home-related losses, so it’s important to assess your risk level as your life changes.
Additionally, shopping can serve as a good touchpoint to review your coverage limits in general. During the height of the pandemic, home renovations increased in popularity. If you’ve made significant changes to your home — such as upgrading finishes, adding a screened porch or upgrading your roof — you should let your insurer know so you can re-evaluate your needs.
Frequently asked questions
Shopping for home insurance before submitting an offer is possible and may be a savvy financial decision. One factor in determining your home insurance premium is location and potential risk from natural hazards. To avoid purchasing a home with unmanageable insurance costs, you may want to work with your realtor to get a loss history report from the current homeowner and enough details about the home for an accurate quote.
To get a quote, you will need information such as the square footage, building materials and age of the roof — information that your realtor should already have. Shopping for home insurance as part of your home buying process may help you stay within budget and understand your home’s potential loss exposure.
The average cost of home insurance ranges from $800 to $6,000 per year for $300,000 of dwelling coverage, based on our analysis of home insurance rate data. The national annual average is $2,151. Home insurance premiums depend on factors such as your location, coverage types, coverage limits, the size of your house, and your insurance company.
Over time, it’s possible that your home insurance needs may change. For example, if you build an addition on your home or add a pool, you might need to increase your coverage limits. Or, if you acquire expensive items, like art or jewelry, you may decide to purchase a valuable items endorsem*nt to protect them.
