Key takeaways
- You could benefit from shopping for home insurance even if you’re not buying a new house.
- Shopping around can help you find better rates, avoid negative customer service experiences and ensure your coverage is adequate.
- Because your coverage needs can change, insurance experts recommend conducting an annual or semi-annual policy review.
Shopping for homeowners insurance is often treated as a one-time task — especially when it’s folded into the homebuying process. Once you’ve got a policy, you might not think to shop again until it’s time to move. But only shopping when you’re about to purchase a new home could mean missing out on opportunities to save money, improve your coverage and build a strong relationship with an insurer you trust. To help you understand when to shop for home insurance, Bankrate’s insurance editorial team put together a guide informed by experts in the industry.
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 house and have a policy in place? 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, says 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.
Even if you feel you chose the best home insurance company when you purchased your property, your needs may have changed since then. Maybe you’ve made additions or upgrades to your home; maybe you’ve had a negative claim or customer service experience with your current carrier. Or maybe, like many Americans, you’re just looking for a lower premium to give you a little break from crushing financial anxiety. Whatever your situation, switching home insurance companies could be the move.
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
Should you shop for home insurance even if you aren’t buying a house?
If you own a home, it certainly can’t hurt to shop for home insurance. Karen Collins, vice president of Property and Environmental for the American Property and Casualty Insurance Association, confirms this: “[T]here are only benefits associated with shopping for homeowners insurance.”
In fact, many homeowners are shopping for insurance outside of the homebuying process. J.D. Power’s 2024 U.S. Home Insurance Study found a record high for home insurance shopping, with 6.8 percent of all home insurance customers shopping for new policies. With the cost of home insurance 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.”
Remember: Requesting home insurance quotes doesn’t lock you into an agreement to purchase a new policy. It won’t hurt your credit, and it won’t cost you anything but time — which you may be able to save by working with an independent agent or broker. Simply put, there’s no practical downside to shopping for home insurance.
There are, however, plenty of potential benefits. Let’s explore the various perks of sussing out the competition.
Shopping for home insurance should be a step on your moving checklist when you purchase a new home. However, there are also benefits to seeking quotes from other providers, even if you aren’t moving and even if you have an existing policy. Here’s how you could benefit from shopping around:
- You may find a cheaper rate for the same coverage
- You may find better coverage options
- You may find that your insurance needs have changed
You may find a cheaper rate
Although recent data suggest that inflation is cooling, prices remain 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 $2,304 for $300,000 in dwelling coverage. Even if your policy was the cheapest option available when you purchased your home, that may not be the case today.
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. For example, you may find that you can add endorsements or increase your liability coverage without pushing yourself over your financial limits. And if you can find a cheaper home insurance premium, it can lower your home expenses overall.
Your home insurance needs may be changing
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 homeownership journeys.
When you purchased your home, maybe you needed the cheapest coverage to help offset the various startup costs involved in being a first-time homebuyer. Several years in, 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. 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.
Don’t keep excess coverage — but insurance is not something to skimp on
Carefully consider whether it’s wise to cut coverage in 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
Keep in mind that your insurance needs don’t start and end with finances. You may also want to shop for a new policy based on negative experiences with your current insurer. If you’ve had a frustrating claim or customer service experience, it may be worth exploring offers from other insurers with positive reviews from customers to find a better fit.
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 and work with an insurer you trust to have your back.
Frequently asked questions
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Shopping for home insurance before submitting an offer is possible and may be a savvy financial decision. 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. The home’s location and risk profile (which assesses things like potential impact of natural disasters and local crime stats) will also factor into insurance costs.
To get a quote, you will need information such as the square footage, building materials and age of the roof — information that you or your real estate agent should already have. Shopping for home insurance as part of the homebuying process may help you stay within budget and understand your home’s potential loss exposure.
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The average cost of home insurance ranges from $800 to $6,000 per year for $300,000 of dwelling coverage, based on Bankrate’s analysis of home insurance rate data. The national annual average is $2,304. Home insurance premiums depend on factors such as your location, coverage selections, policy limits, home size and the insurance company you choose.
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Over time, it’s possible that your home insurance needs may change. For example, if you build an addition or install 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 endorsement to protect them.
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