The Best Homeowners Insurance Companies for 2020
Fact-checked with HomeInsurance.com
by Mike Jelinek Updated on Mar 25, 2020
Homeowners insurance protects your investment and ensures that your finances aren’t ruined if something happens to your property. There are dozens of national and regional insurance companies who want your business, and the options can feel overwhelming. With all those choices, how do you find the best home insurance provider — with the best coverage at the best price — for your home?
For some readers, price will matter more than any other criteria. If you’d simply like to find the best home insurance rates in your area, you can easily compare homeowners insurance quotes online (and for free) using The Simple Dollar’s quote tool below:
While price is certainly important, there are some other factors to consider when choosing a homeowners insurance policy. After all, we’re talking about protecting the place you live and what is likely to be your biggest investment.
In this article:
- The best homeowners insurance companies for 2020
- Choosing the best home insurance company
- Homeowners insurance rates by state
- Which factors determine homeowners insurance rates?
- What does homeowners insurance cover?
- Important things to keep in mind
- The bottom line
The best homeowners insurance companies 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
1. Best homeowners insurance for overall value: Amica Mutual
Amica Mutual earned the top spot on our list of best homeowners insurance based on its performance in J.D. Power’s 2019 U.S. Home Insurance Study, placing at the top of the rankings for the 18th consecutive year. This company received high marks in all categories covered, including customer satisfaction, policy offerings, price, billing process and policy information, interaction and claims.
Amica Mutual offers homeowners insurance policies that can be tailored to meet your unique needs. It offers discounts for customers who bundle other policies such as auto insurance, and in our sample quote below, Amica was roughly $40 less expensive than State Farm, the second cheapest provider.
Amica Mutual reports an A+ rating for financial strength and claims payment ability from AM Best Company. Amica Mutual also boasts a 95% retention rate, meaning that most consumers who switch their homeowners policies to Amica Mutual choose to stay with the company.
2. Best homeowners insurance for price: Erie Insurance
Erie Insurance also received high marks in the 2018 J.D. Power survey. While Erie Insurance received at least three out of five in every category, it scored particularly well on price — specifically, how customers viewed pricing in relation to their level of coverage.
Erie promises 24/7 customer service and around the clock claims help, along with guaranteed replacement cost of your home in the event you file a claim. Erie also allows customers to make selections when putting together their policies to fit their needs. In addition to basic homeowners insurance, customers can add extra coverage for earthquakes, flooding, water backup and sump pump overflow and jewelry and high-end valuables.
Erie Insurance is the 9th largest homeowners insurance company in the U.S. and the company received an AM Best rating of A+ for its financial stability.
3. Best for in-app service: State Farm
State Farm earned best in-app service because their app has the most functionality and great extra features when compared to competitors.
State Farm is another national company that offers homeowners insurance along with auto and life insurance options. It earned above average ratings in each of the categories assessed in J.D. Power’s Home Insurance Study, including price. State Farm also offers discounts for consumers who bundle several policies in some states, along with discounts for home security systems, impact-resistant roofing systems and higher deductibles.
Like some other companies on this list, State Farm gives customers flexibility in their policies. You can add special riders to your homeowners insurance policy, for example, and you can boost coverage amounts and move your deductible up and down to achieve your desired premiums.
State Farm stands out with its app, which offers the most features out of the other home and auto insurance companies on this list. If you’re in an accident, you can use the app to book a rental car and select a repair shop from State Farm’snetwork. You can also pay your bill, file and check on claims and request roadside assistance.
Also note that State Farm has achieved excellent ratings within the insurance industry, including an A++ rating from AM Best and an AA rating from S&P Global Ratings for their financial strength.
4. Best for claim-free rewards and premium protection: Allstate
Allstate is another national insurance firm that sells personalized coverage for homes, autos, rental properties and recreational vehicles.Allstate home insurance received better-than-average marks in J.D. Power’s Home Insurance Study, and Allstate received an A+ rating from AM Best for its financial strength as a company.
Allstate lets homeowners pick from its selections to create policies that meet their unique needs, including the ability to add extra coverage for floods and identity theft restoration.
Allstate stands out from the competition with its optional claims features. Adding these features to a policy provides special savings for customers who haven’t filed a claim, $100 per year you stay claim-free, up to $500. The Claim-Free Bonus feature gives up back 5% on your renewal for every year you go without filing a claim. The Claim Rateguard® promises that your premium won’t go up if you do file a claim.
While Allstate features many brick and mortar offices around the country, it also has a robust online platform and tools that can help you file claims and pay premiums online.
5. Best homeowners insurance for simple policies: Farmers Insurance
Farmers Insurance made our list of best home insurance companies based on its performance in J.D. Power’s Home Insurance Study and recent ratings. Not only did Farmers Insurance pull in solid rankings with J.D. Power, but it also received an A+ rating from AM Best for its financial strength in early 2019.
Farmers Insurance has three levels of coverage for consumers who purchase their homeowners insurance policies — standard, enhanced and premier. Where the standard policies are geared to families just starting out, enhanced policies include higher coverage limits and extra features. The premier policies, on the other hand, include the highest limits on coverage and personal property and can even include guaranteed replacement cost coverage for your home if certain requirements are met.
Like Allstate, Farmers offers special discounts for customers who remain claim-free. You may also receive $50 toward your deductible each year your policy remains in force along with “claim forgiveness” if you’ve remained claim-free for five continuous years.
6. Best homeowners insurance company for discounts: Liberty Mutual
Liberty Mutual doesn’t do as well on J.D. Power’s Home Insurance Survey, receiving only two out of five stars. And Liberty Mutual home insurance reviews online aren’t great either. But when it comes to discounts, Liberty Mutual is one of the most competitive providers. Some of their discounts include:
- Multiple-policy discount: This discount is available if you have an auto, life or other type of insurance policy with the same provider.
- Protective device discount: This is available if you have a home security system, sprinkler systems, fire alarms or other security devices in your home.
- Claim-free discount: This discount is available if you haven’t filed a claim over a certain period of time.
- Exclusive group savings: You can get this discount if you have membership or affiliation with certain businesses or organizations. Liberty Mutual’s group savings network includes more than 14,000 employers, alumni associations and professional associations.
- Newly purchased home: This is available if you recently purchased your home.
- Renovated home: You can get this discount if you recently renovated your home.
- Early shopper discount: You can get this discount if you request a quote before your current policy expires.
- Insured to value discount: This discount is available when you insure up to 100% of the cost to replace your home.
If your prime goal when buying homeowners insurance is to save money, Liberty Mutual is a good pick. It has an “A” rating with AM Best.
Choosing the best homeowners insurance company
Online tools allow you to determine the type of coverage you want, select the level of your deductible and choose the payment terms. It might take a little extra legwork, but online quote tools put the power in your hands to find the cheapest policy.
Many online tools, like the one provided by Liberty Mutual, enable you to modify the coverage levels you select, so you can clearly see how changing one component directly impacts the price of your policy. For example, you could enter a low value for your deductible, see what your rates look like and then enter a higher value and see how your rates changed.
We used online tools to get the most accurate estimate of what your homeowners insurance would cost with each of the providers on our list. We used the following criteria:
- Location: Address located in a Chicago suburb
- Home Value: $315,000
- Deductible: $1,000
- Size: 1,900 square feet
- Applicant Age: 40
- Home Type: 1 story
- Roof Type: Asphalt shingle
- Payment Terms: Monthly
Here are the online quotes we received:
- Amica: $75.33
- State Farm: $117.75
- Liberty Mutual: $129
- Farmers: $150
Homeowners insurance discounts
All of the best homeowners insurance companies offer a variety of discounts. If you fail to take advantage of these discounts, you’re just leaving money on the table.
To give you one example, if you took advantage of a multi-policy discount that many home and auto insurance companies offer, you can save money. If you bundled the same State Farm home insurance policy quoted above with an auto insurance policy, your monthly rate would drop from $117.75 to $76.50. That’s almost $500 in savings per year!
The best property insurance companies offer a number of discounts to help you save on premiums. If you’re unhappy with your current policy or feel like you’re paying too much, you can always get a quote with a new provider that offers discounts that better match your profile to see if you’d save money.
Methodology
When it comes to home insurance, most homeowners want a high-quality policy from a reputable company that will be there when they need them. The best homeowners insurance companies offer affordable pricing, policies that can be tailored to individual needs, transparent, and a reasonable claims process.
To determine the best home insurance companies of 2020, we started with J.D. Power’s 2018 U.S. Home Insurance Study. This survey of more than 14,000 consumers compared homeowners insurance companies in terms of their quality, customer satisfaction, policy offerings, and price point. We also gave preference to companies that offered homeowners insurance on a national level.
Homeowners insurance rates by state
The trick of shopping for home insurance becomes finding the best coverage for your needs at the best price. You don’t want to overpay, but you also want to be protected, which might mean preparing to pay more than initially planned.
To be fully covered against disaster, you’ll need plenty of added endorsements, increased coverage limits and potentially an extra flood insurance policy. These endorsements could significantly increase your annual premiums above the original “sticker price.”
While it may be tempting to cut corners to save some of those costs at the onset, the financial ramifications of not having adequate coverage when you need it could be severe. The trick of shopping for home insurance becomes finding the best coverage for your needs at the best price. You don’t want to overpay, but you also want to be protected, which might mean preparing to pay more than initially planned.
With the national average monthly homeowners insurance cost being $79, see how each state compares:
| State | State vs. National Average % |
|---|---|
| Alabama | 51.30% |
| Alaska | -6% |
| Arizona | -17.40% |
| Arkansas | 16.80% |
| California | -31.10% |
| Colorado | 22.80% |
| Connecticut | -6.60% |
| Delaware | -29.80% |
| Florida | 21.60% |
| Georgia | 19.90% |
| Hawaii | -7.00% |
| Idaho | -40.90% |
| Illinois | 1.60% |
| Indiana | 0.70% |
| Iowa | -14.70% |
| Kansas | 32.00% |
| Kentucky | 14.40% |
| Louisiana | 182.00% |
| Maine | 18.70% |
| Maryland | -15.40% |
| Massachusetts | 44.50% |
| Michigan | 61.90% |
| Minnesota | 32.70% |
| Mississippi | 55.10% |
| Missouri | 52.60% |
| Montana | 2.70% |
| Nebraska | 22.60% |
| Nevada | -39.60% |
| New Hampshire | -35.40% |
| New Jersey | -26.00% |
| New Mexico | -37.00% |
| New York | -32.10% |
| North Carolina | -9.60% |
| North Dakota | 126.40% |
| Ohio | -6.10% |
| Oklahoma | 99.20% |
| Oregon | -52.20% |
| Pennsylvania | -20.30% |
| Rhode Island | 5.60% |
| South Carolina | 31.70% |
| South Dakota | 6.60% |
| Tennessee | 15.80% |
| Texas | 40% |
| Utah | -45.80% |
| Vermont | 0.07% |
| Virginia | 5% |
| West Virginia | 26.30% |
| Washington | -28.60% |
| Wisconsin | -13.70% |
| Wyoming | 24.60% |
Which factors determine homeowners insurance rates?
There are many factors that influence how much you’ll pay for a homeowners insurance policy, some of which are out of your control. Fortunately, you can take steps and make adjustments in coverage to help ensure you get the most affordable home insurance coverage possible.
The most common factors that can influence your homeowners insurance premium include:
- Home’s age and type of construction
- Location
- Claims history
- Risk factors
- Credit score
- Deductible
- Coverage amount
- Fire protection rating
Home’s age and type of construction
If your home is older, there’s a higher chance there will be problems with major components like plumbing, electrical wiring and HVAC systems. New homes are less susceptible to these major problems and thus individuals buying a newly-built home will pay less.
Location
While the average annual home insurance premium nationwide was $1,173 in the III’s most recent study, that ranged dramatically from place to place — from a low of $643 a year in Oregon to a high of $1,993 in Florida. If you live in an area prone to natural disasters, with a relatively high crime rate or located far from emergency services, you can expect to pay even more for your policy.
Even if you did your research when home shopping and chose a neighborhood with low or non-existent crime rates, you can never prevent all crime. Your home is stationary, but criminals aren’t. However, simple steps like adding an alarm system or deadbolts will not only make your home safer, it may also make it cheaper to insure.
You can control your personal claim history to some extent, but there’s less you can do about your location claim history. As seen on our interactive map, insurers charge a higher rate in states that are regularly victims of weather disasters. The same is also true of areas frequented by burglars.
Claims history
If you file several claims a year, you are more likely to pay a higher premium. If you’ve had a lot of accidents with previous insurers, chances are you’ll be filing a claim at some point with the new one. You can expect a higher premium. You can try to reduce this risk by being a responsible homeowner. Preventative maintenance and proper safety measures can go a long way toward minimizing your claims and your premiums.
Risk factors
If your home has a swimming pool, aggressive dog, trampoline or other characteristic deemed risky, you’ll likely pay a higher premium.
Because of the drowning risks both to your family and anyone visiting your property, a pool will significantly increase your home insurance premium. Securing your pool with its own fence, installing self-locking gates and having safety equipment readily accessible may be enough to lower your risk in the eyes of an insurance company.
However, the best way to avoid the higher premiums is avoid installing a pool at all. The money saved on the insurance may even be enough for a gym or private pool membership, a place where someone else assumes all of the financial risk.
Along with pools, trampolines make up what insurance companies refer to as “attractive nuisances.” They’re fun, but the risks involved make them a headache to insure. You can reduce your personal injury risk by installing a net around your trampoline, but it won’t be enough to lower your premium. The easiest way to do that is to not get one in the first place or invest in safer recreational yard equipment instead.
Credit score
Just as a poor credit score results in a higher interest rate on personal loans, it can also influence your home insurance premiums. Many states let insurers use your credit score when determining a premium. That credit score is a number that reflects your bill payment history, current amount of debt, and other measures of financial responsibility. It’s a quick way for a bank to determine how risky an investment you are.
The insurance industry is also a financial one. If you appear to be a risky customer with a history of missing payments, you could see that reflected in your premiums. The easiest way to avoid that is by taking the necessary steps to raise your credit rating: pay your bills on time every time, keep credit card balances low and eliminate debt.
Deductible
The level of deductible you choose plays a role in the price of your coverage. If you choose a high deductible, that means you have to pay more out of pocket if an incident does occur. The trade-off is a lower premium. We recommend sticking with a deductible you’re comfortable with. If your home is damaged, coming up with $1,000 is probably manageable. Coming up with $2,500 or $5,000 is probably going to be more difficult for most of us. Remember, your insurance won’t kick in until after the deductible is met.
Coverage amount
The amount of coverage you select will play a role in the price of your insurance.
Fire Protection
All areas have a fire protection rating based on how far it is from a water source and the distance to a responding fire department. If a fire were to break out in your home, a poor fire protection rating increases the chances of total property loss, which in turn increases your insurance premiums. Fire protection systems wouldn’t be sufficient to decrease your premiums in that case, but installing a sprinkler system could. It’s a costly solution, but one that could pay off in the long run.
You can’t control some of these factors. But by minimizing the risks within your power to control, you can help keep your home insurance premiums down.
What does homeowners insurance cover?
The main reason you buy an insurance policy is for the coverage it provides. Standard coverage options include:
- Dwelling coverage: This is the part of your policy that helps pay to repair or rebuild your home if damage is the result of a covered loss.
- Liability insurance: This insurance protects your assets and covers costs associated with a lawsuit when you or a family member are responsible for injuring another person, or if someone is injured on your property.
- Other structures coverage: This type covers the cost of repairing or rebuilding detached garages, sheds and other similar structures.
- Personal property coverage: This covers your clothing, electronics, furniture and other belongings that are damaged or destroyed by a cause that’s covered by your insurance.
- Loss of use coverage: If your home is damaged to a degree that you have to temporarily move out while it’s being repaired, loss of use will help pay your housing and living expenses.
- Guest medical coverage: This provides coverage for medical bills and related expenses when someone is injured on your property, but they do not want to sue you.
What does homeowners insurance not cover?
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
Home insurance companies assign a certain level of responsibility to the homeowner for performing both routine and preventative work on a home to keep it properly maintained and livable. As such, there are many maintenance-related issues not covered by standard policies:
- Burst pipes
- Mold
- Ordinance changes
- Sewer backups
- Termites
Nuclear accidents
Any damage caused by accidents at a nearby nuclear power plant are not covered by home insurance policies. However, federal law requires nuclear power companies to contribute to an insurance pool that will cover the costs of nuclear accident damage.
Acts of war
In the United States, being covered against acts of war probably isn’t a primary concern when purchasing home insurance. However, with the number of domestic terror attacks either executed or prevented over the past few years, more people are probably starting to think about it.
Home and auto insurance companies don’t cover any terror attacks that use nuclear, biological, chemical or radioactive weapons. They are considered acts of war, and therefore uninsurable. Most insurance policies do cover damages caused by explosions, smoke and fire, which are the most likely of an unlikely scenario.
Additional protection
In addition to the basic coverage options listed above, you can purchase riders to expand coverage in specific areas. For example, Allstate home insurance also offers optional coverage for identity theft restoration, scheduled personal property and water backup.
Most home policies cover damage from wind and fire, but natural disasters like floods or earthquakes almost always have to be added on as an additional policy option. If you live in areas particularly susceptible to these threats, look into the catastrophic coverage options offered by the provider before making a purchase.
Important things to keep in mind
As you compare quotes and shop for the best home insurance policy, remember these tips.
You might be under-insured
Most people concerned about the scope of their insurance coverage try to protect themselves against all possibilities by adding extra endorsements to their existing policies. However, even someone who’s completely “covered” could still be underinsured — in fact, about half of homeowners are. Most are insured for repairs, but in the event of catastrophic damage, you might have to rebuild.
Your policy’s dwelling coverage includes rebuilding your home, but that coverage could be insufficient. Most people initially choose a coverage limit equal to the cost of their home upon purchase because most home insurance policies are first bought as a requirement for mortgage approval. But lenders only require the minimum dwelling coverage, which is equal to the selling price of the home, not the replacement cost. That’s because their only concern is recovering their investment in the event of a total loss.
However, there are a number of factors that could make a rebuild more expensive than the original purchase price or tax assessment of your home.
- The cost of building materials have increased
- Specialized workers might be needed for a rebuild
- New building codes could require new, costly features
It’s important to make sure that you have enough dwelling coverage to cover the full cost of a rebuild.
Some valuable items need their own endorsements
Personal property coverage reimburses you for the cost of replacing the valuable items in your home should they become lost or damaged in a covered event. However, that coverage does have a specific dollar limit.
For valuable, high-priced items (like an expensive engagement ring), consider purchasing a special endorsement for the official appraised value to ensure that you’re fully reimbursed.
Home insurance covers damage; a home warranty covers mechanical breakdowns
Home insurance does not cover mechanical breakdowns. Those systems fall under the umbrella of general maintenance for which the homeowner is responsible. However, a home warranty does cover those systems, as well as important appliances. It also covers many of those “routine maintenance” areas that home insurance doesn’t, such as electrical systems, plumbing, garage doors, and even some roof replacement.
The Bottom Line
When shopping for homeowners insurance, compare several companies in terms of their pricing, ratings and homeowners insurance offerings before purchasing a policy. With advanced research, you can get a high-quality homeowners insurance policy that fits your budget and needs.
If you’re currently renting, check out our article on the best renters insurance companies.
