Your home is likely one of the most valuable investments you own, and it’s important to protect it with quality insurance. With the increase in natural disasters, it’s essential to have the proper coverage to prepare for potential damages.
To help you find the best homeowners insurance, we’ve assessed major insurance companies across the country.
Best Homeowners Insurance Companies
Here are the best homeowners insurance companies:
- American Family – Great for Extended Coverage for Dwellings
- Nationwide – Great for High-Value Homes
- USAA – Best for Military and Veterans
- Westfield – Best for Price
- Chubb – Best for High Liability Limits
- Erie – Great for Coverage Perks
- State Farm – Great for Bundling Auto and Home Insurance
- Farmers – Good for Extended Coverage for Dwellings
Summary: Homeowners Insurance Ratings
| COMPANY | FORBES ADVISOR RATING | COMPLAINT LEVEL | AVERAGE ANNUAL HOME INSURANCE COST FOR $350,000 IN DWELLING COVERAGE | LEARN MORE | ||||
|---|---|---|---|---|---|---|---|---|
 American Family | 5.0 | Very low | $1,251 | Compare Rates | ||||
 Nationwide | 5.0 | Very low | $1,309 | Compare Rates | ||||
 USAA* | 5.0 | Very low | $1,243 | Compare Rates | ||||
 Westfield | 5.0 | Very low | $1,164 | Compare Rates | ||||
 Chubb | 4.5 | Very low | $1,717 | Compare Rates | ||||
 Erie | 4.5 | Very low | $1,378 | Compare Rates | ||||
 State Farm | 4.5 | Very low | $1,475 | Compare Rates | ||||
 Farmers | 4.0 | Very low | $1,877 | Compare Rates | ||||
 Allstate | 3.5 | Very low | $1,313 | Compare Rates | ||||
 Auto-Owners | 3.5 | Very low | $1,645 | Compare Rates | ||||
| ProgressiveProgressive | 3.5 | Low | $746 | Compare Rates | ||||
 Country Financial | 3.0 | Very low | $2,283 | Compare Rates | ||||
 Shelter | 2.5 | Very low | $2,337 | Compare Rates | ||||
 Travelers | 1.5 | Very low | $2,404 | Compare Rates | ||||
| *USAA home insurance is open only to members of the military, veterans and their families. | ||||||||
How to Choose the Best Homeowners Insurance Policy
If you want to ensure your home and its contents are financially protected, it’s important to choose the right homeowners insurance policy. By doing so, you could save money and have peace of mind when it comes to filing a home insurance claim.
To get started, consider these tips for finding the best home insurance policy for your needs.
Determine How Much Coverage You Need
To ensure that you have adequate financial protection in case you need to file a home insurance claim, it’s essential to review each basic coverage type and adjust the amounts to fit your specific needs. Typically, dwelling coverage is the most crucial component of a home insurance policy. The amount you need for dwelling coverage should depend on the cost of rebuilding your home, based on local construction and material costs. However, it may be challenging to determine the right amount on your own, so you can ask your home insurance company for an estimate.
In addition, you may want to consider adding extra coverage such as extended or guaranteed replacement cost coverage, if available. Extended replacement cost coverage can provide an added financial cushion to your dwelling coverage if you need to rebuild your house due to an unexpected event like a fire. For example, your insurer may offer an additional 20% of dwelling coverage if your base amount is not enough to rebuild. Guaranteed replacement cost coverage, on the other hand, ensures that your policy will provide enough money to rebuild your home, no matter what the cost.
Contents coverage
Contents coverage is an important part of homeowners insurance that provides reimbursement for personal possessions that are stolen or damaged as per the terms of your policy. To ensure that you have enough coverage, it is advisable to create a home inventory that lists all of your personal belongings along with their estimated value. In addition to this, it may be worth considering purchasing “replacement cost” coverage, which will reimburse you for the cost of buying new items to replace your damaged or stolen ones. This is different from “actual cash value” coverage, which only pays out the depreciated value of your possessions.
Liability coverage
Liability insurance is an important part of your home insurance policy as it protects you from being sued for someone else’s injuries or property damage. It’s essential to make sure that you have enough liability coverage to cover the costs of a potential lawsuit. Your liability coverage should be based on the value of your assets and the risk of being sued.
Additional living expenses (ALE) coverage
ALE, or Additional Living Expenses coverage, is an important aspect of homeowners insurance that can help pay for extra costs if you’re forced to temporarily live somewhere else due to damage from a covered event. This coverage can also apply if you’re ordered to evacuate your home due to a potential disaster, such as a wildfire, even if your home is not damaged.
Most insurance companies offer ALE coverage as a percentage of your dwelling coverage, typically around 20%. However, it’s important to review your specific situation and consider purchasing additional coverage if necessary to ensure you have enough financial protection in case you need to rely on this coverage.
Compare Home Insurance Quotes
Once you have determined the amount of homeowners insurance that suits your needs, it’s time to compare quotes from various insurance companies to find the best and most affordable option. This process enables you to identify the cheapest homeowners insurance alternatives available. Since insurance companies charge varying rates for the same coverage, it is prudent to compare quotes from at least three different insurers.
You can obtain free homeowners insurance quotes either online or through an insurance agent. To obtain an online homeowners insurance quote, you can visit an insurance company’s website or use a website that offers multiple quotes simultaneously.
Alternatively, you can work with an insurance agent who can provide you with quotes from multiple companies. Independent insurance agents can give you quotes from various insurers, while captive insurance agents work exclusively with one insurance provider.
Get Home Insurance Discounts
Homeowners insurance companies provide a range of discounts that can help to lower your policy costs. Some of the most common home insurance discounts include:
- Claims-free discount: This is available to homeowners who have not filed a home insurance claim within the last few years.
- Disaster preparedness discount: This is given to homeowners who take measures to protect their homes against natural disasters, such as installing storm shutters and shatterproof glass in hurricane-prone areas.
- Employment, organization and association discounts: Depending on your insurer, your profession, interests or membership in certain organizations could lead to savings on your home insurance.
- Insurance payment discounts: You may be eligible for a discount if you pay your policy in full for each term or choose to go paperless.
- Multi-home discount: If you own multiple homes, you may be able to save money by bundling your policies with the same insurance company.
- Multi-policy discount (or bundling discount): By purchasing multiple policies from the same company – such as home, auto, renters, and even life insurance – you may be able to receive a discount.
- New or renovated home discount: Insurance companies view new or updated homes as lower risk, so they often offer discounts in these cases. Upgrading wiring or plumbing may be required to qualify for a renovated home discount.
- Roof age discount: A newer roof can reduce potential claims, so homeowners may be eligible for a discount if their roof is relatively new.
- Safety and security discounts: Fire safety devices like smoke alarms and sprinklers, as well as security devices like burglar alarms and deadbolts, can help protect your home and lead to home insurance discounts. It’s important to inform your insurer of any enhancements you’ve made so you can maximize your discounts.
Other Options for Building the Best Home Insurance Policy
Additionally, some other options to consider to build a policy that fills gaps in coverage are:
Increase liability coverage
Standard home insurance policies usually have liability limits of $100,000 to $300,000. But if you have significant assets to protect, consider increasing your liability coverage to at least $500,000 or $1 million. Umbrella insurance is another option to consider, as it provides additional liability coverage that can kick in once your home insurance liability limits are exhausted.
Consider additional living expenses coverage
While ALE coverage is typically included in a standard home insurance policy, the limits may not be sufficient to cover all your expenses if you’re displaced from your home for an extended period. Consider purchasing additional living expenses (ALE) coverage to cover expenses like temporary housing, food, and transportation if you need to temporarily relocate.
Take advantage of discounts
As mentioned earlier, discounts can be a great way to reduce your home insurance costs. In addition to the discounts listed above, some insurance companies also offer discounts for new homebuyers, non-smokers, and those with good credit scores. Be sure to ask your insurance company about all available discounts to see if you qualify for any.
Review and update your policy regularly
It’s important to review your policy regularly and update it if needed, especially if you make major home improvements or acquire valuable possessions. Keep your insurance company informed of any changes so that your policy remains up-to-date and provides the coverage you need.
Find the Best Homeowners Insurance in Your State
What Does Home Insurance Not Cover?
- A standard home insurance policy covers many common problems.
- Additional coverage options include scheduling high-value items and buying replacement cost coverage.
- Endorsements can be added to tailor the policy and fill in any coverage gaps.
- Some natural disasters such as floods and earthquakes are not covered by standard home insurance policies.
- The standard policy excludes coverage for a variety of problems including earth movement, water damage, power failure, neglect, war, nuclear hazard, intentional loss, and many others.
How Much Is Homeowners Insurance?
Home insurance costs an average of $1,582 a year for a typical policy with $350,000 in dwelling coverage, based on Forbes Advisor’s analysis of average home insurance costs. Here’s a look at average home insurance costs.
| Dwelling coverage amount | Average national cost per year |
|---|---|
| $200,000 | $1,117 |
| $350,000 | $1,582 |
| $500,000 | $2,090 |
| $750,000 | $2,950 |
| Source: Quadrant Information Services. Averages based on 14 large home insurance companie | |
What Factors Affect Homeowners Insurance Rates?
- The cost to rebuild the house is a significant factor.
- The materials that make up your house also matter.
- Distance to fire department and water source is important.
- Claims history in your area can impact the cost.
- Your personal claims history will also affect the price.
- The amount of coverage you choose plays a role.
- Your credit (if allowed in your state as a pricing factor) can also be a factor.
How to File a Homeowners Insurance Claim
Following the current step-by-step process for filing a home insurance claim can help you get paid promptly.
| Steps | What to do |
|---|---|
| Contact police, if necessary | File a police report if there’s a theft, burglary or vandalism, which you’ll need for a claim.. |
| Document the loss | Take photos and document the loss. Make a list of any items that were damaged or stolen. The insurance company will want to know specifics. |
| Stop further damage | Prevent more destruction to your home and belongings, such as boarding up a broken window or hole in the roof. Don’t fix the problem before contacting your insurance company. They may want to send an adjuster out to observe the damage. |
| Keep damaged items | Don’t throw away damaged items, like a rain-soaked chair, until it’s been documented by the insurance adjuster. |
| Notify your insurance company or agent | Contact your home insurance company or agent as soon as you can to report the loss. Fill out claims forms as completely as you can. |
| Meet with an adjuster if the insurance company requests it | The adjuster may ask you questions, review the damage and estimate how much you’re owed. |
| Consider a public adjuster for very large home insurance claims | If you have significant damage, you may want a public adjuster. The adjuster works on your behalf to help get your claim documented and submitted, and helps negotiate with the insurance company. A large claim can take many months to resolve, but a public adjuster can help you maximize your claim and keep the process moving. |
Cheapest companies for homeowners insurance
| Home insurance company | Average annual cost |
|---|---|
| Progressive | $901 |
| Westfield | $1,244 |
| USAA* | $1,478 |
| Allstate | $1,526 |
| American Family | $1,590 |
| Source: Quadrant Information Services, based on average of policies with $200,000, $350,000, $500,000 and $750,000 dwelling coverage.*USAA home insurance is open only to members of the military, veterans and their families. | |
Conclusion
The factors used to score home insurance companies for finding the best one include:
- Home insurance rates (50% of score)
- Complaints (20% of score)
- Availability of extended and/or guaranteed replacement cost coverage (20% of score)
- Banned dog lists (10% of score)
For home insurance rates, the average rates for different dwelling coverage amounts were considered. Complaints were based on those upheld by state insurance departments. Points were given to companies that offer extended or guaranteed replacement cost coverage, which is useful in the event of large disasters. Banned dog lists were also considered since they can make homeowners ineligible for coverage.
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