GEICO Home Insurance Review

GEICO doesn’t offer homeowners insurance directly, but consumers seem pretty happy with the policies they get anyway.

GEICO relies on a partner network to underwrite its homeowners insurance policies, rather than doing it itself. In some ways, this is inconvenient, because when you need to file a claim or get a question answered, GEICO isn’t much help. You have to contact the policy underwriter directly.

But customer satisfaction surveys suggest this isn’t actually a big issue. GEICO customers are largely satisfied with the policies they receive through the partner insurers, especially when it comes to price. Policies purchased through GEICO consistently offer affordable rates, so if this is your primary concern in purchasing home insurance, GEICO is worth considering.

The Specs

The Claim

GEICO promises homeowners “top-quality coverage at an affordable rate.” It offers broad protection for all types of homes, including condos and mobile homes, and prompt customer service to assist you with questions or filing a claim.

Is it True?

Sort of. You may be able to get affordable homeowners insurance from a GEICO agent, but it won’t be a GEICO policy. GEICO doesn’t underwrite home insurance policies, but relies exclusively on a partner network. When you get a quote through GEICO, it pairs you up with one of its partners and you get the price and policy options offered by that insurer. If you need to file a claim, GEICO’s claims center won’t be much help to you. It just provides you with the contact information for your policy underwriter and directs you to speak to them.

That being said, people seem to be pretty happy with the policies they get through GEICO’s network. GEICO ranked fifth in overall satisfaction in J.D. Power’s 2015 homeowners insurance survey. Customers were particularly happy with the premium rates, suggesting that GEICO’s claim of providing affordable insurance holds true. However, consumers weren’t thrilled with its customer service. This is likely due in part to people contacting GEICO for assistance and being directed to their homeowners insurance underwriter instead.

Our Deep Dive

Because GEICO doesn’t offer its own home insurance policies, it’s not possible to discuss the specific coverages, endorsements, and discounts available. These vary depending on which partner company underwrites the policy.

Before committing to a purchase through GEICO, it’s a good idea to do some research into the company you’d actually be buying the policy from. At the least, investigate its financial strength ratings. These give you a good indication of how likely it is that the company will be able to pay out claims when the time comes. A low ranking could mean you’ll end up paying a lot in premiums to see no return when you need it.

Cost Rundown

As with all insurance products, homeowners insurance premiums depend on a variety of factors. These include the age and size of your home, its location, and your creditworthiness. Every company weighs these factors a little differently, so the only way to estimate how much it’s going to cost you is to get a quote.

Rates also depend on what level of coverage you get. All homeowners policies protect against the following perils:

• Fire or lightning
• Windstorm or hail
• Explosion
• Riot or civil commotion
• Damage caused by aircraft
• Damage caused by vehicles
• Smoke damage
• Vandalism
• Theft
• Volcanic eruption

More comprehensive policies are available, but obviously, the greater the level of protection, the higher your premium. If you live in an area prone to earthquakes or floods, you’ll have to purchase separate coverage for these hazards as well, since they’re not included in a traditional homeowners policy. You also have the option to add endorsements. These provide extra coverage for valuables, such as jewelry or firearms.

Cheaper (or Free!) Alternatives

Lenders require you to purchase homeowners insurance, so there’s no getting around it. But there are a few things you can do to lower your rates:

• Shop around. Compare rates from several companies to see who offers you the most protection for the best price.
• Bundle your home and auto. Most insurers give discounts to customers who purchase their home and auto insurance together.
• Choose a high deductible. If you can afford it, a high deductible is a better option. Your out-of-pocket costs will be higher when you file a claim, but the lower premiums will make up for that.
• Improve your credit. A high credit score tells lenders you’re less of a risk to insure.
• Prepare your home for disasters. Do what you can to disaster-proof your home. For example, if you live in an area known for bad storms, install storm shutters for doors and windows.
• Beef up security. Having an alarm system in place can help deter would-be thieves and earn you a discount on your homeowners insurance.

The Competition

• State Farm: State Farm offers coverage for most major perils, including theft, fire, and storms. It offers discounts for homes with fire or burglar alarms installed and those that use certain kinds of roofing materials. Bundling your home and auto will earn you additional savings as well. State Farm received an average rating in J.D. Power’s customer satisfaction survey. Consumers were pleased with its policy offerings and their customer service, but not as impressed with its rates.
• Progressive: Like GEICO, Progressive doesn’t underwrite its own homeowners insurance, so once you’ve purchased a policy, you deal exclusively with Progressive’s partner. Based on J.D. Power’s survey, customers are less satisfied with policies bought through Progressive than those purchased through GEICO. Progressive may be worth considering, though, if you want to add special coverages to your policy. It offers a huge selection of endorsements for your home and personal property, including watercraft, jewelry, and computers.
• Allstate: Allstate has one of the largest selection of homeowners discounts in the industry, but customers aren’t thrilled with their premiums. Allstate received an average rating from J.D. Power. It has a good selection of policy coverages and endorsements, though, so it’s easy to build a policy around your needs. Allstate also offers Claim RateGuard as an optional add-on. This is pretty unique among home insurance providers and functions like accident forgiveness for your home. You won’t have to worry about your rates going up after your first claim.

What Others Are Saying

• The Washington Post explains GEICO’s exit from the homeowners insurance business in 1995. At that time, home insurance only made up a small percentage of GEICO’s business. A representative for the company stated that “we find it harder to find economies of scale in writing and servicing the business.”

The Bottom Line

GEICO may not write its own homeowners policies, but customer satisfaction reports indicate it’s still living up to its promises of providing quality, affordable home insurance — it’s just through partner companies. It’s not a bad idea to do some investigating into your policy’s underwriter before committing to a purchase, though.