How to Choose the Right Homeowner’s Insurance Policy

It doesn’t matter if you have just purchased your first home or are nestling into your retirement home: there is something incredibly exciting about having a place to call your own.

The thrill of homeownership is memorable, and so is the responsibility of owning your personal piece of the American dream. One of those responsibilities is homeowner’s insurance.

The process of choosing a policy can be intimidating – but don’t think of it as shopping for insurance. Instead, think of it as shopping for peace of mind. Knowing that you are covered in the event that a storm blows through, fire breaks out, or neighbor falls on your driveway is enough to help you sleep peacefully at night. In order to direct your insurance policy search, it helps to know what to look for.


  • Assess the value of your home. You don’t need to be looking at insurance unless you already know how much it would cost you to replace your home in the event it is destroyed.
  • One size does not fit all. You don’t need a policy that covers a trampoline in your backyard if you don’t own one. Shop for insurance that meets your specific needs.​
  • Consider an umbrella policy. Bankrate points out that liability insurance tops out at $300,000 on most homeowner’s policies. However, should someone be injured on your property or due to the actions of a family member, they are likely to sue for much more than that. Umbrella policies are a relatively inexpensive way to protect your assets.​​
  • Don’t forget to think about flood or earthquake insurance. If you happen to live in an area that is prone to either of these natural disasters, you will likely find that your policy does not cover them. However, there are independent carriers that offer both. You can also check out the flood insurance offered through the National Flood Insurance Program. In California, you can buy earthquake insurance through the California Earthquake Authority. Even if you live in an area not known for those particular disasters, check the price of the policies. Many people forget that three of the largest earthquakes to hit the lower 48 all occurred in Missouri, of all places, and that fault lines run throughout the US.
  • Look at more than price. Sure, price is an important factor, but as CNN Money reminds us, it is equally important to research an insurer’s financial stability. A policy is only as good as the company that backs it. ​Make sure your company is A rated.​
  • Check more than one company. If you have ever purchased an item in one store only to find it priced less expensively in another, you understand that there is no such thing as a “fixed” price on a particular product or service. Like everything else on the market, prices vary for same product – so check several companies and compare prices. ​​
  • Negotiate the price. It is easy to waste money by forgetting to ask for any discounts that are available. Having things like smoke detectors, carbon monoxide detectors, security systems or a new home, can lower your costs.​
  • Keep your policy updated. Choose one day each year to review your policy and to make sure it still includes everything you need.
  • Make sure your coverage is full replacement value. You don’t want the worn out value of your roof….you want enough money to replace it.

Finally, look for an agent you are comfortable with. Ask friends and family for their recommendations and schedule a meeting in order to learn how interested that agent seems in meeting your particular insurance needs.