How to Find Cheap Homeowners Insurance in 2020

Finding cheap home insurance should be easy. Call up some insurance providers or get some quotes online, compare prices and choose the lowest one. However, with the importance of proper homeowners insurance, price isn’t always the best comparison point. After all, home insurance protects the structure of your house and your belongings. It also covers your liability if someone is injured at your home.

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    In this article

      Though several factors that determine your home insurance rates are beyond your control, there are strategies that will help you find cheap home insurance.

      Tip: Actual cash value is the least expensive and guaranteed replacement is typically the most expensive.

      The 4 best cheap home insurance companies of 2020

      • Cheapest for First-Time Buyers and Seniors – Allstate
      • Cheapest for Tiered Coverage – Farmers
      • Cheapest for A La Carte Options – Geico
      • Cheapest for Discounts – Liberty Mutual
       DiscountsAdditional Coverage OptionsJ.D. Power ScoreSimpleScore
      AllstateMulti-policy
      Automatic payments
      Claim-free
      Protective devices
      Early signing
      Welcome and loyalty
      Homebuyer
      55 and retired
      Smoke-free
      Storm shutters
      Hail-resistant roofs
      Flood Insurance
      HostAdvantage
      Identity Restoration Coverage
      Manufactured/Mobile Home
      Personal Umbrella
      3/54.4
      FarmersFire alarm
      Fortified window
      Home upgrades
      Impact resistance roofing
      New Home
      Non-smoking
      Security systems
      Eco-rebuild
      Living expenses
      Medical payments
      Personal property
      3/53.2
      GeicoBundling with other policies
      Claims-free
      Fire alarm/smoke detectors
      Home security system
      New home
      Earthquake
      Electronics
      Identity theft
      Sump pump
      N/A3.5
      Liberty MutualClaim-free
      Safe homeowner
      Early shopper
      New/renovated home
      New purchase
      New roof
      Multi-policy
      Insured to value
      Automatic payments
      Paperless policy
      Valuables
      Water backup and sump pump overflow
      Inflation protection
      2/54.4

      The 4 best cheap home insurance companies

      Cheapest for first-time buyers and seniors – Allstate

      Allstate claims “you’re in good hands”. We’re still not sure who’s hands you’re in exactly, but when it comes to good coverage, we agree.

      J.D. Power Rating
      3/5
      AM Best Rating
      A+
      Standard & Poor’s
      AA-
      SimpleScore
      4.4 / 5.0
      close
      SimpleScore Allstate 4.4
      Discounts 4
      Coverage Options 5
      Customer Satisfaction 3
      Support 5
      Accessibility 5

      Allstate isn’t the largest insurance company by accident. Customers turn to the insurer for one-on-one service from local agents nationwide, a variety of insurance options and competitive pricing. They may not be the least expensive right off the bat, but if you take advantage of the discounts, such as newly built homes, new homebuyer or senior discounts, you’re bound to save some serious money.

      The company website has an online library of insurance resources and tools and definitions about insurance types and policies. It will come in handy when you’re deciding on what exactly you need. Allstate is available in all 50 states, so it’s a good option for home insurance regardless of where you live.

      Cheapest for tiered coverage – Farmers

      If analysis paralysis is real for you, Farmers makes it easy to pick a policy without overthinking things.

      J.D. Power Rating
      3/5
      AM Best Rating
      A+
      Standard & Poor’s
      N/A
      SimpleScore
      3.2 / 5.0
      close
      SimpleScore Farmers 3.2
      Discounts 2
      Coverage Options 3
      Customer Satisfaction 3
      Support 4
      Accessibility 4

      Farmers keeps choosing home insurance simple. You can choose from one of three packages with the level of service you prefer: standard, enhanced or premier. Coverage for each policy varies from the basic plan that emphasizes affordability to the high-end plan with the highest coverage limits available. Coverages are available nationwide, except for premier coverage, which is not available in California.

      The company doesn’t offer as many discounts as some other providers, but the bundled quality of its policies makes homeowners insurance affordable. In addition, Farmers offers discounts for homeowners who have anti-theft and fire systems in their home, don’t smoke and bundle their policies. If you’re a teacher, police officer, firefighter, military member, doctor, nurse, dentist or engineer, you may also qualify for savings.

      Cheapest for à la carte options – Geico

      If the barista at Starbucks needs to write down all the changes you want for a latte, you’ll love all the ways you can customize homeowners insurance with Geico.

      J.D. Power Rating
      3/5
      AM Best Rating
      A++
      Standard & Poor’s
      AA+
      SimpleScore
      3.4 / 5.0
      close
      SimpleScore Geico 3.4
      Discounts 2
      Coverage Options 2
      Customer Satisfaction 3
      Support 5
      Accessibility 5

      No two people are alike — and neither are homeowners insurance policies Geico has made a name for itself as the king of options to choose from rather than settling for prepackaged tiers like some other companies. Because of that, you’ll only pay for the coverage you need. That can help you save a significant amount of money.

      The best way to save money with Geico is to bundle a home and auto policy — you’ll save on both. Military, federal employees, students and retired homeowners can qualify for a discount. Geico also partners with hundreds of groups and companies to offer member and employee discounts. No matter where you live or what you love, Geico can help keep your home protected.

      Cheapest for discounts – Liberty Mutual

      If you never ever pay full retail, Liberty Mutual has enough discounts to ensure you won’t on insurance either.

      J.D. Power Rating
      3/5
      AM Best Rating
      A
      Standard & Poor’s
      N/A
      SimpleScore
      4.4 / 5.0
      close
      SimpleScore Liberty Mutual 4.4
      Discounts 5
      Coverage Options 4
      Customer Satisfaction 3
      Support 5
      Accessibility 5

      Liberty Mutual is helpful for homeowners who want to save money on their policy. The company doesn’t offer the cheapest rates, but you’ll feel satisfied knowing you’re getting quality coverage for a great price. The secret to saving, as with most insurers, is by taking advantage of discounts. Liberty Mutual offers discounts for having fire and anti-theft devices, being a first-time home buyer, bundling policies, being claims-free, having a new roof and getting a quote before your existing policy ends.

      Saving money doesn’t mean sacrificing coverage. Liberty Mutual also offers comprehensive coverage options and good add-on policies, like coverage for water back up issues. Optional coverages add up — the online quote tool is also easy to use and will give you a better idea of how much the extras will cost you.

      9 tips to find cheap homeowners insurance

      “How can I get cheap home insurance?” is one of the most commonly asked questions among homeowners looking to save on their insurance. However, several factors influence your home insurance rates. The most obvious include your home’s location, age and construction type. Newer homes in areas with low risk of natural disasters or crime are the cheapest to insure. Unfortunately, these things are often beyond your control. But there are still several strategies you can use to reduce your home insurance bill. Use the following nine tips to nab cheap homeowners insurance.

      Find the Best Home Insurance

      Save money on home insurance with our simple comparison tool.

      Matching you with providers.
      We found results in
      Click at least 2-3 companies to find the very best rate.

        1. Shop around

        You’ll need to shop around to find the cheapest home insurance. Online quote tools can help you save a lot of time over calling individual insurers, and some even allow you to compare quotes from several companies at once. Don’t assume a certain provider will be the cheapest home insurance company because it was for your family or friends. Your home and circumstances are different, and your bill will be different too.

        2. Don’t over-insure

        Insure for what it would cost to rebuild your home, not to rebuy it. This is an important distinction because market value takes into account the location of your home and the value of your land. Your homeowners policy doesn’t pay for any damage to your land.

        [Read: The Best Homeowners Insurance Companies for 2020]

        When it comes to personal property, experts emphasize the importance of taking a home inventory to determine the value of your belongings. You can do this online with the Insurance Information Institute’s free Know Your Stuff inventory tool. You may want to think twice before opting for actual cash value over replacement cost policies. While going with actual cost value will save you money on your premium, it could cost you a lot more in the event of a claim. For example, think about how quickly your new TV depreciates. If you cover it for actual cash value, you may only get a few hundred dollars, if that, to replace it when comparable models are well over $1,000 in stores.

        3. Bundle your policies

        Your insurer would love to have all of your business. Check to see whether you’ll get a discount for having multiple policies — for instance, home, auto and life — with the same company. Compare whether you’ll actually be paying less overall with the same company than you would with policies elsewhere.

        Keep Reading: [The Best Home and Auto Insurance Bundles 2020]

        4. Consider a higher deductible

        As with most types of insurance, the higher your deductible, the lower your monthly bill. When you make a claim, your deductible is the amount you agree to pay your insurance company before your coverage kicks in. Going as high as you can comfortably afford in the event of a claim can mean major savings. Raising your deductible from $250 to $1,000 can save you as much as 24%. A $5,000 deductible can save you as much as 37%. Remember that raising your deductible only makes sense if you have savings to pay the higher amount in the event of a claim.

        5. Rethink certain risky choices

        You can’t move your home out of tornado alley or a crime-ridden city, but you can rethink certain things insurance companies frown upon:

        • Swimming pools: Adding a swimming pool will almost certainly boost your bill because of injury and drowning risks.
        • Certain types of dogs: Insurers charge more if you own certain breeds they perceive as a potential risk to others, including pit bulls and rottweilers.
        • Trampolines: Your kids may adore their trampoline, but your insurance company does not — they will raise your rate to guard against your liability if a neighbor’s child falls off and is injured.

        6. Add safety features

        The lower your risk of claims, the more you’ll save. Protect your home from fire damage and theft with small improvements. Standard safety features such as deadbolts, smoke detectors, carbon monoxide detectors and fire extinguishers may earn you a small discount. A security system can let you save even more, depending on your insurer. Fortunately, most of these upgrades are simple DIY tasks.

        [More: 4 Eco-Friendly Home Modifications That Can Lower Your Home Insurance Premium]

        If your home is in a disaster-prone area, check for special modifications you can make to further reduce your premiums. Adding features such as storm shutters, storm-resistant garage doors, stronger roofs and shatter-proof windows can help you save.

        7. Maintain good credit

        Unless you live in the few states that prohibit it (California, Maryland and Massachusetts), most insurers consider your credit score when calculating your premium. According to the Federal Trade Commission, your credit score can affect your home insurance rates, sometimes dramatically.

        Here’s the reasoning: If you have excellent credit, you’re less likely to file a claim and are rewarded with lower premiums.

        If you have bad credit, you’re seen as a greater risk, and that can send your bills higher.
        Unfortunately, building good credit can take time, and it won’t be something you can do at the last minute before you buy insurance. However, given the range of financial dealings your credit can impact, it’s worth it for the long haul. Monitor your credit score and don’t wait for your policy to renew in a year if you see a positive change. Ask your insurer to re-evaluate your policy to account for the credit score improvement.

        8. Review your coverage every year

        Don’t buy a home insurance policy only to forget about it. Take a few minutes to get a couple of online quotes once per year to compare the cost of your current policy to what other insurers are offering. You’ll need to make changes if you make any major purchases or additions that need protection and streamline your coverage if your home or possessions lose value. You should also check for applicable discounts if you make improvements. This will also let you keep tabs on how much your insurance company raises your limits each year because of inflation.

        9. Take advantage of other discounts

        It’s common for home insurance companies to offer a range of discounts. You may not qualify for all of them, but it never hurts to ask. Seniors, nonsmokers, longtime customers and members of certain alumni or professional associations may qualify for lower premiums. Choosing to receive electronic statements and autopay could knock off at least 5% off your bill. If you don’t see a discount, ask. The insurer may extend it to you.

        [Read: Homeowners Insurance Discounts Through Home Improvement]

        What does homeowners insurance cover?

        Homeowners insurance covers many of the common situations you might face as a homeowner. This includes damage to the exterior of your home and the belongings inside. It also covers some liability. Here are the main perils that a basic home insurance policy covers:

        • Fire or lightning
        • Windstorm or hail
        • Explosion
        • Riot or civil commotion
        • Damage caused by aircraft
        • Damage caused by vehicles
        • Smoke
        • Vandalism or malicious mischief
        • Theft
        • Volcanic eruption
        • Falling objects
        • Weight of ice, snow or sleet that causes damage to a building
        • Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning or automatic fire-protective sprinkler system or from a household appliance
        • Sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system, an air conditioning or automatic fire-protective system
        • Freezing of a plumbing, heating, air conditioning or automatic fire-protective system or of a household appliance
        • Sudden and accidental damage from an artificially generated electrical current

        One of the reasons why insurance companies limit their coverage is to keep the cost of insurance premiums low. On average, homeowners insurance costs $1,211 per year in the United States. However, the amount that you’ll pay varies by state.

        For instance, Louisiana experiences frequent hurricanes and coastal storms, so homeowners in that state will pay significantly more for insurance. A homeowner in Nevada, which does not experience extreme weather, will pay less for their policy.

        [Read: Home Insurance Quotes, Explained]

        There are several types of homeowners insurance, but they all protect your home from perils, which is a fancy way of referring to something bad that damages your property. Homeowners insurance policies are denoted by numbers: HO-1, HO-2, HO-3 and so on.

        HO-1 policies are so basic that most insurance companies have stopped selling them. The best option is to get a policy with more protection

        The difference between HO-2, also called broad form policies, and HO-3, called special form, is that HO-2 policies specify everything they cover and HO-3 policies don’t. In other words, if you have an HO-2 policy and something happens to your home that isn’t on the list above, you’re out of luck. HO-3 policies, on the other hand, cover everything that could happen to your home except for what they specifically exclude. Standard exclusions include earthquakes, floods, war, nuclear disasters, neglect and pests. HO-3 policies are the most popular.

        HO-5 policies are like HO-3 policies but protect your personal belongings too. There are other types of homeowners insurance for special circumstances:

        • HO-4 policies protect renters.
        • HO-6 policies protect condo owners.
        • HO-7 policies are for mobile or manufactured homes.
        • HO-8 policies are specifically for older homes.

        Knowing these distinctions will help you know what to look for.

        The more coverage you add to your policy, the higher the cost. You’ll need to weigh how much coverage to add without blowing your budget for the coverage. It may be nice to pay for an additional rider to insure your valuable sneaker collection, but is the extra annual cost worth it? Crunch the numbers to decide and prioritize how much optional coverage you can afford.

        What to look for in cheap homeowners insurance

        Cost and budget to replace your home

        First, calculate the cost of replacing your home in the event of a total loss. This is the amount it would cost to rebuild your home in the same location using similar materials to what you currently have at prevailing labor costs. This number could be vastly different than your home’s market value. A professional estimate can help if you’re unsure.

        Second, you need enough to cover your possessions. A rule of thumb is a dollar amount equal to 50 to 75 percent of what it would cost to replace the structure of your home. So, if you figure on a rebuilding cost of $250,000, you’ll want at least $125,000 to cover your belongings. Conducting a home inventory by listing important items and their values can help you arrive at a more exact number. Expensive possessions such as jewelry and fine art may require add-on coverage.

        Liability coverage

        You’ll need to think about liability — that is, what you’ll be responsible for if someone is hurt on your property. The minimum typically included in a standard policy is $100,000, but experts often recommend $300,000 to $500,000.

        Special situations

        Think about special situations, like where you would live if a disaster destroys your home. A standard policy may provide 20 percent of the cost to rebuild for you to use in this situation, but you may have an option to add coverage. Also consider whether your home is at risk for disasters not covered by standard home insurance, such as floods or earthquakes. In these cases, you’ll need separate policies to protect your home.

        Coverage level

        Even after you’ve determined a dollar amount for coverage, you’ll need to choose between three standard coverage levels for your home insurance policy:

        • Actual cash value: This is the least expensive level of home insurance because it factors in the depreciation of your home and belongings, paying for only what these things would be worth today.
        • Replacement cost: This type of home insurance doesn’t factor in depreciation, but payouts are subject to policy limits.
        • Guaranteed replacement cost: Like replacement-cost insurance, guaranteed replacement doesn’t factor in depreciation. However, it also allows you to exceed your policy limits, paying whatever it takes to replace your home and belongings. These policies are the most expensive and might be hard to find. Some insurers offer extended replacement cost policies instead. These typically pay up to 120 to 125 percent of your coverage amount.

        Actual cash value is the least expensive and guaranteed replacement is typically the most expensive.

        Cheap vs. general coverage

        No matter what kind of homeowners insurance policy you buy, there are some important things to consider. General home insurance is a much easier process than finding the cheapest home insurance provider. With cheap insurance coverage, you also have to worry about creating an inventory of all your belongings. This is obviously time-consuming, but it will be worth it.

        By getting a cheap plan and taking the time to itemize, you are making sure you’re not overpaying for your coverage. Although it does take more effort, finding cheap homeowners insurance coverage is usually the best option.

        Starting your search

        Now that you know what kinds of home insurance providers are out there, how much you need and how to save, it’s time to find a cheap home insurance company. Save time by starting your search online. Our streamlined quote tool can help you get multiple cheap home insurance quotes quickly and painlessly.

        Find the Best Home Insurance

        Save money on home insurance with our simple comparison tool.

        Matching you with providers.
        We found results in
        Click at least 2-3 companies to find the very best rate.

          How much does homeowners insurance cost?

          There are many variables that affect the cost of your homeowners insurance. They include past claims, the age and state of your home, policy limits and the state you live in. The same, basic homeowners insurance policy could vary dramatically from one state to another. There’s a good reason — some states are prone to more natural disasters, such as earthquakes, flooding, tornadoes and hurricanes. Other states may have higher claims of theft or other types of losses.

          The Insurance Information Institute (III) ranks Louisiana, followed by Florida, as the most expensive states for homeowners insurance. Annual premiums for these states average $1,968 and $1,951, respectively. If you look back at the recent flooding and hurricanes that have caused widespread damage, it would make sense that homes in the two states are the most expensive to insure.

          [Related: Average Home Insurance Costs]

          Utah and Idaho are the cheapest home insurance states at $692 and $730 in annual premiums. There’s a big difference in price just because of where you live. You could save almost $1,300 per year between the cheapest and most expensive state. If you live on the state line between Florida and Georgia, your home insurance could change by almost $700 depending on which side of the border your home is at — Georgia’s average home insurance cost is $1,267 per year.

          How to budget for home insurance

          There are things in life that need your priority. Home insurance should take precedence over dining out or travel. To maintain control of your spending, a budget is crucial. If you don’t have a budget yet, it’s time to create one. Make sure you include home insurance in your budget. Depending on how often you get paid, you may want to evaluate how best to divide the cost of home insurance. You may prefer to pay for it once per year using a work bonus. Or your budget may better handle a monthly premium payment.

          When it comes to purchasing home insurance based on a time frame of six months, one year or two years, it normally doesn’t affect the price. Go with a shorter time frame if you expect changes to your circumstances that could reduce your premium upon renewal, such as working on your credit score or making home improvements that could save you money on your premiums.

          We welcome your feedback on this article and would love to hear about your experience with the home insurance companies we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

          Methodology

          SimpleScore

          The SimpleScore is a proprietary scoring metric we use to objectively compare products and services at The Simple Dollar.
          For every review, our editorial team:

          • Identifies five measurable aspects to compare across each brand
          • Determines the rating criteria for each aspect score
          • Averages the five aspect scores to produce a single SimpleScore

          Here’s a breakdown of the five aspect scores and their rating criteria for our reviews on home insurance.

          Why do some brands have different SimpleScores on different pages?

          To ensure the SimpleScore is as helpful and accurate as possible, we developed unique criteria for every category we compare at The Simple Dollar. Since most brands offer a variety of financial solutions, their products and services will score differently depending on what we’re scoring on a given page.

          However, it’s also possible for the same product from the same brand to have multiple SimpleScores. For instance, if we compare State Farm’s home insurance according to our criteria for the best home insurance, it scores a 3.8 out of 5. But when we compare State Farm according to the criteria for the best auto insurance, it scores higher, since the features the company offers can vary by the type of insurance.

          Discounts

          We looked at the number of discounts each company offers – more discounts mean a higher score.

          Coverage Options

          We awarded higher scores to the companies that offer more coverage options.

          Support

          We awarded higher scores to companies with the most channels for customer support.

          Customer Satisfaction

          We leveraged the J.D. Power 2019 Home Insurance Satisfaction Study℠ to see how customers rated their experience with each company. (If a company wasn’t included in J.D. Power’s study, we skipped this aspect and averaged the four remaining aspect scores.)

          Accessibility

          We looked at the level of accessibility of each company – the more resources they have the higher their score

          Lauren Ward

          Contributing Writer

          Lauren Ward is a personal finance writer living in Virginia’s Blue Ridge Mountains with her husband and three children. In her spare time she enjoys board games and gardening.

          Reviewed by

          • Courtney Mihocik
            Courtney Mihocik

            Courtney Mihocik is an editor at The Simple Dollar who specializes in insurance, personal finance, and loans. Previously, she wrote and edited for Interest.com, PersonalLoans.org, Ballantyne Magazine, Thread Magazine, The Post, ACRN, The New Political, Columbus Alive and the Institute for International Journalism.