A home is likely the largest purchase you’ll ever make in your life.
But what would happen if your oven catches fire and burns down your home? Or lightning strikes and causes major damage?
If you don’t have homeowners insurance, you’d have to pay to repair or rebuild your home yourself. Thankfully, purchasing homeowners insurance can help you prevent a financial disaster.
Best homeowners insurance overview
|Insurance Company||Best For|
|Lemonade||90 seconds to get insured|
|State Farm||Policy options|
|USAA||Military members and their families|
In-depth analysis of homeowners insurance companies
- Best for: Those looking for socially conscious insurer
Lemonade isn’t your typical homeowners insurance company. Lemonade takes a flat fee from your insurance premiums and with the money left over, Lemonade buys reinsurance and pays for unavoidable expenses. Then, they use the rest of the premiums to pay claims.
Any unclaimed money left over is donated to a non-profit of your choice through a process called giveback.
The idea behind Lemonade is to give back unclaimed money to non-profits you believe in, lowering the odds of fraud which is a huge cost in the current insurance industry. By choosing Lemonade, both you and the non-profit you select could benefit from this new insurance model.
- Best for: Online rate shopping
We featured Policygenius as the top online homeowners insurance website for shopping because they give you homeowners insurance quotes by filling out a single application that takes just three minutes to complete.
All you have to do is fill out information about your home, yourself, and your contact info. Then, Policygenius will send you an email from a licensed expert within 24 hours to talk next steps and they’ll send you quotes within 48 hours.
- Best for: Simplicity
If you’re looking for a quick and efficient way to upgrade your current policy or open a new one, Young Alfred is an excellent choice. Users who have been unhappy with the cost of their homeowners policies can save $600 (or more) in just a few short days, but getting a fast and easy quote from Young Alfred.
Young Alfred is directly partnered with 40 insurance carriers and does not require a phone call to purchase your policy. You’re more than welcome to give any of their agents a call but you don’t have to.
- Best for: New homeowners
Allstate is our top homeowners insurance company pick for new homeowners due to their extensive resources to help new homeowners figure out homeowners insurance.
In addition to Allstate’s helpful insurance agents that you’ll probably find in your local community, Allstate’s website offers tons of educational material to explain how homeowners insurance works, along with detailed information on some of the more complicated factors.
Allstate also offers discounts that can help new homeowners find an affordable policy that also meets their needs.
- Best for: Those looking for the largest, most reliable home insurer
According to Policygenius, State Farm has a market share of 18.63 percent, the highest among homeowners insurance companies listed. As the second-largest homeowners insurance company, Allstate, only has an 8.44 percent market share.
You don’t become the largest homeowners insurance company without a strong product and decent premiums. For these reasons, we’ve included State Farm in our top homeowners insurance companies list.
- Best for: Military members and their families
USAA is the United Services Automobile Association, but despite their name, they also offer homeowners insurance.
Unfortunately, everyone can’t join USAA. Only those currently serving in the U.S. military, former military, family of military, and cadets or midshipmen may join.
We featured USAA as our top home insurer for military and their families because USAA’s sole focus is serving this important group of people. USAA offers exclusive benefits, products and discounts for U.S. military members and they state their commitment to their members is superior to any other major financial service provider.
Summary of the top homeowners insurance companies
Now that you have a better idea of how homeowners insurance works, what the policies cover, and how premiums are determined, we thought it’d be a good idea to share our picks for the top homeowners insurance companies and why we picked them.
Here’s a quick table to summarize each:
|Insurance Company||Coverage||Average Premium|
|Lemonade||Theft or damage to your possessions|
Personal liability insurance
Loss of use insurance
Medical payments insurance
Extra coverage for valuable items, earthquakes, and loss/damage to your possessions
|Starting at $25/month|
|Varies by insurer (aggregator)||Varies between insurers
|Allstate||The physical structure of your home|
Belongings inside your home
Liability claims against you or your family
Most weather-related events
|Between $500 - $2,000/year (depending on state)|
|State Farm||Fire and lightning|
How to choose the best homeowners insurance company for you
Choosing the right homeowners insurance company for you may be different than another person’s choice. Before you get started, it helps to take a look at your goals for your insurance policy.
For most people, the goal is finding the lowest cost policy that provides decent coverage. For others, top-notch customer service during claims or unique rider or add-on coverage options may be the most important.
Once you know your top priorities, consider each homeowners insurance company competing for your business in the following areas. Then, choose the best one that fits your needs based on your goals.
Most insurance companies offer the same general types of coverage. The details can vary from company to company, though. One insurer may exclude a certain type of property within a category while another insures it in its standard policy.
You’ll have to read the policy to find out what is included and excluded. If you have specific questions when getting quotes, make sure to ask the insurance company before purchasing the policy.
The limits and required amounts for each type of coverage may vary by insurer, as well. If you don’t have much personal property but your insurer requires you to carry personal property insurance for half of the value of your home’s structure, you may be paying for extra protection you don’t need.
Premiums and discounts
Your annual homeowners insurance premium is often the most significant deciding factor when choosing an insurance policy.
In some cases, the premium may be lowered if you qualify for discounts. Always ask your insurer to run through the complete list of discounts to see if you could be eligible for any extra ones you weren’t initially considered for.
Deductibles are the amount you have to pay out of pocket to help cover a claim before the insurance kicks in. Deductibles can range from just a few hundred dollars to a percentage of your home’s value. In general, the lower the deductible is, the higher your premium will be.
When getting insurance quotes, consider how much you can pay if you have to make a claim. Then, decide whether the cost difference between different deductibles is worth the cost.
Different insurers may offer different deductible options. If this is important to you, be sure to select an insurer that offers the deductible options you want.
This is likely one factor that you’ll have to consider along with others, such as price and coverage options, when choosing the best homeowners insurance company for you.
Riders or Add-ons
Homeowners insurance policies won’t cover every potential event or piece of property you own. Some insurers exclude certain types of property or hazards to control their costs. You may be able to add a rider or add-on to your policy to cover these excluded items at an additional fee.
For example, my parents had a pool screen enclosure attached to their home. It wasn’t covered under their main insurance policy. They had to get a rider to have it partially covered for up to $10,000.
It’s a good thing they bought the rider. A hurricane destroyed their pool enclosure and it had to be replaced. The replacement cost over $10,000, but at least the insurance company paid out the full $10,000 amount. This helped pay for a good portion of the replacement pool enclosure.
Customer service, especially during claims
When you need your insurance company, chances are you’re going through a stressful event. Whether a hurricane just hit your home or a fire caused major damage, the last thing you want to deal with is awful customer service at your insurance company. You don’t want to fight tooth and nail to get the insurance to cover what should be paid out in a reasonable time frame.
You usually won’t have personal experience dealing with making claims with an insurance company. Reading reviews can provide you with insight. Remember, people generally tend to leave bad reviews when they’re frustrated but don’t often leave good reviews when they receive amazing service.
Even so, reading reviews can help you figure out how good or bad an insurance company’s customer service is. If excellent customer service is essential to you, you might have to pay a higher premium to get it.
Why you need homeowners insurance
Homeowners insurance protects you from losing a significant amount of money should something awful happen to your home or belongings and they need to be repaired or replaced. Without homeowners insurance, you’d have to pay for these costs yourself. Most people don’t have enough money set aside to completely rebuild their home should a natural disaster completely destroy their home.
In addition to spreading out your financial risk, homeowners insurance is likely required by your mortgage company. They want you to be able to repair your home or repay the balance you owe on your mortgage loan in the event your home is a total loss.
What to look for in homeowners insurance
When shopping for a homeowners insurance policy, there are many factors you should investigate to find the perfect policy for you. They including the following:
- Coverage limits offered vs. the value of your home, belongings, and other structures.
- Which perils are covered.
- What property is covered.
- How reimbursement for damages is determined (replacement cost or actual cash value).
- What riders you can add to your policy.
- Exceptions for things the policy won’t cover.
- Deductibles for different coverages.
- Discounts you qualify for.
- The financial strength of the company.
- Customer service of the company.
- Customer reviews of the company.
- Your annual premium.
How homeowners insurance rates are determined
One of the major factors most people use to determine which homeowners insurance policy they pick is the premium they have to pay. The formulas insurance companies use to calculate premiums can be extremely complex due to the variety of factors that impact a policy’s cost to the insurer.
That said, insurance companies may consider some or all of the following factors when setting your premiums:
- Insurance laws in the state you live in.
- The amount of coverage you select.
- Which riders you add to your policy.
- How much your deductibles are.
- The size of your home.
- The quality and finishes of your home.
- The age of your home.
- The estimated cost to rebuild your home.
- Where your home is located.
- Crime in your location.
- Fire protection ratings in your location.
- Your credit.
- Your claims history.
- Whether you have actual cash value or replacement cost coverage.
- If you have a home-based business at your property.
- Discounts you qualify for.
- Whether you pay in full or in multiple payments.
While premiums are important, you should strongly consider other factors listed here to make sure you’re properly covered rather than just paying a small premium for bare-bones coverage.
Frequently asked questions (FAQs) about homeowners insurance
If you have a mortgage (which most people do) you’ll need homeowners insurance. Picking the right insurance for can save you money whether you’re buying homeowners insurance for the first time or are just looking to switch policies.
Keep in mind, just because we think a homeowners insurance company is a top pick doesn’t mean it’s a perfect fit for your situation. As always, fully investigate all policies and compare them to your needs before choosing the policy you want to go with.