A home is almost always the largest purchase a person can make in their lifetime. It is also an asset that, with proper care, will not only maintain its value but will increase in value. Because of the size of the purchase and potential resale value, homeowners insurance is a necessity for any homeowner but it is often difficult to know which of the best home insurance companies to purchase insurance from.
This article compares 10 of the best home insurance companies in order to provide the answer. Using this guide, a homeowner can discover the best fit for their home insurance needs
What We Reviewed
Allstate is one of the largest insurance companies in the nation and the offer a variety of other insurances besides home insurance, including life and automotive.
Their website offers a variety of helpful tools, including the Allstate Digital Locker app which is a free smartphone app that allows for the creation of a quick and easy inventory of household items.
Considered by many to be a great choice for new homeowners, they have an A+ Strength rating from A.M. Best Financial and offer a variety of different endorsements for extra coverage specific to homeowners need, including coverage of expensive hobby and sports equipment.
Even with these endorsements, there are some large gaps in their coverage for things like earthquakes and theft of other property such as boats and vehicles.
Of all the best home insurance companies, Allstate offers the greatest number of discounts, including a two-year discount for new homeowners as well as the standard discounts, like a smoke alarm discount and a deadbolt lock discount.
Amica Insurance is known for their excellent customer service and their strong discount offerings, almost as many as Allstate, including discounts for paperless billing and long-term customers. Consumer Reports and J.D. Power give Amica top marks across the board.
Amica is a mutual company owned by the policyholders themselves instead of investors. Because of this status, they offer divided payments that average between 5 and 20% of their annual premiums depending on Amica’s profits for the year.
With their diverse discounts and paid dividend to policyholders, Amica offers a great deal of value for its consumers, though Allstate still beats it for new homeowner discounts.
Of all the best home insurance companies, State Farm offers the most customizable and detailed online quote, though given its detail, it is best to have as much information as possible before filling in the quote information. They have a 24/7 claim processing system and a robust set of online tools and tips, including video tutorials.
On the downside, they offer too few discounts, though with their extensive online quote engine, their coverage is often better attuned to the policyholder’s exact needs than the coverage of many other providers.
The lack of discounts can result in a high quote, though with their detailed questionnaire, discounts might be unnecessary in order to get the best value on a State Farm policy.
Nationwide provides the greatest amount of endorsements for optional additional coverage than any of the other best home insurance companies allowing for a more tailored insurance policy.
Their Brand New Belonging coverage reimburses the policyholder for the price to purchase a new destroyed or stolen item instead of the depreciated cost based on the item’s resale value. This makes replacing an item much easier.
On the downside, the extras Nationwide offer come with more expensive premiums than many of the other best home insurance companies on the list.
With its more expensive premiums, Nationwide does not seem like a great value but the extent of their coverage and customer service is more than worth the cost.
MetLife’s standard coverage comes with guaranteed replacement cost coverage that includes both the structure and the belongings. As with Nationwide’s Brand New Belongings coverage, this guarantees the policyholder the replacement cost as opposed to the actual value. For homeowners that have a lot of property that depreciates, this could be key.
MetLife’s website is not as robust as some of the other best home insurance companies on the list, but their customer service is top-notch with timely payouts and excellent claim-filing experiences.
MetLife offers a strong variety of discounts, although nowhere near as many as some of the other providers on the list offer.
Travelers might be the best choice for those living an environmentally sustainable lifestyle with a wide variety of discounts for ‘green homes’ that favor energy-saving design. Their policies offer content replacement cost coverage as well as valuable items plus coverage that grantees replacement of expensive items like musical instruments and jewelry.
Their financial strength is robust so their ability to back policies is second to none. That said, they get more complaints about claims handling than most of the other best home insurance companies on the list.
With their large number of ‘green home’ discounts, Travelers offers a great value for environmentally minded homeowners.
Safeco values simplicity more than any of the other best home insurance companies on the list. If the homeowner also uses Safeco for their auto insurance, they are eligible for a Single Loss Deductible in cases where both the home and the car are damaged in the same event.
They also offer equipment breakdown coverage that pays the replacement cost for any appliance that breaks down beyond repair.
On the negative side, they do not offer online payments or purchase of policies. Of all the best home insurance companies on the list, they offer the fewest discounts, only four.
While they lack discounts, Safeco’s Single Loss deductible can add value to their policies for policyholders with more than one type of insurance through Safeco.
Progressive’s policies offer a high number of endorsements to allow for personalized coverage, often at no extra cost. With their large number of online tools, it is easy to get a quote or change the policy as needed. As an auto insurance company, they offer policy bundling that can save policyholders who have multiple policies with them a great deal of money.
They lack many of the discounts that some of the other best home insurance companies on the list offer, but its coverage is comprehensive, with its standard policy covering many potential disasters that others charge extra for.
Despite their lack of discounts, with bundling and their strong level of coverage, they offer a lot of value to their policyholders.
USAA Property & Casualty
USAA is considered the gold standard of insurance among all insurers reviewed by J.D. Power and Consumer Reports. They offer many different insurances as well as banking services and the customer satisfaction cannot be beaten. They also offer replacement cost coverage for damaged or stolen items.
All of these positives come with a large downside. USAA is only available to members of the military and their families. For active duty military members, they offer military uniform coverage that replaces damaged or stolen military uniforms with no deductible.
With substantial discounts and bundling as well as banking options, USAA is a great value for those that qualify for its coverage.
Erie Insurance Group
Erie Insurance Group offers a great value with a few extra perks, like guaranteed replacement cost and coverage for animals up to $500. They offer a great deal of customization in their policies such as firearm coverage and identity theft recovery.
Erie Insurance Group’s premiums tend to be lower than some of the other best home insurance companies on the list with significant discounts.
Best Home Insurance Companies FAQ
1. What is Home Insurance
Home insurance covers private residences such as single-family homes, condominiums, and apartments from losses from damage and destruction as well as theft. These policies generally cover the home itself as well as personal property in the home or on the property.
The extent of coverage varies by provider and some providers offer multiple policies that cover not only the home but automobiles, boats, and even personal airplanes.
Home insurance is sold in policies by the insurance provider. The homeowner pays a premium in monthly, quarterly, or annual installments to receive the insurance coverage. In the event of a claim on their policy, the insurance company pays for the value of the item minus the deductible that the policyholder must pay themselves.
Several of the best home insurance companies on the list below offer item replacement costs instead of value replacement. With these policies, the insurance provider will pay generally pay the higher replacement cost for destroyed or stolen items.
2. What Does Home Insurance Cost
Like most other insurance, the cost of home insurance varies greatly depending on a multitude of factors. The value of the home and items play a major role in determining price, but it also varies by region.
This is due to the variable risks involved in different regions. Several companies offer coverage of volcanic activity, for example, but this coverage would cost more in a state like Hawaii which has the most active volcano in the country than Oklahoma where there are no volcanos at all.
Many of the best home insurance companies on the list also offer endorsements which are additional customizable coverage for a specific type of property or home additions. This can include coverage for expensive items like musical instruments or pools, sheds, and gazebos.
Most of these endorsements come with extra costs but many of them are offered at no extra costs. For those customers who desire specific endorsements, getting multiple quotes from different companies would be advisable.
3. What Home Insurance Covers
With their standard coverage, almost all of the best home insurance companies in the list below cover the standard perils of fire, lightning, hail, windstorms, vandalism, smoke, vehicle collision, and riots. Many companies offer more protection that includes burglary, ice, and snow damage, falling tree damage and accidental water damage.
Above and beyond these basic and extended coverages there are also options for “all risks” coverage of specific types of disasters, both natural and man-made. These can include flood, earthquake, volcano and even war or nuclear hazard.
Most of these types of coverages are limited to areas where those specific damages are more common such as earthquake insurance in California or nuclear hazard insurance for homes near nuclear power plants. These come at a higher premium than standard insurance but can be worth the extra price if the risk is great.
4. What Is the Difference Between Open Peril and Named Peril Coverage
Generally, home insurance comes in ‘open peril’ or ‘named peril’ coverage. Named peril coverage only covers the basic named listed above while open peril coverage covers the extended list of perils, generally excluding all risk perils like earthquake and flood coverage.
Open peril coverage is more expensive but offers a greater level of coverage, protecting the homeowner from more types of damage.
5. Important Problems Home Insurance Does Not Cover
One of the most contentious types of home insurance is flood insurance. Most private insurance companies do not offer any protections for floods. In certain places of the country, floods are so common that private insurance companies could not offer flood coverage without bankrupting themselves every time it floods.
Areas in floodplains, where hurricanes are common, or near large rivers, are areas where no private flood insurance is available.
Due to the lack of private flood insurance, the federal government created the National Flood Insurance Program in 1968. The NFIP provides separate flood insurance for those living in high-risk zones and should be purchased by those at-risk homeowners.
How We Reviewed
The following 10 best home insurance companies were reviewed based on the following parameters: features, pros & cons and price. With features, we looked at the types of coverage as well as the convenience factors like 24/7 claims service and the availability of an online quote tool.
The companies’ other available insurance types, like automotive, boat, or even life insurance factor into the price, as many of these companies offer discounts for those who hold multiple types of insurance with them.
Another important factor in choosing between the best home insurance companies is their financial strength. An insurance company’s financial strength is basically its credit ranking. And a weak score could lead to issues with the payout from the company.
This is less important with respect to day-to-day home insurance issues, but a large natural disaster could bankrupt a weaker insurance company, leaving the homeowner without payment for the damages they suffer.
Overall Price Range
Due tothe nature of home insurance, it is difficult to provide a specific price for each of the following 10 best home insurance companies. The rates will differ from house to house based on the perceived risks associated with the house, neighborhood, or region of each insured home.
Instead of providing price quotes in the price section we looked at the number and size of available discounts provided by each of the best home insurance companies.
Best Home Insurance Companies: The Verdict
All the above list of the best home insurance companies provide comprehensive insurance though some are better for different types of homeowners. If you qualify, USAA should be the top choice but for those that cannot purchase it.
For new homeowners, Allstate offers the highest discount rates tailored to the new homeowner.
Nationwide offers the greatest number of endorsements for customizable coverage and Travelers, with their green home discounts, could offer the best value for the environmentally conscious.
With all others, shopping around and getting multiple quotes would likely bring the most value for your homeowner’s policy.