The Best Homeowners Insurance Companies for 2020
Fact-checked with HomeInsurance.com
Choosing a home insurance provider is one of the most important decisions you’ll ever make as a homeowner. As 2020 has proved, it’s always best to be financially prepared for the unexpected, and home insurance can save you tens of thousands of dollars by protecting your home and belongings from unexpected damages or events. To make our recommendations for the best homeowners insurance in 2020, we used our proprietary SimpleScore system to rate insurers on accessibility, coverage options, customer service, discounts and support. Each insurer has something different to offer, so the best for you will depend on your specific needs.
In this article
- The best homeowners insurance providers of 2020
- Average cost of homeowners insurance premiums
- Homeowners insurance FAQs
- What is homeowners insurance?
- How does home insurance work?
- Types of home insurance
- What affects the price of my home insurance premium?
- Methodology
The best homeowners insurance providers of 2020
- Amica Mutual – Best for overall value
- Erie Insurance – Best for price
- State Farm – Best for in-app service
- Allstate – Best for claim-free rewards and premium protection
- Farmers – Best for simple policies
- Liberty Mutual – Best for discounts
The best home insurance at a glance
| Provider | Discounts | SimpleScore |
|---|---|---|
| Amica Mutual | Loyalty, multi-line, claim-free, auto pay, e-discount, alarm system, new/remodeled home credit, automatic detection devices | 4.4/5 |
| Erie Insurance | Multi-policy, sprinkler system credit, advanced quote | 3/5 |
| State Farm | Multi-policy, home monitoring systems, impact-resistant roofing | 3.8/5 |
| Allstate | Multi-policy, autopay, claim-free, early signing, welcome & loyalty, new home, 55 and retired, smoke-free home, storm shutters, hail-resistant roofs | 4.4/5 |
| Farmers | Multi-policy, declining deductible, claims free, claim forgiveness | 3.2/5 |
| Liberty Mutual | Multi-policy, online purchase, new home, claims free, safe homeowner, early shopper, newly renovated home, new roof, insured to value, autopay, paperless | 4.4/5 |
Data accurate as of July 9, 2020
COVID-19 Update: We're keeping track of how the coronavirus pandemic is affecting home insurance. Read more.
Best for overall value – Amica Mutual
Amica gives a lot to its customers, both in service quality and dividends.
4.4
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Affordability”5
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Coverage Options4
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Customer Satisfaction5
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Support4
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Accessibility4
Its competitive pricing is due to the insurer’s structure. Amica is a mutual insurance company, meaning it does not have stockholders to answer to — when you have a policy with Amica, you own a small piece of the company. As a result, you can get back up to 20% of your annual premium with a home insurance dividend policy. You can also save with discounts like installing an alarm system, bundling other insurance policies, opting in to auto pay and remaining claim-free for three years.
Our Two Cents — Amica is the small-town star who made it big on Broadway with that down-to-earth charm. It’s a relatively small insurer, but an industry leader in customer service.
Best for price – Erie Insurance
Erie Insurance has some rate lock features that may be ideal if you’re on a tight budget.
3
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Affordability”5
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Coverage Options4
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Customer Satisfaction5
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Support4
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Accessibility4
Savings opportunities are pretty limited. Erie only has three discounts — multi-policy, advance quote and a discount for fire, burglar and sprinkler systems installed. You can lock in your homeowners insurance rate to avoid any surprise increase in price in the future. For those on a budget, knowing what to expect gives you peace of mind. Your policy comes with some free perks thrown in too, such as animal coverage and theft or loss.
Best for in-app service – State Farm
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.
3.8
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Affordability”5
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Coverage Options4
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Customer Satisfaction5
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Support4
-
Accessibility4
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.
Our Two Cents — 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.
Best for claim-free rewards and premium protection – Allstate
If you don’t normally have any claims or incidents, you’ll save the most with Allstate.
4.4
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Affordability”5
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Coverage Options4
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Customer Satisfaction5
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Support4
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Accessibility4
Allstate’s long list of optional coverages include some unique add-ons, including electronic data recovery, green improvement reimbursement and home-sharing. If you’d like to replace damaged items or rebuild after an event with energy-efficient or eco-friendly options, the additional green improvement reimbursement coverage will make it possible. Then there’s the home-sharing option. If you rent your home on Airbnb or other home-sharing apps, your home and property will be covered against any losses.
Our Two Cents — Allstate is the valedictorian of insurance companies — it goes the extra mile to keep you informed and encourages your extracurriculars.
Best for simple policies – Farmers
Farmers provides pre-packaged policies for every kind of homeowner.
3.2
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Affordability”5
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Coverage Options4
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Customer Satisfaction5
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Support4
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Accessibility4
Farmers Insurance is ideal for customers who prefer to work one-on-one with a local agent. It has solid customer service ratings and the local touch is likely to personalize that experience even more.
Our Two Cents — Like In-N-Out, Farmers has a small but mighty menu. You’ll find three options for your policy structure, with some room to customize (no tomatoes please.)
Best for discounts – Liberty Mutual
Liberty Mutual is practically handing out discounts, though it does have poor customer satisfaction ratings.
4.4
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Affordability”4
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Coverage Options5
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Customer Satisfaction3
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Support5
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Accessibility5
Liberty Mutual has the most opportunities for discounting your policy. You can receive a discount for going paperless, opting in to autopay, holding multiple policies, insuring your home to 100% of the replacement cost, having a new roof, purchasing a new home or recently renovating a home, getting a quote before your current policy expires, installing safety systems and remaining claim free for five years (time with your previous insurer counts).
Our Two Cents — Fans of extreme couponing will enjoy that Liberty Mutual has discounts galore in its policies.
How to choose the best homeowners insurance for you
- 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.
- How at risk is your area to 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.
- Do you have a home security system installed or plan to install one soon? Many insurers may offer discounts for extra layers of security that deter or prevent break-ins and burglaries. Furthermore, find a homeowners insurance carrier that will cover theft of jewelry or precious heirlooms in the event that you experience a break-in.
- Read the fine print of the policy. 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.
Types of home insurance
There are many types of home insurance (or HO). In fact, there are eight types. To choose the best policy, you need to know what each is.
- HO-1: Also called a basic form policy, HO-1 protects your home from the ten perils: Damage from aircraft, damage from vehicles, explosions, fire or smoke, hail and windstorms, lightning, riot and civil commotion, theft, vandalism, and volcanic eruption. This type of home insurance usually doesn’t protect any of your belongings inside the home, nor does it offer any liability protection.
- HO-2: Also called a broad form policy, an HO-2 policy protects you against every peril in the HO-1 policy and a few more, including: accidental discharge or overflow of water or steam, falling objects, freezing of household systems (including AC or heating), sudden and accidental damage from artificially generated electrical current, sudden and accidental tearing apart, cracking, or bulging of pipes, and weight of ice, snow or sleet. Unlike an HO-1 policy, the HO-2 policy also comes with liability and personal property coverage.
- HO-3: Called a special form policy, HO-3s are the most common type of homeowners insurance policy. An HO-3 covers every peril listed in an HO-2 and any other type of peril unless it’s specifically excluded (such as flooding). HO-3s protect any attached structures to your home (such as a deck or car garage) and your personal belongings. It also comes with liability protection.
- HO-4: This is the tenant’s form. This type of insurance is also called renters insurance. It comes with liability protection and protects a renter’s personal belongings. It does not cover the building that is being rented. It usually comes with additional living expenses.
- HO-5: This is called a comprehensive form. An HO-5 policy is much like an HO-3 policy in that it is an open-peril policy— meaning it covers any type of peril that isn’t specifically mentioned. Common exclusions include earthquakes, floods, infestations, foundation problems, intentional damage, landslides, mold, rot, mudslides, neglect, pets, rust and corrosion, war, nuclear damage and water damage.
- HO-6: This is the condo form. HO-6s are intended for condo owners and come with liability and personal property coverage. Though they don’t cover the entire building, they do cover the walls, floors and ceiling.
- HO-7: This is the mobile home form. Much like an HO-3, it protects mobile and manufactured homes.
- HO-8: This is the older home form. It’s also similar to an HO-3 policy, but it addresses special concerns that come with older homes. Often historic, landmark homes have an HO-8 policy.
Which type you get will depend on your needs, the type of home you have and how much you want to pay.
Average cost of homeowners insurance premiums
| Top 10 Cheapest Average Premiums by State | Top 10 Most Expensive Average Premiums by State | ||
|---|---|---|---|
| Oregon | $677 | Louisiana | $1,968 |
| Utah | $692 | Florida | $1,951 |
| Idaho | $730 | Texas | $1,893 |
| Nevada | $755 | Oklahoma | $1,885 |
| Wisconsin | $779 | Kansas | $1,584 |
| Arizona | $825 | Rhode Island | $1,551 |
| Delaware | $833 | Mississippi | $1,537 |
| Washington | $854 | Colorado | $1,495 |
| Ohio | $862 | Massachusetts | $1,488 |
| Maine | $882 | Nebraska | $1,481 |
* Source
Homeowners insurance FAQs
What is homeowners insurance?
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.
Most of the time, homeowners insurance is not optional — if you have a mortgage, your lender will require you to have an insurance policy. If you don’t, your mortgage lender will assign you its choice of homeowners coverage, usually for a much higher cost.
How does homeowners insurance work?
Home insurance covers a few different categories:
- 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.
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 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.
Here are some of the most common situations that homeowners insurance doesn’t cover:
- Flooding
- 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 affects the price of my home insurance premium?
There are many factors that could affect your premium’s price. 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
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 and replacement cost.
- Actual cash value 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.
- Replacement cost 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.
How much homeowners insurance do I need?
The amount of your homeowners insurance coverage depends on your home’s replacement cost and the value of the items inside your home. You may need to conduct an inventory of your belongings for the most accurate amount for your homeowners insurance.
Does homeowners insurance protect my appliances if they break?
Unfortunately, no. Appliances are covered under home warranty policies, which are applicable when an appliance’s warranty runs out then fails or needs repairs.
Will my premium go up if I make a claim?
Yes, your premiums will increase after you file a claim. Because of this, you may want to think twice before you file one. Weigh the cost of a potential increase in monthly payments, versus the cost for you to fix the issue yourself. This is especially important to consider if the claim won’t fulfill your deductible, which you’ll need to meet before insurance covers anything. Some insurers do offer a claim forgiveness feature which may be lenient on your first claim or will dismiss some after a few years of being claim free.
Too long, didn’t read?
Each person has a vastly different profile that will determine the best home insurer for them. We recommend getting quotes from a few different places to compare. Take some time to do the homework about the details of your home and valuables, common claims in your area and coverage options to figure out exactly what you’ll need from your policy.
Keep reading
- Swimming Pools and Home Insurance
- How to Dispute a Home Insurance Claim Settlement
- Home Warranty Versus Home Insurance
Methodology
The SimpleScore is our proprietary scoring metric to compare products and services at The Simple Dollar in a transparent, evidence-based way. Our editorial team identifies five quantifiable aspects to compare for every brand, determines the rating criteria for each aspect score, then averages the five aspect scores to produce a single SimpleScore. For home insurance, we compared accessibility, coverage options, customer service, discounts and support for every major provider. Our ratings are meant to be a directional tool to help you in the process of choosing a home insurance provider. Be sure to continue your research and shop around for the best homeowners insurance that fits your specific needs.
Last updated July 9, 2020 — Added additional educational information and purchasing process guidance.
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 inquiries@thesimpledollar.com with comments or questions.
The impact of COVID-19 on your home insurance.
Many homeowners insurance carriers have suspended service cancellations, waived late fees or applied percentage discounts on insurance policies in response to the pandemic outbreak. However, many people are now working from home and may wonder if their homeowners insurance covers equipment needed to work. Things like monitors, computers and other office equipment may be covered under home insurance or at least your company’s business insurance policy.
More resources
Danika Miller
Personal Finance Reporter
Reviewed by
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Courtney Mihocik
Editor
