Buying a home might be the largest purchase you make in your life. If you own a home, then you want to protect your investment, especially because replacing a home in the event of fire or disaster is outside the scope of most people’s emergency funds. That’s why home insurance is an investment all homeowners should make.
The right homeowners insurance is the one that provides the most coverage at the lowest price. This differs for each person and each home, so it’s impossible to name a single top company. With no-cost online homeowners insurance quotes, you can compare rates and coverage from different companies to find the right policy for your needs. There’s really no one-size-fits all policy when it comes to home insurance. In fact, two out of three homes are underinsured by as much as 60%, according to Nationwide. Identifying your home’s needs and shopping around can help you avoid making this costly mistake.
By comparing the top home insurance providers, learning what factors affect insurance rates and identifying risk factors that increase your premiums, you can negotiate better rates and coverage for your home insurance.
Compare Top Home Insurance Providers
Compare the top home insurance providers to find cheap home insurance that includes maximum coverage for your needs. When evaluating the top providers, consider price, coverage and claims. Many companies excel in one of these areas, but reputable companies perform well across the board. A homeowners insurance calculator can help you compare price and coverage, but you should rely on reviews from customers and unbiased organizations to determine how each company performs in claims and customer service.
Amica Mutual
Amica Mutual is one of the top home insurers in the country and scored top ratings for customer satisfaction from J.D. Power & Associates in 2015. Amica insurance reviews are mostly positive, with customers rating the company highly in pricing, policy offerings and ability to contact the company for support. The company offers an extensive range of home insurance options for all types of households.
If you combine home insurance with auto insurance from Amica Mutual, then you are eligible for a multi-policy discount. Other discounts are available if you have an alarm system, have a claim-free policy or opt for a high-deductible policy.
Chubb Group
Chubb Group is one of the highest-rated home insurance companies in terms of claims — earning a 4 out of 5 rating from J.D. Power & Associates in this category. With Extended Replacement Cost, Chubb Group pays for your home to be repaired or rebuilt even if the total cost exceeds your policy limit. Likewise, the company pays for necessary upgrades to meet modern building codes. If you opt not to rebuild your home, you can receive a cash settlement up to your policy limit.
Chubb Group offers several extras that many other home insurance companies charge additional fees for. If you require temporary housing while your home is rebuilt, the company increases your living expenses to maintain your standard of living until you can move back into your house. Coverage also includes repair or replacement for computers affected by viruses.
State Farm
State Farm homeowners insurance receives high ratings in its coverage of personal property. When it comes to choosing home insurance, you should opt for a policy that covers more than just your house itself. The items in your home have value and can be costly to replace. Unlike other home insurance companies, State Farm doesn’t set limits on replacing electronics and has higher-than-normal limits for replacement of jewelry, firearms and other personal items.
State Farm offers the usual discounts that many other insurance companies provide along with other non-standard discounts. For example, you can receive discounts for installing certain roofing materials or fire sprinklers in your house.
USAA
USAA frequently receives top ratings across the board, but the company only caters to military personnel and their families. It offers more coverage at lower rates than many other home insurance companies. One of the drawbacks to the company is that it doesn’t have local offices, so it’s not a top pick if you prefer doing business face to face. Agents are accustomed to working with the unique living situations of military families, such as traveling all around the world or moving from place to place frequently.
USAA home insurance covers replacement or repairs for damage up to current building codes, even if the costs exceed your policy limits. When it comes to personal property, USAA doesn’t determine coverage based on a certain percentage of your total property coverage. Instead, it offers full replacement value with high limits, including up to $10,000 for firearms — higher than any other home insurance company.
Erie Insurance
Though Erie Insurance is only available in 12 states and Washington, D.C., the company ranks highly in Consumer Reports’ ratings. Erie Insurance offers three main insurance products: ErieSecure Home, HomeProtector and homeowners insurance. The small company offers competitive pricing and several discounts and allows you to customize coverage to meet the needs of your household. Insurance policies include coverage for people living in the home, guests and pets.
Progressive
Progressive homeowners insurance offers competitive rates and coverage for homes of all sizes, when compared to average homeowners insurance. Agents are qualified to help you find specialized coverage for your unique home. You can choose which items you want covered on your policy, including possessions that you don’t store in your home. Policies include coverage for hotel rooms if you can’t stay in your home while it’s being repaired. If you’re sued, Progressive pays for your legal fees, too. The online quote system makes it easy to get a rate estimate so you can compare coverage between different insurance companies.
Liberty Mutual
Liberty Mutual home insurance is a top pick for people who keep their lives organized via their smartphones. The mobile app for Android or iOS makes it easy to take photos of belongings, categorize them and notate prices. Having information stored in the app simplifies your claims process. Liberty Mutual automatically adjusts coverage for inflation upon renewal. This ensures that you have adequate coverage for your home year after year.
The company has 11 discounts that you can apply to help reduce your premiums. If you have a lot of electronics in your home, then Liberty Mutual is a top choice to consider. With no limit on replacing electronics, you can get maximum coverage for your valuables.
Geico
Geico is a top insurance company when it comes to customer service. With customer support available 24 hours a day, 7 days a week, you can get your questions answered and manage your policy around the clock. The company offers competitive rates with discounts for safety features, such as fire extinguishers, smoke alarms and home security systems. You can also get a discount if you already insure your car with Geico. The smartphone app is a convenient way to manage your policies, pay your bill and make a claim.
AllState
AllState home insurance has some of the most competitive ratings among all other insurance companies. This is because you can tailor the coverage to suit your exact needs to increase coverage in some areas and opt out of coverage in others. AllState allows you to view common claims in your area to help determine the risks your home might be susceptible to and tailor your coverage accordingly. Optional coverage AllState offers includes flood insurance and identity theft insurance.
What Does Home Insurance Cover?
Home insurance coverage varies from company to company and policy to policy. Most policies cover damage caused by weather, theft, vandalism and fire. You can opt for additional coverage depending on your needs and lifestyle, but these often come at an extra cost.
Most standard homeowners insurance policies cover:
- Dwelling coverage – pays to repair or rebuild your house
- Other structure coverage – pays to repair other buildings on your property, such as garages or sheds
- Personal property coverage – pays to replace or repair personal property due to damage or theft
- Loss of use coverage – pays for temporary housing and living expenses if you’re displaced from your home
- Liability insurance – protects your assets and pays for legal fees if you’re named in a lawsuit
The above mentioned are standard for single-family home insurance policies. If you own a condo, then your insurance needs differ. Many condo associations have an insurance policy that covers the building. Rather than a standard home insurance policy, you need condo insurance, which covers your personal property and any parts of the building that are not covered under the association’s policy.
How Much Is Homeowners Insurance?
The cost of homeowners insurance consistently goes up, unfortunately. In 2011, premiums jumped by 7.6% and then jumped another 5.7% in 2012, according to the National Association of Insurance Commissioners. As of 2013, when the most recent data was evaluated, the national average for homeowners insurance was $1,096 per year. Cost is determined based on a number of factors, but many companies offer discounts for bundling auto and home insurance purchased from the same company.
Factors That Influence Home Insurance
Several factors influence the cost of your home insurance, aside from your location and the value of your home. Several of these factors are those you can’t change, but there are some that you can. Understanding how insurance companies calculate rates can help homeowners get the lowest rates.
Some of the factors influencing home insurance rates are:
- Location
- Age of home
- Type of home
- Claims history
- Deductible
- Home security and safety features
- Aggressive dogs
- Swimming pools and trampolines
- Coverage amount
- Credit score
What Does Home Insurance Not Cover?
Insurance doesn’t cover everything that can go wrong with your house. It’s important to review your policy and purchase additional coverage as needed or plan to pay for repairs out of pocket from an emergency fund in the event that your policy doesn’t cover the damage. You might not be aware about what you lack in coverage until you attempt to make a claim.
When purchasing home insurance, keep in mind that most standard policies don’t cover the following:
- Flooding
- Earthquakes and landslides
- Hurricanes and wind damage
- Negligence in home maintenance
- Certain breeds of dogs
Choosing the Top Homeowners Insurance
Finding affordable home insurance isn’t impossible, even though there’s no single company that’s right for everyone. In order to choose the homeowners insurance that meets your needs, you need to shop around and find the right price for the level of coverage you require. Price is perhaps the top factor that you consider when shopping for home insurance, but it’s not the only factor to take into account. Use online quote tools to compare prices and see what rates look like from different insurers. Then, look at the type of coverage that each policy provides. Tailor the coverage to meet your needs and adjust the deductible to get a more accurate view of the cost.
Homeowners Insurance Discounts
Nearly all homeowners insurance companies offer discounts to lower your rates and entice you to purchase insurance from them. These discounts can differ from company to company, but many offer standard discounts that are the same across the board. The Insurance Information Institute identified several discounts that you should take advantage of to lower your rates. These discounts include:
- Higher deductible – raising your deductible lowers your insurance premiums
- Multi-policy discounts – bundle home and auto policies under the same insurer
- Make your home disaster resistant – add storm shutters, upgrade your roof or modernize plumbing and electrical systems to prevent disasters
- Upgrade home security – install deadbolt locks, smoke alarms, burglar alarms and other qualifying systems
- Maintain good credit – keep your credit score up for a lower premium rate
- Stay loyal to your company – renew your policy with the same company rather than switching around
- Claim-free discount – consider if minor issues are worth filing a claim — you can get a discount for not filing a claim for a certain period of time
- Exclusive group discount – if you’re a member of a certain organization, such as an alumni group or professional organization, or age group you may get a lower rate
Homeowners Insurance Rates by State
Location is one of the biggest factors that affects your homeowners insurance rates. Home insurance rates in Florida and home insurance rates in Texas are nearly twice the national average of $1,096 per year. In contrast, home insurance rates in Idaho and Oregon are almost half the national average. The table below displays the average rates in each state, provided by the Insurance Information Institute, so you can see how your rates stack up against those around the rest of the country.
| Type of Insurance | Description |
|---|---|
| Health Maintenance Organization (HMO) | Delivers all services through a network of doctors; a primary care physician manages a patient's healthcare and refers the patient to a specialist as necessary |
| Preferred Provider Organization (PPO) | Patients have the freedom to choose which doctors treat them; referrals from primary care physicians are not necessary to see specialists |
| Point-of-Service Plan (POS) | Patients have the freedom to choose which doctors treat them; a primary care physician manages a patient's healthcare and refers the patient to a specialist as necessary |
| High-Deductible Health Plan (HDHP) | Money used to help pay for healthcare costs; money put into an HSA is not taxed and can be used tax-free for eligible medical expenses |
| Health Savings Account (HSA) | Available to patients who are enrolled in an HDHP, an HSA serves as a medical savings account for qualified medical expenses with a balance that rolls over each year |
Risk Factors
If your current home insurance rates seem higher than others in your area, this could be because of a number of risk factors that can quickly raise your premiums. Many of these risk factors are within your control, and if you eliminate them it can lower your rates. Some risk factors include:
- Dog breeds that are considered aggressive
- Swimming pools
- Trampolines
- Climate/weather
- Neighborhood crime rate
Insurance providers also look at your personal claim history and credit score to determine if you’re a liability. If you have a history of filing several claims, then you’re sure to pay a higher premium. Likewise, if you have a bad credit rating, then you might be considered a risk for not paying your premiums. As such, the insurance company might charge a higher rate.
Secondary and Vacation Home Insurance
Even though you spend less time at a secondary or vacation home, you still need to protect your property. Most insurance companies deem secondary homes riskier, meaning that insurance companies charge higher rates for these properties. Risks associated with your vacation home that don’t necessarily apply to your primary home include long periods of time with no occupants and rural isolation. Additionally, coverage is more limited and restricted than your typical homeowners insurance policy. There are a few ways to lower your vacation home premium, such as eliminating some of the risk factors mentioned above or opting for a personal umbrella policy, which increases coverage for all of your properties.
Don’t Own a Home?
If you don’t own a home, then there’s no reason to purchase homeowner’s insurance. Your landlord has a policy that protects the structure you live in. None of your personal belongings are covered under this home insurance policy, though. If the home is damaged by fire, weather or other disasters, you aren’t reimbursed for damages unless you have renters insurance. This type of insurance doesn’t cover damage to the structure or dwelling, but instead protects the items inside the home against damage or theft. Just like with home insurance, you can tailor renters insurance to reflect your situation. Premiums are often lower than those of home insurance.
