Our homes are the most expensive things most of us will ever own, so it stands to reason we should protect them. That’s where homeowners insurance comes in. With home insurance you can be financially protected if you experience a burglary, fire, hurricane, or other covered event that damages your home – along with your garage, any outbuildings, and fence – and possessions.

You’ll also have personal liability coverage if a visitor is injured, plus your extra living expenses will be reimbursed if your home is so damaged that you have to move out.

Similar to how some landlords require you to have renters insurance, your mortgage lender may require you to have homeowners insurance. However, even if you’re not required to buy a homeowners insurance policy it’s a good idea to do so. A homeowners insurance policy protects you from huge out-of-pocket costs in the event of a disaster.

While you may not think damage from a weather-related event would affect you or a thief would target your home, home insurance is one of the best ways to protect your assets from unforeseen incidents. It’s important to note that home insurance is different from a home warranty, which will pay to replace major household systems and appliances that break or wear out.

Below, we list our Best Homeowners Insurance Companies of 2021 to help you choose the one that’s right for you. We also introduce you to what homeowners insurance provides, how much it costs, how to buy it, and other things a homeowner needs to know to find the most appropriate insurance policy for your needs.

Happy family with two children having fun at new home. Young multiethnic parents with two sons in their new house with cardboard boxes. Smiling little boys sitting on floor with mother and dad.

(Ridofranz)

The Best Homeowners Insurance Companies of 2021

Any rates listed are for illustrative purposes only. You should contact the insurance company or insurance agent directly for applicable quotes.

Lemonade  »

Lemonade

Best Homeowners Insurance 2021

AM best rating
N/A

Online Tools
Online Estimate

Multi Policy Discount Available

Lemonade: Lemonade stands out in our rating for being almost entirely online. You can sign up, file claims, make changes to your policy, or even cancel your insurance either through its mobile app or its website. This can be a major upside for those who would rather file a claim online and not have to speak to an agent. And if there is a home-related emergency that leaves you without internet access, there is still a phone number you can call.

Lemonade provides the option of extra coverage without a deductible for high-value personal belongings such as jewelry, camera equipment, and musical equipment. It also prides itself on giving to charities through its Giveback program.

On the downside, Lemonade isn’t as widely available as other companies in our rating.

USAA  »

USAA

Caters to Military Families

AM best rating
A++

Online Tools
Online Estimate

Multi Policy Discount Available

USAA: USAA stands out in our rating for offering its services and policies primarily to members of the military, veterans, and their immediate family members. USAA is also one of the only companies in our rating to offer coverage in the event that you’re a victim of identity theft. Identity theft protection comes in the standard USAA policy, while most other companies in our rating offer it as an add-on.

Unlike many competitors, USAA offers homeowners insurance in every state. And if you’re looking to invest in a home security system, USAA has partnered with ADT to offer discounts for owners of its homeowner insurance policies.

Amica  »

Amica

Offers Dividend-Paying Policies

AM best rating
A+

Online Tools
Online Estimate

Multi Policy Discount Available

Amica: Amica offers rates competitive with other companies in our rating, also making our Cheapest Homeowners Insurance Companies of 2021 rating, and provides plenty of options for additional homeowners insurance coverage including add-ons for your laptop, home business, and identity theft.

Amica is the only home insurance provider in our rating to offer an insurance policy that provides dividends, meaning you get a percentage of your annual premiums returned to you. Amica also offers a type of all-in-one policy called Amica Platinum Choice that bundles a number of add-ons, such as its extended coverage for valuable items and water backup/sump pump overflow options, into one homeowners insurance policy.

Allstate  »

Allstate

Offers Extensive Coverage Options

AM best rating
A+

Online Tools
Online Estimate

Multi Policy Discount Available

Allstate: Allstate provides a wide variety of coverage options to round out its standard homeowners insurance policy. These options include relatively common ones like scheduled personal property coverage for high-value appraised items, but also less common coverage specifically geared towards sports equipment, musical instruments, and your yard and garden. Allstate will also pair you with a local agent when you become a customer to better tailor your coverage to meet your needs.

While Allstate is one of the more expensive homeowners insurance companies in our rating, it provides a number of discounts that may bring the cost of premiums down for you.

State Farm  »

State Farm

Adjusts Coverage to Inflation

AM best rating
A++

Online Tools
Online Estimate

Multi Policy Discount Available

State Farm: State Farm is one of the few companies in our rating that offers homeowners insurance policies in all 50 states. Its standard policy is competitive with other companies in our rating. It also offers a variety of less-common discounts like a discount for installing an impact-resistant roof. Some of the available policy options include coverage for identity theft and sewer backups.

State Farm has an extensive network of 20,000 insurance agents in the U.S. If you’re more comfortable purchasing insurance from a local agent, you should be able to find one close to you.

Nationwide  »

Nationwide

AM best rating
A+

Online Tools
Online Estimate

Multi Policy Discount Available

Nationwide: Available in all but three states, Nationwide’s standard policy includes coverage for credit or debit card fraud and rebuilding your home to current code in the event of a covered disaster. It also provides what it calls the Brand New Belongings benefit, where you will be reimbursed for both the depreciated value of covered belongings and the additional cost to purchase new items.

There are several options that can be added to your homeowners policy such as Replacement Cost, which pays for the full replacement cost of a covered item, rather than its depreciated value, and identity theft coverage.

American Family: American Family puts a strong emphasis on its local agents. In addition to its standard policy, American Family provides options for coverages like matching side, which means if part of the side of your home is damaged, American Family will cover the replacement of the undamaged siding so that it all matches. Also available is equipment breakdown coverage that will cover some of your appliances, computers, smart components, and systems in the event that they are damaged due to mechanical failure, or an electrical or pressure system event.

Homeowners insurance policies from American Family are available in fewer than half the states in the U.S.

Erie Insurance  »

Erie Insurance

Cheapest Homeowners Insurance 2021

AM best rating
A+

Online Tools
Agent only

Multi Policy Discount Available

Erie Insurance: Erie Insurance is one of the few that offers guaranteed replacement cost in its standard policy, whereas many other providers may only offer this as an option or not at all. Some of the other options include coverage in case of a water backup or sump pump overflow and coverage from your house to the curb for underground utility lines. Erie is also No. 1 in our rating of the Cheapest Homeowners Insurance Companies of 2021.

One of the big downsides to Erie Insurance is that it isn’t as widely available as many of the companies in our rating are. Erie homeowners insurance policies are available in fewer than half the states in the U.S.

Liberty Mutual: One of the least expensive homeowners insurance companies in our rating, Liberty Mutual offers homeowners insurance policies in every state but Wyoming. Liberty Mutual has a standard policy competitive with other companies in our rating and offers a wide variety of policy add-ons. These include replacement cost, which reimburses the actual cost of replacing a covered item rather than just its depreciated value, and an option to adjust your coverage limits to keep pace with inflation.

Chubb  »

Chubb

AM best rating
A++

Online Tools
Agent only

Multi Policy Discount Available

Chubb: Chubb’s standard policy is called Masterpiece Homeowners Insurance, which includes coverage such as replacement cost and water backup. Chubb, in partnership with Wildfire Defense Systems (WDS), even offers a no-cost option where WDS will provide a wildfire hazard assessment and maybe even help you prepare for evacuation, arrange temporary living accommodations, or help you clean up your property after a wildfire.

Homeowners insurance policies from Chubb are only available through its own agents.

Progressive  »

Progressive

AM best rating
A+

Online Tools
Online Estimate

Multi Policy Discount Available

Progressive: Unlike the other companies in our rating, Progressive acts more like an insurance broker, selling policies that are then administered by other insurance companies. This means that when it comes to filing a claim, you won’t necessarily be working with Progressive itself, although Progressive may be the first contact. This allows Progressive to provide you with a wide range of coverage options and quotes to help find a policy best suited to your needs.

This business model allows Progressive to provide you with a wide range of coverage options and quotes to help find a policy best suited to your needs. Progressive is available in all but two states, Florida and Iowa.

Farmers Insurance: Farmers Insurance has three different tiers of homeowners insurance, each higher tier increases both the coverage limits and provides more features. All three policy tiers offer features like claim forgiveness (where if you haven’t filed claims for a certain period of time your premiums won’t increase after filing a new claim), deductibles that decline the longer your policy with Farmers is active, and a discount if you’ve gone a certain period of time without filing a claim. The top-tier Premier policy includes Guaranteed Replacement Cost, though there are certain conditions for this policy.

Our Cheapest Homeowners Insurance Companies are based on prices for a sample policy. The policy was for a 2,400 square foot townhouse in Illinois with a price of $450,000 and a deductible of $1,000. Based on those prices we chose the least expensive companies in our rating for this list.

Most Affordable Homeowners Insurance Companies of 2021

Any rates listed are for illustrative purposes only. You should contact the insurance company or insurance agent directly for applicable quotes.

It is often possible to reduce your overall insurance costs by purchasing both your homeowners and auto insurance policy from the same company. This is called bundling. Visit our Best Home and Auto Insurance Bundles of 2021 page for more information.

Best Home and Auto Insurance Bundles of 2021

While home insurance may seem complicated and overwhelming, it’s actually fairly straightforward to choose the best home insurance company and the right insurance policy for you. First, you’ll need to determine the value of your home and its contents, and then select a company and policy that provides the coverage options you need at a reasonable price.

Take the following steps to purchase homeowners insurance:

1. Decide what you want to insure. A standard homeowners insurance policy may not cover valuable jewelry, artwork, or other collectibles. Likewise, if you have a trampoline, pool, or something else on your property that raises your liability risk because it poses an increased risk of injury or death to others, you may need additional coverage. And if your area is flood-prone, you’ll probably need a separate policy for flood insurance from your home insurance company or the National Flood Insurance Program.

Similarly, if you live in an earthquake-prone region, you will need additional insurance to cover related damage. Use the U.S. Geological Survey’s fault map to find out how close you live to a fault line and better understand your risk of an earthquake.

2. Determine how much home insurance you need. Take an inventory of all of your personal belongings. If you have receipts, file them away. Use this information to decide how much coverage you need for your property.

For your home and other structures on your property, get an estimate from your insurance company or a realtor for the average rebuilding cost in your area per square foot.

Determine how much you might spend on a hotel, meals out, and other living expenses if your home was destroyed or became uninhabitable after a loss. The Insurance Information Institute can help walk you through the process, as can a licensed insurance agent or realtor.

3. Choose an insurance company. To choose the right homeowners insurance company, you will want to find an insurer that sells policies with the coverage and other features you need at an affordable price. In addition, look for a company that has a high financial strength rating from AM Best or another rating agency, gets good consumer and professional reviews, and allows you to file a claim or seek assistance 24/7.

4. Choose a policy. The right home insurance policy will provide sufficient coverage, have terms that are easy to understand, and may even offer discounts. Consider purchasing a replacement cost policy that will reimburse you for the cost of replacing your property with new items, rather than a cash value policy that only pays the depreciated value.

Many insurance companies will give you a discount if you buy more than one type of insurance policy from them – for example, home insurance and auto insurance. This is called insurance bundling or a multi-policy discount. Most insurance companies will offer discounts if you bundle two or more policies together compared to paying for each policy individually. This is worth it to the insurance company because it generates more revenue per customer and helps promote customer loyalty.

However, insurance bundling doesn’t always save money. In some cases, an insurance company that for example offers only auto insurance may offer lower rates than companies that sell several different types of policies, according to Amy Bach of the consumer advocacy group United Policyholders. Bach says that a company that offers only auto insurance may also offer benefits not available in an insurance bundle from another insurer, such as ticket forgiveness or claims-free discounts.

The first step in buying homeowners insurance is to determine how much insurance coverage you need. To estimate the coverage you need, take a home inventory. A home inventory is an inventory of all of your personal property both inside and outside your home. Calculate the cost to rebuild your home after a disaster (ask a real estate agent for building costs in your area). Determine if you need additional coverage for earthquakes, floods, or a high-risk item like a swimming pool.

If you have trouble determining how much home insurance you need, the Insurance Information Institute can help walk you through the process, as can a licensed insurance agent or realtor.

Next, decide if you want replacement cost coverage or actual cash value coverage. A replacement cost policy will pay to replace your personal property with new equivalent items, whereas an actual cash value policy factors in depreciation – in other words, what your personal belongings are worth used. For things like electronics that depreciate quickly, an actual cash value policy could leave you well short when it comes to buying new items.

In addition, a replacement cost policy will provide enough insurance money to rebuild your home even if building costs rise. As a result, most insurance experts recommend a replacement cost policy, even though premiums are somewhat higher.

Then narrow down your search to several home insurance providers. Once you have chosen a few companies, use the estimate tool on their websites to get an idea of how much it will cost for the coverage you need. It can be helpful to talk to an agent in person or over the phone at this point for additional help. Get quotes from several companies, but be sure to compare policies that offer similar coverages.

When you are ready to purchase your homeowners insurance, depending on the company, you can buy a policy through the insurers’ website, over the phone, or through an independent or dedicated local insurance agent.

Some home insurance companies may require a home inspection to confirm the condition of your home and ensure you have adequate coverage. If a home inspection is required, the insurance company will send an inspector to your home.

Due to COVID-19, many insurance companies have updated their inspection process to follow safety precautions, including wearing PPE and social distancing. Some inspections will not require you to be present and the inspector will focus on the exterior of your home, including the roof, and any potential hazards in your yard that could cause damage to your home in the case of a severe storm.

However, some companies are still completing interior inspections focusing on the condition of your home’s electrical systems, ventilation, fireplace, plumbing, heating, and air conditioning systems. When purchasing home insurance, check the requirements of the insurer you are considering to determine their home inspection practices.

To file a homeowners insurance claim:

1. File a police report if needed. If there’s been a crime, you will need to file a police report promptly and note who you speak with.
2. Notify your insurance company. Your insurer needs to be notified promptly as well, either online or over the phone, depending on company policy. This will facilitate your claim and help ensure that you’re compensated promptly.
3. Make any urgent repairs. Make any repairs to your home that are urgent, assuming you can do so safely. Photograph the damage before you start, and keep receipts for any materials you purchase.
4. Document the claim. Document all damage, stolen items, and anything else that will form the basis of the claim. Take lots of photos or a video detailing the damage, going room to room if necessary. If you have security cameras, collect and share all footage with your insurance provider.

What Is Homeowners Insurance?

Homeowners insurance is a type of insurance policy that provides financial protection in the event something happens to your home or your belongings. A policy will specifically name what structures and items are covered, to what amount, in what circumstances, and how much you will have to pay before the insurance policy starts paying you (this is called a deductible).

For example, a policy might state that your home is covered in the event of damage from a fire up to $300,000 with a $1,000 deductible. This means that if your home is destroyed in a fire after you pay the $1,000 deductible. the insurance company will pay you up to $300,000 to repair or reconstruct your home.

Most standard policies will also cover your personal belongings up to a preset limit, provide some liability coverage in case you are sued if someone is injured on your property, and provide loss-of-use coverage. Loss-of-use coverage reimburses you you can’t stay in your home due to a covered event and must find a hotel. Loss-of-use coverage reimburses you when you can’t stay in your home and must find a hotel due to a covered event.

Do I Need Homeowners Insurance?

Most homeowners should purchase home insurance even if it isn’t required by their mortgage lender. Many mortgage lenders will require you to get homeowners insurance to financially protect themselves, but home insurance is also among one of the best ways to protect your largest investment: your home.

Even if you can afford to rebuild or replace all of your possessions in the event that your house is destroyed or robbed, homeowners insurance is an inexpensive way to avoid having to pay the huge out-of-pocket expense.

What Does Homeowners Insurance Cover?

Homeowners insurance covers your assets in the case of unforeseen events. A homeowners policy will pay to repair or rebuild your home or outbuildings, like a garage, if something unfortunate or even catastrophic happens to it, such as theft, vandalism, storm damage, water damage, or fire. Your policy will also cover your personal possessions that are stored in your home or on your property, such as clothing and furniture.

Insurance will also provide liability coverage if a guest is injured on your property. Coverage includes paying their medical expenses and your legal fees if they sue you. Finally, home insurance can even cover items like a swimming pool that increase a homeowner’s liability risk or high-value items like fine jewelry, although these often require a higher premium to insure.

When purchasing an insurance policy, you should speak to an insurance professional from the company to ensure that you receive a policy that meets your specific needs at the best possible price.

How Much Does a Homeowners Insurance Policy Cost?

For the companies in our rating from which we were able to obtain quotes for our sample policy, the monthly premiums ranged from just under $100 for a policy with Erie Insurance to almost $170 for a policy with Allstate. There are a number of variables involved in getting homeowners insurance quotes such as the location of your home, square footage, and amount of coverage offered. For more information on quotes visit our guide to Homeowners Insurance Quotes.

Does Homeowners Insurance Cover Damage From Flooding?

In general standard homeowners insurance policies don’t cover flooding. For information on whether or not your home is at risk for flooding, you can look up your home’s location on the FEMA Flood Map Service Center’s website.

Does Homeowners Insurance Cover Damage From Fire?

Most homeowners insurance policies will cover your home in the case of fire damage. This coverage generally extends to damage caused by wildfires. If you live in an area with a high risk of wildfires you will want to review your coverage.

If you’re unsure if your home is at risk from wildfires, you can look it up on the Wildfire Risk to Communities website. This resource was developed by the USDA Forest Service.

Does Homeowners Insurance Cover Earthquake Damage?

Damage from earthquakes is typically not covered by a standard homeowners insurance policy. To cover damage resulting from an earthquake, you need a separate policy. Several companies in our rating, including some of our top-rated companies, like Lemonade and Amica offer earthquake policies, although Lemonade only offers earthquake insurance in California.

Does Homeowners Insurance Cover Storm Damage?

The answer to this will depend on both your specific policy and how the damage was incurred. In general, damage from lightning, hail, and wind will be covered by a standard policy. However, if the damage is from flooding as a result of a storm (think the storm surge in a hurricane) then it will likely not be covered by a standard policy and would be covered by a flood insurance policy instead.

Learn More

For more information on Homeowners Insurance please visit our other guides:

Homeowners Insurance Companies

Other Ratings From 360 Reviews

The following describes our 360 approach to researching and analyzing homeowners insurance companies to provide guidance to prospective consumers.

1. We researched the companies and products people care most about.

U.S. News analyzed and compared a variety of publicly available data, including internet search data, to determine which homeowners insurance brands Americans are most interested in. We found 24 companies that stood out for further evaluation using the volume of searches and research among consumers, as well as across the different rating sources. Once we identified these companies, we reviewed the companies’ available homeowners insurance features offered at the time of publication. After conducting a thorough analysis, we were able to condense the initial list to the 12 overall Best Homeowners Insurance Companies.

We compared available coverages from top homeowners insurance companies across several criteria, including cost, coverage limits, policy features and availability. Research shows that these criteria are among the most important considerations to people shopping for homeowners insurance. We compared cost across different companies using an archetype that, as much as possible, represents a standard American home: a 2,400 sq. ft. townhome in Naperville, Illinois, with an estimated market value of $450,000, equipped with a home security system and fire alarms, belonging to a non-smoking, four-person family with no pets. We built a standard plan that includes coverage for the home itself, personal property, personal liability, loss of use/additional living expenses and guest medical protection, with a $1,000 deductible and comparable coverage amounts.

2. We created objective 360 Overall Ratings based on an analysis of third-party reviews.

Our scoring methodology is based on a composite analysis of the ratings and reviews published by credible third-party professional and consumer review sources. The ratings are not based on the personal opinions, tests or experiences of U.S. News. To calculate the ratings:

(a) We compiled two types of third-party ratings and reviews:

  • Professional Ratings and Reviews: Many independent homeowners insurance evaluating sources have published their assessments of homeowners insurance companies and products online. We consider several of these third-party reviews to be reputable and well-researched. However, professional reviewers often make recommendations that contradict one another. Rather than relying on a single source, U.S. News believes consumers benefit most when these opinions and recommendations are considered and analyzed collectively with an objective, consensus-based methodology.
  • Consumer Ratings and Reviews: U.S. News also reviewed published consumer ratings and reviews of homeowners insurance providers. Sources with a sufficient number of quality consumer ratings and reviews were included in our scoring model.

Please note that not all professional and consumer rating sources met our criteria for objectivity. Therefore, some sources were excluded from our model.

(b) We standardized the inputs to create a common scale.

The third-party review source data were collected in a variety of forms, including ratings, recommendations and accolades. Before including each third-party data point into our scoring equation, we had to standardize it so that it could be compared accurately with data points from other review sources. We used the scoring methodology described below to convert these systems to a comparable scale.

The 360 scoring process first converted each third-party rating into a common 0 to 5 scale. To balance the distribution of scores within each source’s scale, we used a standard deviation (or Z-Score) calculation to determine how each company that a source rated was scored in comparison to the source’s mean score. We then used the Z-Score to create a standardized U.S. News score using the method outlined below:

  • Calculating the Z-Score: The Z-Score represents a data point’s relation to the mean measurement of the data set. The Z-Score is negative when the data point is below the mean and positive when it’s above the mean; a Z-Score of 0 means it’s equal to the mean. To determine the Z-Score for each third-party rating of a company, we calculated the mean of the ratings across all companies evaluated by that third-party source. We then subtracted the company’s rating from the mean and divided it by the standard deviation to produce the Z-Score.
  • Calculating the T-Score: We used a T-Score calculation to convert the Z-Score to a 0-100 scale by multiplying the Z-Score by 10. To ensure that the mean was equal across all data points, we added our desired scoring mean (between 0 and 10) to the T-Score to create an adjusted T-Score.
  • Calculating the common-scale rating: We divided the adjusted T-Score, which is on a 100-point scale, by 20 to convert the third-party rating to a common 0-5 point system.

(c) We calculated the 360 Overall Score based on a weighted-average model.

We assigned “source weights” to each source used in the consensus scoring model based on our assessment of how much the source is trusted and recognized by consumers and how much its published review process indicates that it is both comprehensive and editorially independent. The source weights are assigned on a 1-5 scale. Any source with an assigned weight less than 2 was excluded from the consensus scoring model.

Finally, we combined the converted third-party data points using a weighted average formula based on source weight. This formula calculated the consensus score for each product, which we call the 360 Overall Rating.

U.S. News 360 Reviews takes an unbiased approach to our recommendations. When you use our links to buy products, we may earn a commission but that in no way affects our editorial independence.

Topics #Companies #Guide #Homeowners #Insurance