🏠 Top Tips for Choosing Homeowners Insurance: A Guide for U.S. Homeowners

🧱 Introduction: Home Insurance Isn’t Optional

Buying a home is one of the biggest investments you’ll ever make—but what happens after you move in is just as critical; it’s important to understand how to choose homeowners insurance. While homeowners insurance might seem like just another checkbox on your to-do list, it’s a powerful financial tool that protects your home, your belongings, and your peace of mind.

Yet as of 2024, over 11 million U.S. homeowners are uninsured, according to LendingTree. That’s 13.6% of owner-occupied homes—up from just 5% a few years ago. Whether due to rising premiums, policy confusion, or lack of access, many Americans are leaving themselves dangerously exposed.

Let’s change that.

This guide breaks down the must-know tips for choosing a homeowners insurance policy that truly protects you—especially in an age of climate risks, skyrocketing rebuild costs, and insurance volatility.  This guide helps you choose the right homeowners insurance

💡 1. Understand What Homeowners Insurance Actually Covers

Before diving into quotes, understand what standard homeowners insurance usually includes—and what it doesn’t.

🛡️ Most standard policies (HO-3) cover:

• Your home’s structure

• Detached structures (like garages)

• Personal belongings

• Liability protection

• Temporary living expenses (loss of use)

But here’s the kicker: these protections come with conditions—and many common disasters, like floods and earthquakes, are excluded unless you add extra coverage.

📚 Related Reading: 5 Things NOT Covered by Homeowners Insurance

🏗️ 2. Base Your Coverage on Rebuild Value—Not Market Price

Don’t make the mistake of insuring your home for what you paid for it. Instead, insure it for the replacement cost—what it would actually cost to rebuild your home with current labor and materials.

In 2023–2024 alone, the average cost to rebuild a home jumped 19%, driven by inflation and supply chain issues.

Ask your insurance agent to run a replacement cost estimate, and revisit it yearly.

🧾 3. Review the Claims History of Your Home

If you’re buying an existing property, request a CLUE report (Comprehensive Loss Underwriting Exchange). It reveals the past 5–7 years of insurance claims tied to the address.

Why it matters:

• A history of flooding may require additional flood coverage.

• Multiple water damage claims may hike your premiums.

• Prior fire claims could flag electrical or structural risks.

The more informed you are, the better you can tailor your policy.

💰 4. Look for Every Available Discount

Insurance costs are up nationwide, but that doesn’t mean you have to overpay. Many insurers offer discounts based on:

• Home age and construction materials

• Fire and burglar alarms

• Gated community or HOA protection

• New roof installation

• Bundling auto + home policies

• Being claim-free for multiple years

💡 Tip: Always ask your agent about “hidden discounts” you may not see online.

🔍 5. Always Get Multiple Quotes—But Not Just Online

Online quote tools are fast, but they don’t always give you the whole story. Some insurers don’t offer quotes online—or may leave out key variables like mold exclusions or code upgrade coverage.

Try this three-pronged approach:

• Use an online comparison tool for baseline pricing.

• Call at least two major carriers directly (like State Farm, Allstate).

• Speak with an independent agent who works with multiple insurers.

This will give you the full landscape of costs, coverages, and potential risks.

📄 6. Read the Fine Print—Seriously

Don’t skim. Read the declarations page, exclusions section, and endorsements in full. Look for things like:

• Mold limitations (many cap payouts at $5K)

• Water backup exclusions (sump pump failures often need add-ons)

• Named vs. open perils (named-peril policies cover fewer scenarios)

If it’s confusing, ask. The best insurance agents will help you walk through the documents line by line.  It’s all part of knowing how to choose homeowners insurance.

🛠️ 7. Add Riders or Endorsements for Gaps

No policy is perfect out of the box. You may need to customize coverage through add-ons like:

• Flood insurance (through FEMA or private insurers)

• Earthquake coverage

• Sewer or sump pump backup

• Valuable personal property (for jewelry, art, etc.)

• Inflation guard protection (automatically raises coverage)

Ask your agent what’s standard vs. extra—and consider which risks make sense based on your home’s age, location, and construction.

🧠 8. Know Your Deductible Strategy

Higher deductibles = lower premiums—but can you afford to pay $5,000 out of pocket after a disaster?

Most homeowners choose deductibles between $500 and $2,500, but your choice should reflect your financial cushion and risk tolerance.

For example:

• Choosing a $2,500 deductible instead of $500 can lower your premium by up to 20%.

• But if you’d struggle to cover that during a crisis, it could delay repairs.

📊 Visual Aid: Typical Homeowners Insurance Breakdown (2025 Avg)

👨‍👩‍👧‍👦 9. Don’t Overlook Demographic or Regional Factors

Where you live—and who you are—can affect your access to and cost of homeowners insurance.

• Black and Hispanic homeowners are more likely to be uninsured or underinsured.

• Lower-income households may forgo coverage entirely due to cost.

• States like Florida, California, and Louisiana face shrinking insurance markets due to wildfire, flood, and hurricane risks.

🔥 In California, major carriers like State Farm and Allstate stopped writing new policies in 2023 due to wildfire risks.

☎️ 10. Talk to an Insurance Agent You Can Trust

Not all agents are created equal. Look for:

• Independent brokers (not tied to one insurer)

• Agents who are transparent about exclusions

• Pros who ask about your long-term needs—not just the sale

And don’t be afraid to switch carriers every few years. Many insurers offer better deals to new customers than to loyal ones.  This is part of learning how to choose homeowners insurance.

✅ Summary Checklist: Smart Homeowners Insurance Shopping in 2025

✔ Insure for rebuild value, not purchase price
✔ Review past claims or request a CLUE report
✔ Add coverage for common exclusions (floods, backups, etc.)
✔ Look for discounts based on home safety features
✔ Get at least 3 quotes from different types of sources
✔ Read the full policy, especially exclusions and endorsements
✔ Customize your coverage based on risk factors
✔ Choose a deductible you can realistically afford
✔ Understand your demographic and regional market conditions
✔ Work with a knowledgeable, responsive insurance pro

IICRC-certified ServiceMaster Restoration By Simons is a MBE/WBE certified minority and women-owned and family run company. The business provides disaster restoration services for damages caused by tornadoes, water, fire, flooding, mold remediation, and a wide range of interior specialty cleaning (hoarder/clutter, post construction, carpet & upholstery). For more information, give us a call at 773-376-1110 or visit servicemaster-restorationbysimons.com