Best Cheap Home Insurance
Based on In-Depth Reviews

“Excuse me helpful Consumer Advocate, isn’t there already a Best Homeowners Insurance page on your website?”  You bet there is. And we encourage you to browse it at your leisure to understand why home insurance is necessary and, sometimes, mandatory. 

“So, what’s all this then?” Well, we just love to write about homeowners insurance. And we thought that first-time homebuyers looking for cheap home insurance could use a handy guide that speaks directly to their doubts and worries regarding costs. 

Let’s get this out of the way first: cheap should not mean second-rate. In fact, at first glance, it might not even seem all that affordable. That’s because skimping on coverage is not the way to go about saving money on home insurance. We’re talking about being a shrewd buyer and knowing how to strike a balance between coverage and costs.

“I’ll take your word for it. So, what’s the right way to save money on homeowners insurance?” The best way is to take advantage of everything in your power that helps reduce premiums, while understanding that there are some things beyond your control. 

We spoke with Etienne Font, attorney for the Merlin Law Group which specializes in insurance claim litigation, to provide some insight into what factors consumers should focus on when shopping for cheap home insurance.

How to Save on Home Insurance

First Step: Read the Full Policy

“Not every policy is the same,” Font says. “You’re asking [home owners] to be savvy consumers, to find out as much as they can before making a decision. Which means they have to be proactive in how they search for this coverage. They shouldn’t just try to weigh insurance policies merely by cost.”

Policies across several companies may have similar deductibles, but what do they cover? Font suggests obtaining a copy of the full policy because with summaries, “insurance companies generally will not display everything a policy may have.... they’re trying to sell a product so they’re gonna try and highlight how they’re different from someone else” though not necessarily the policy’s shortcomings. 

To this end, knowing which factors affect your home insurance premium costs can help you figure out what you can and can’t control.

What you can’t control

• Age

• Gender

• Location

• Marital Status

• The home’s age and construction materials

• The overall coverage you actually need

Besides the obvious uncontrollable factors (age, gender, marital status, location, the home’s age), there is one thing that you might think you can control: the actual coverage amount. Let us burst your bubble, you can’t. Your home, including structure and belongings, are worth a certain amount. You can try to twist and turn and bend the answer, but there’s no getting around this number.

To be fair, you could very well decide to not insure against, say, water back up, as you feel your home is not in danger of sewage overflow. But then it happens, you lose some personal belongings, and have zero to show for it. You thought you were saving money by passing on coverage, but you ended up paying more to replace items and repair damage. 

Vs

What you can control

• Credit Score - There are multiple ways you can repair your credit score, such as paying off debt, not applying for new credit lines, and fixing any reported errors on your report.

• Limiting liability such as dogs, trampolines, and pools

• Claim history - Take it easy with your claims. We’re not saying that you shouldn’t file for one, but really do the math to see if the reimbursement you’ll get, (i.e. $300 for a rug), is worth the future rise in your premiums.

• Install safety features

• Additional structures or costly features (expensive materials, decorations, etc.)

Please understand that we’re not suggesting you get rid of your furry friend or that you seal up your precious summer oasis. This is just to demonstrate the weight some factors have in determining your premiums and that, whenever possible, limiting liability can substantially reduce your costs. Not only that, many companies can deny coverage for certain home features such as trampolines or specific dog breeds that are considered dangerous, such as pitbulls. 

Something that is completely doable and within your hands is installing safety features in your home. Fire extinguishers, burglar alarms, deadbolts, and storm shutters are just some examples of safety features that can potentially net you discounts on home insurance. And with the advent of DIY home security systems, it’s easier than ever to furnish your home with an extra layer of protection. 

“You’ll never know everything about one company but if you do some of the work, at least you feel like you’ve done what you could.” Etienne Font, attorney, Merlin Law Group

Nonetheless, to paint a clearer picture, Font provides a situation of how to thread the needle between needs and savings. 

If you own many custom or expensive items, you should ask yourself whether the policy covers those belongings. You should purchase an endorsement—for example, if you own several pieces of valuable jewelry—otherwise you won’t have any coverage after a loss. 

If you don’t have much jewelry, and you get a policy that covers up to $10,000 in jewelry, then you’re probably overpaying for coverage. In that case, you might consider another policy that only covers $2,500 in jewelry, and could potentially offer a lower premium. 

However, “if you DO have [several Rolex watches], maybe for a $50 difference in premiums it makes sense to go with the [$10,000] policy, because you’re getting a lot more coverage. But you would only know that if you read the policy when you get it.”

To Font, it all boils down to knowing what it is you need to insure (and for how much), how much you would be paying, and what you would be getting. With that understanding—and some simple arithmetic—you can find the sweet spot of value versus savings.

Alternative Ways to Save

Talk to a Broker

For people who want to have all their questions answered and all the options laid out, working with a broker is the way to go. It’s a direct service and it can cater to your specific needs.

A broker can negotiate with companies on your behalf, and ensure that you’re getting coverage tailored to your needs. . That way you pay only for what you need, maybe saving in one area in order to maximize in another.

Sometimes you can settle with the insurer on an agreed value, that is, a predetermined amount you wish to insure because that’s all you’re really concerned about.  “There will be an insurer out there that will try to meet your needs,” Font assured.

Choose a Financially Solid Company

If you’re paying for coverage, and you’re buying from a company that’s gonna go bankrupt, are you really saving any money? That’s the importance of checking an insurer’s financial strength. A.M. Best, Moody’s, and S&P are some of the ratings websites that can provide the financial context of the insurer you choose.

Unfortunately, insurance bankruptcies are not uncommon. Font cautions against picking companies willy-nilly. “When it comes to homeowners policy, people just rely on the amount. Can I afford it? This one seems cheap, I’ll go with this one. But it could be cheap because they're not giving you any coverage or they’re limiting the coverage. Sure, they save money in the premium, but now they’re not getting anything when the claim occurs.”

This is less of a problem with recognizable national brands, although you should always double check just to make sure. 

Constantly Review your Policy

A common mistake for homeowners is not reviewing their insurance policy as time passes or if changes are made to the home. 

Font reminds us that “policies can be changed or cancelled at any time” so as to raise or lower coverage limits. He provides another example to illustrate the point. 

Say you wanted to add fencing to the back of your house. During the policy period you decide to add a thousand feet of lineal fencing—that would be covered under “other structure” in your policy. This addition could be worth from $16,000 to $20,000. But you may notice that you only have $8,000 for coverage under “other structures.” Therefore, now may be the time for you to approach the insurance company and say “Hey, I need to raise the limits of my ‘other structure’ coverage because I added this fence (or a shed or a guest house or a pool).”

At the same time, maybe something happens and you want to reduce the coverage—perhaps you’ve sold a portion of your property and the guesthouse is gone. In this case, you can ask for a reduction in your coverage limits, which will also save you money in premiums. 

“It’s important to keep track of your changes to make sure you’re not insuring stuff that’s not there anymore” Etienne Font, attorney, Merlin Law Group 

Additionally, each year—if the economy is agreeable—your house increases in value. And as the price for construction materials and supplies goes up, it takes more money to rebuild a structure. However, there are policies that don’t automatically increase the limits of the coverage. 

So, if your policy doesn’t have an automatic rider—meaning that the limits of the policy are increased by a stipulated percentage or amount, such as with cost-of-living adjustment—you might find yourself in deep trouble.

For example, a house that was initially insured 15 years ago at a replacement cost of $150,000 and whose coverage limits have not increased is, most probably, woefully underinsured at the present moment. Additionally, homeowners need to comply with a coinsurance amount, which means their policy needs to cover a certain percentage of the home’s value, maybe 80% or 100%. If, as time passes, the value of the home increases but the coverage limit doesn’t, they’re going to incur a penalty from the insurer because they’re not complying with the stipulated coinsurance percentage.

If you’ve done something to increase your home’s value, including any additions or improvements, you must notify the insurance company. The difference in premiums could be minimal and, if you don’t, you could be subject to heavy penalties that could run up to the tens of thousands of dollars.

If your property taxes or the appraisal value of your home have gone up, you should also consider increasing your coverage limits. 

You should seek out the automatic rider if it’s not included in your policy to make it easier to avoid penalties and keep your coverage limits up to par. This way, you guarantee that as values go up, your coverage limits will too. 

How to Use Aggregators 

Although brokers are a more direct and comprehensive way to shop for cheap home insurance, there are other alternatives. As we mentioned in our company reviews section, aggregators and online marketplaces can be efficient tools for comparing policies from multiple insurers. 

While easy and quick, pay attention to which website you give your info to; not all marketplaces are created equal. Most, such as our picks above, are legitimate websites that provide quotes from reputable insurers, even for different types of insurance. Some also partner up with specific providers as a way to attest their legitimacy.

However, other websites ask for personal information only to offer links to other aggregator websites in a continuous loop of ineffectiveness. Others might bombard you with spam or sell your info to undisclosed third parties. 

If you have any doubts whether a website is on the up-and-up, search for online reviews or visit websites such as the Better Business Bureau (BBB).