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The Best Homeowners Insurance Companies of 2021
Why trust us in finding home insurance?
To make our recommendations for the best homeowners insurance companies in 2021, we used our proprietary SimpleScore system to rate insurers on accessibility, coverage options, customer service, discounts, and support. The research was supported by inputs from experts from renowned third-party market research companies such as J.D. Power and Better Business Bureau and information from the national regulatory organization National Association of Insurance Commissioners (NAIC). Our recommendations and advice for homeowners insurance are developed after evaluating quotes, complaints and customer reviews from the past several years to establish the trustworthiness and reliability of the insurer.
The good news? Our top-rated homeowners insurance companies offer some of the best home insurance rates in the industry. Each provider has something different to offer, so make sure to compare quotes from multiple companies to find the best homeowners insurance value.
The best 6 home insurance companies of 2021
- Best Overall Value: Amica Mutual
- Best for Affordability: Erie Insurance
- Best for In-App Service: State Farm
- Best for Claim-Free Rewards: Allstate
- Best for Simple Policies: Farmers
- Best for Discounts: Liberty Mutual
State Farm goes above and beyond just reimbursing you for home insurance claims with its Premier Service Program. If your home needs any repairs, the program will connect you to one of its participating contractors for water mitigation, flooring, general contracting or roofing services. The resulting workmanship is guaranteed for five years.
If you live in a newer home, you can earn higher discounts for impact-resistant roofing and a home security system. State Farm lacks in coverage add-ons, however. Other companies offer interesting options like home office insurance, hurricane or eco-friendly material reimbursements, but State Farm sticks with pretty standard extended liability or umbrella insurance options. State Farm not only pays your bills but also plays matchmaker. With qualified claims, its Premier Service Program will set you up with a contractor for repairs during claims.
What is the average cost of home insurance?
|Cheapest States||Top 10 Cheapest Average Annual Premiums||Most Expensive States||Top 10 Most Expensive Average Annual Premiums|
What affects homeowners insurance premiums?
There are many factors that could affect your home insurance rate. Some of the most significant include:
- Replacement cost
- Deductible amount
- Credit score
- Home condition and age
- Your area’s vulnerability to weather events such as windstorms and hail
- Claim history
- Roof condition
The list above isn’t exhaustive, but it shows you how insurance companies take several factors into consideration when setting home insurance premiums. Higher deductibles can give you lower monthly premiums. Location can have a positive or negative impact. For example, if your home is close to a fire station you may get a lower premium. Also, different insurance companies will weigh these factors differently, which increases the importance of comparing rates from several companies. Chances are if you don’t get multiple quotes you’re going to end up paying too much. Consider some of the following ways to lower your home insurance premiums: choose a higher deductible, ask for discounts for safety devices, perform necessary home maintenance and home repairs, get a discount for bundling with other policies.
How to save money on home insurance
1. Shop around
When comparing quotes from different insurance providers, it is crucial to not skimp. Your home insurance covers your property against unforeseen damages, and when shopping around for the best rates, take care to not compromise on coverage options. Your comparison of three or more providers should not be based on cost alone, but also on the protection you get for the price.
2. Ask your insurer about discounts
Not all available discounts are always listed on the insurance provider’s website. For instance, if you’re above the age of 55, retired or a former member of the armed forces, you may be eligible for certain home insurance price breaks. Discounts often vary from state to state; therefore, it is best to directly talk to a representative.
3. Bundle policies
Major providers usually offer discounts when you bundle your home and auto insurance policies. However, before you consider bundling options, make sure it is indeed cheaper than what you would pay for separate policies with any other insurer.
4. Raise the deductible
The higher the deductible, the lower the premiums. If you choose to pay more than the standard $500 or $1000 deductible, you can save money on monthly premiums.
5. Improve home security
Installing disaster-resistant features such as shatterproof glass and storm shutters, and reinforcing the roof of the house are some of the ways to secure your dwelling and make a better impression on insurance providers. Modern plumbing, heating, and electrical systems, as well as burglar and fire alarms also contribute to home insurance price cuts.
Home insurance guide: How does it work?
Homeowners insurance provides you with coverage to replace or repair your home and its belongings, if they are damaged from unordinary events (such as theft or fire). Homeowners insurance will also help cover costs if a visitor is hurt in your home.
But first, is home insurance mandatory?
Usually if you’re buying a house, you’re required to buy homeowners insurance before you can continue the sale. Remember, sometimes lenders will suggest insurers to you, but you don’t have to choose one of them.
However, if you don’t get home insurance on your own, your mortgage lender will assign you its choice of homeowners coverage, usually for a much higher cost.
What does home insurance cover?
Dwelling: The policy pays to rebuild or repair your home if it is damaged or destroyed by disasters listed in your policy, including fire, lightning or hail.
Personal property: Any items inside your home, including furniture, clothes, musical instruments and electronics are also covered for the disasters mentioned or if they’re stolen. If you have many expensive items, such as jewelry or art, you may need additional coverage to protect the cost of the valuables.
Liability: Liability coverage protects you financially against lawsuits if a visitor is injured in your home or if a family member causes damages to someone else. It includes your pets — if they bite someone who visits or they damage something inside someone else’s home, your liability insurance will step in.
Cheap is good but you’ll also want to look beyond the price and know what is, and is not, covered by each policy.
When you are purchasing cheap home insurance for the first time, the different parts of the policy might be confusing. Open any home insurance policy in front of you and you will see the following parts.
First comes the policy or declarations section, explaining the crux of your coverage. This includes names, addresses, dates, costs, numbers and definitions of insurance jargon.
- Section I is all about property coverages, namely dwelling, personal property and loss of use.
- Section II includes personal liability coverages, underlining the rights, duties and responsibilities of both the insured and the insurer.
Note that your coverage will depend on the kind of policy you choose and the amount of protection included in it.
Your home insurance policy may have either open or named peril coverage. The former protects you against any loss to the insured property except those that are clearly excluded, while the latter covers only the damages explicitly specified in the policy. For anything outside of what is listed, customers usually have to pay extra.
[ Read: How to Switch Home Insurance Providers ]
Open peril coverage tends to be expensive because of the comprehensive protection, and if you’re looking for lower premium rates, a named peril coverage plan is the one to choose, even though you may have to opt for added coverage if and when needed.
A significant factor differentiating one coverage plan from the other is the way you are compensated in the event of a loss. Some insurers pay actual cash value, after taking into account depreciation that has occurred after a peril (specifically in the case of roof damage). Many insurers pay the replacement cost, which is the full amount to repair or replace the damaged property, irrespective of its condition before the peril. Home insurance covers a few different categories:
Does a home insurance policy have a deductible?
Homeowners insurance comes with a deductible — an amount that you’ll need to pay out of pocket before your insurance pays for the rest. Typical homeowners deductibles can be $500 or $1,000. The higher the deductible, the lower your premium may be (and your monthly payment). When an incident in one of these categories (or one of the supplemental coverages you add on), you file a claim with your insurer and they’ll assess the pay out or reimbursement.
What is actual cash value vs. replacement cost?
The amount of coverage you get determines the magnitude of the risk the insurance company will absorb in the event something happens. Depending on your policy, you’re paid in one of two ways: actual cash value or replacement cost.
Actual cash value
This is when your insurance company factors in depreciation when determining how much money to give you after a covered peril has occurred. This often comes into play after roof damage.
This is when your insurance company pays you the full amount to replace the destroyed or damaged property after a covered peril, regardless of its condition or age prior to the event.
The advantage of an actual cash value policy is that it’s cheaper than a replacement cost policy. It’s also a good option if your home or roof is in new condition, though you will want to upgrade to a replacement cost policy after a few years.
The advantage of a replacement cost policy is that you never have to worry about the gap between what your insurance company gives you and the actual cost of replacing the damaged or destroyed item. However, the downside is that it does cost more than an actual cash value policy. You can do some calculations to see how much it would cost to rebuild your home and which type of policy would be best for you.
What is not covered by homeowners insurance?
As much as insurance is meant to cover the things you can’t plan for, the inverse is also true: you need to plan for the things insurance doesn’t cover. There are certain situations unlikely to be covered by any insurance company — situations that can leave you on the hook for a lot of money if you aren’t prepared.
[ See: How to File a Home Insurance Claim ]
Here are some of the most common situations that homeowners insurance doesn’t cover:
- Earth movement caused by earthquakes, landslides and sinkholes
- Wind damage
- Simultaneous events, such as a storm that causes both wind and flood damage.
- Maintenance neglect (burst pipes, mold, ordinance changes, termites, etc.)
- Nuclear accidents
- Acts of war
What type of home insurance do you need?
Which type of home insurance you get will depend on your needs, the type of home you have and how much you want to pay. Before deciding you will need to know these things about your house:
- Decide what type of home insurance is best for you. You will need to know the following.
- The specifics of your home.
- You’ll need to know details like the age and square footage of your home, as well as the replacement cost and information about siding and roof types.
- Decide how much liability insurance you’ll need in the event someone is injured on your property.
- Combine these two to decide how much coverage you think you need.
Types of home insurance
How to choose the best homeowners insurance for you
- Start the shopping process by gathering a list of potential home insurance companies and looking into their background. Since you’re already here you can read our guide and get many of these details from our research.
- Look particularly at current policyholder satisfaction scores, and find out how the claims response for each insurer works. You want to know if you’ll be dealing with licensed adjusters or a third-party call center. Claims should be paid in a fair and timely manner.
- Once you’ve narrowed the list to 3-4 insurance providers get quotes from all of them. Make sure to include any company you already have insurance through (auto, boat, etc.) since you should be able to get a bundling discount from them.
- Evaluate the probability of a natural disaster. How at-risk is your area for natural disasters like flooding, tornadoes and earthquakes? If your house could be damaged by falling trees or rising water, make sure you find a homeowners insurance carrier that covers these things in its basic coverage policies. While homeowners insurance may cover damage from thunderstorms, like hail damage, it may not cover flooding that seeps into your basement and damages your personal property.
- Lastly, ensure that the homeowners insurance company makes it easy to file claims. If it’s difficult to submit pictures, documents and evidence, it soon becomes a hassle to use your policy. Especially during a stressful time, you want to make sure that you can communicate and file claims with as little stress as possible.
Best homeowners insurance in your state
|New Hampshire||South Dakota|
We welcome your feedback on this article and would love to hear about your experience with the home insurance providers we recommend. Contact us at email@example.com with comments or questions.