Home insurance isn’t one size fits all, which is why it’s important to consider quotes from a few companies. We studied the top 100 home insurance companies in the U.S. based on four categories: market share, complaint index, A.M. Best rating and J.D. Power rating.
We chose the top five stand-out companies, so we have you covered whether you're looking for the best home and auto bundle or the cheapest rates. Here are our top picks for home insurance in 2020.
- State Farm: Best for overall value
- Farmers: Best for bundling home and auto insurance
- Allstate: Best for cheap rates
- Erie: Best claims and customer satisfaction
- Nationwide: Best for first-time homebuyers
Our picks for the best home insurance companies summed up
|Company||Best for||Market share||Complaint index||Average yearly rate||J.D. Power rating|
|State Farm||All-around company||18.37%||0.34||$1,305||4/5|
|Farmers||Home and auto bundle||5.86%||0.40||$1,490||3/5|
|Note: Average rate increases are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary. Due to technical limitations, an estimate for Nationwide could not be attained.|
Best all-around value: State Farm
State Farm is our pick for the best value home insurance company, because it performs well in every category and doesn’t have glaring weaknesses. State Farm offers fair rates and an above-average customer experience based on the NAIC complaint index. It is also the largest home insurer in the U.S., so most people will be able to find a local agent.
You’re likely to find a State Farm agent in your area, but you’ll also enjoy online and mobile resources. State Farm’s website features information about its policies and insurance guides. The State Farm mobile app is well-reviewed and lets customers see their accounts, file and manage claims, assess ID cards and get assistance.
State Farm offers a wide array of insurance products, including home, auto, motorcycle and boat insurance, making it a one-stop shop. That simplifies the insurance process and gives you the option to bundle policies, which can mean extra savings.
Compare rates from the best homeowners insurance companies.
Best for bundling home and auto insurance: Farmers
We found Farmers to be the best company for bundling home and auto insurance, based on the combination of its multi-policy discount and fair rates. Many companies offer around 5% savings on bundling, even though it is often advertised as higher. Farmers comes in on the higher end of that, with customers often saving 10% to 15%.
Farmers also lets you add multiple cars on the same policy, which is not unique to Farmers, but can mean additional bundling savings. You can also combine a life insurance policy with your home or auto policy. Farmers’ many insurance products give ample opportunity for bundling. While large insurance companies often have many different types of policies, Farmers sets itself apart with its generous bundling discount.
Bundling multiple insurance policies with one company is a great way to save and simplify the process. Although Farmers may have an edge on their bundling rate discount, that does not mean they will offer the cheapest policy. For example, you may be able to get the cheapest rates by combining auto insurance from Progressive with home insurance from Allstate — comparing all your options is the only way to maximize your savings.
Best for cheap rates: Allstate
Of the companies we surveyed, Allstate had the cheapest rates, averaging $1,036 a year, which is $179 below the national average of $1,215. As the second largest insurer of homes in the U.S., Allstate can offer very competitive rates. As an added incentive to switch, first-time Allstate customers can get a two-year introductory price that amounts to a 10% discount.
One tradeoff you may have to make to take advantage of Allstate’s cheap rates is a slightly higher complaint index. Compared with the other companies on our list, Allstate had the highest number of complaints relative to its size. However, it still has a significantly better complaint index than the countrywide average, so customer satisfaction generally isn’t an issue with Allstate.
Best for claims and customer satisfaction: Erie
Erie Insurance had the lowest complaint index of the companies we studied, meaning that they receive few complaints relative to their size. This suggests that Erie customers are generally satisfied with their experience.
Erie includes guaranteed replacement cost coverage standard in their policies. That means that Erie pays out claims for damaged property based on how much it would cost to replace it. Many other insurers factor in wear and tear and depreciation to their most basic plans, called actual cost value. Replacement cost policies are preferable because they pay out based on the cost to replace an item.
Erie offers 24/7 phone support, but no mobile app resources. In order to file a claim, you’ll have to contact either the general Erie phone number or your personal agent. People who prefer person-to-person interaction may appreciate this, while those who want an integrated mobile and web experience may not.
In order to take advantage of Erie’s best-in-class customer satisfaction, you’ll have to live in one of the 12 states that Erie serves: Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Wisconsin.
Best for first-time homebuyers: Nationwide
We picked Nationwide as the best home insurance company for first-time homebuyers for its simple online quoting process and home purchase discount. An easy, customizable quote might be important for new homeowners who are going through the process of getting insurance for the first time and don’t want an over-complicated process.
Nationwide's newly purchased home discount is great for first-time homeowners, who often don’t qualify for other savings. Common discounts for age, claims-free history and company loyalty, for example, won’t apply for first-time homeowners. Additionally, younger people tend to have lower credit scores, which will raise your rates if taken into consideration. So even if you're a first-time homebuyer who is unable to take advantage of many discounts, Nationwide customers can still enjoy the newly purchased home discount.
With 17,000 agents across 48 states (Nationwide doesn’t serve Alaska and Hawaii), you’ll have a good chance of finding an agent in your state. This may be important for first-time homebuyers, so that there is a point of human contact for all the questions that may come up. Although Nationwide’s agents allow for face-to-face and phone interaction, its mobile apps aren’t well-reviewed.
Home insurance basics: The HO-3 policy and what items it covers
The standard, most common home insurance policy is called an HO-3, but there are several other types of homeowners insurance policies. You should familiarize yourself with what your HO-3 home insurance should cover in order to make sure that your company doesn’t leave anything out. There are six main categories of coverage in a home insurance policy: dwelling, other structures, personal property, loss of use, personal liability and medical payments to others.
Dwelling coverage is what most people think about with home insurance: it protects the structure of your house. If your house is damaged by an incident that your home insurance policy covers, this is the section it will fall under. So, if a tree on your property falls on your roof during a storm, this is the coverage it would fall under. Dwelling coverage only applies up to the limit on your policy, so you should buy enough coverage to completely rebuild your house.
A few of the other coverages are based on a percentage of the dwelling coverage limit. Your dwelling coverage is known as Coverage A, so if you come across a sentence like “20% of coverage A” in your home insurance policy, this is most often what it’s referring to.
Other structures coverage
Home insurance doesn’t only protect your house — it extends to other structures on your property. This includes buildings like detached garages, sheds and fences. Often, other structures coverage will be 10% of your dwelling coverage.
This portion of a home insurance policy covers your personal belongings. Typically, policies will have $100,000 of personal property coverage, however there are limitations. For example, many policies only cover jewelry up to $1,500. If you need more coverage for items that aren't covered fully, consider an endorsement.
Additional living expenses or loss of use
If you cannot remain in your home due to damage, the loss of use portion of your home insurance policy can pay for your additional living expenses. This coverage includes everything from extra gas expenses to hotel and grocery bills.
This portion of your policy covers you up to a set percentage of your dwelling coverage, often around 30%. So, if your dwelling coverage is $300,000 and you have 30% loss of use coverage, you’re covered up to $100,000.
Personal liability covers you if you accidentally injure someone or damage someone else's property. This protection travels with you and applies anywhere in the world. For example, if your kid hits a baseball through your neighbor’s window, personal liability will help pay for the expenses.
The standard amount of liability protection is $100,000. However, if you have significant assets to protect, you should increase this amount either on your home insurance policy or with an umbrella policy. That's because if someone sues you for $150,000, and you only have $100,000 of coverage, you could be responsible for the remaining $50,000.
Medical payments to others
Your homeowners insurance policy can pay the medical expenses of others if you accidentally injure them. For example, if your dog bites somebody in the park and the bite victim requires stitches, this protection could come in handy. The limit on medical payments coverage is usually $1,000 to $5,000.
Covered perils: What your home insurance protects you from
In order for your homeowners insurance to cover your house, belongings and property after they are damaged, the damage must stem from a "covered peril."
In insurance lingo, a peril is an event that causes property damage or bodily injury. Insurance policies will normally cover several perils. Home insurance policies come with two types of covered perils: all peril policies and named peril policies.
All peril policies, also called open peril policies, cover everything except explicitly stated exclusions.
Named peril policies, also called closed peril policies, only cover the explicitly stated perils.
Below is a table of common peril inclusions and exclusions in an HO-3 policy. However, it's important to remember that even if a peril that is normally covered is found to be the result of neglect, you may not be covered.
|HO-3 policies cover damage from…||HO-3 policies don’t cover damage from…|
|Windstorms and hail||Landslides|
|Theft||Acts of War|
|Water damage from stream, plumbing, sprinkler system and other accidental incidents *||Nuclear incidents|
|*excludes water damage due to sump, sump pumps, tidal water and flooding|
What factors go into my home insurance rates?
The factors that affect your home insurance rates can be split into three main categories: the characteristics of your home, the characteristics of your area and your personal rate factors.
The specifics of your home, such as its age, construction and roof material affect your home insurance rates. You can often make positive changes to your home in order to improve your insurance rates, such as adding a home security system or upgrading your roof.
Your home’s location may put it at higher risk for some perils. For instance, a home in an area that experiences more severe weather conditions or is far from the nearest fire station will have higher rates.
Your background, such as claims and credit history, marital status and insurance score also affect your insurance rates.
You’ll also have some options in choosing your deductible and replacement policy. A higher deductible will mean lower annual rates, and replacement cost policies are cheaper than actual cost value policies.
Homeowners insurance discounts
One of the best ways to earn a discount on your home insurance rate is by bundling your auto and homeowners policies together. We’ve seen cases where this can save up to 20% on home and car insurance premiums.
Another common discount is an alarm or security system discount. While an alarm system won’t save you as much money as bundling might, it is still worth exploring. However, our study of alarm system discounts on home insurance reveals that this discount isn’t all it's cracked up to be.
Many insurance companies offer a claims-free discount. Filing a claim with your insurance company may raise your rates, and avoiding filing one can lower them. It is not always clear when and when not to file a claim, but this discount may be worth pursuing.
Installing a new roof could qualify you for a discount from your home insurance company because it makes your home safer. For example, a new roof could prevent damage to your home from hail and other falling objects.
We studied the 100 largest homeowners insurance companies in the U.S. by market share. We considered market share because we wanted our recommendations to be applicable to many of our users. Then, we aggregated A.M. financial ratings to ensure that we only recommend financially stable and reputable companies.
We selected the top 20 companies from this list and compiled the NAIC complaint indexes for their largest subsidiaries. A final complaint index for each company was calculated by weighting the size of the subsidiary relative to the parent company, and that subsidiary's complaint index. This is the final complaint index that appears in our study. We understood common complaints for companies further by reading reviews for their service and mobile apps.
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