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Like any other type of insurance policy, homeowners insurance has a lot of moving parts. When you’re choosing your policy, there’s a lot more to consider than just the monthly premium you’ll pay for coverage.
When you’re looking for a home insurance policy, you’ll want to consider a few things, including which policy’s coverage best fits your needs and your home, the financial strength of the company, and how well the company handles customer service and claims experiences.
Business Insider looked at the top companies in size according to S&P Global data, and customer satisfaction from JD Power and Associates. Also considered were nationwide availability and the most recent credit rating from A.M. Best or Fitch Ratings. Here’s how the best homeowners insurance companies stacked up.
|Company||Credit rating (out of 100)||Customer satisfaction (out of 1000)||Market share||Available in all 50 states?||Weighted score|
|Auto Club Exchange||100||799||0.82||No||349.764|
|CSAA Insurance Exchange||80||807||0.91%||No||346.982|
|American Family Insurance||60||808||3.90%||No||341.98|
|UPC Insurance||Not rated||747||0.83%||No||298.966|
1. State Farm homeowners insurance
In 2019, State Farm wrote about $18 billion worth of homeowners insurance policies and covered 17% of America’s homeowners, according to data from S&P Global.
State Farm home insurance policies are available in all 50 states. They’re also available to purchase on your own online without an agent, as long as the home you’re insuring isn’t a mobile or manufactured home. Since State Farm also provides auto, disability, and life insurance, it could be beneficial to bundle all your insurance together for a discount.
2. Amica homeowners insurance
Amica isn’t the biggest insurer out there, writing under 1% of all homeowners insurance policies, and only available in the 48 contiguous states. But, Amica homeowners insurance is a strong competitor in customer satisfaction, earning the top spot in JD Power’s study of all widely available insurers.
Unlike other insurers on this list, Amica’s insurance policies offer a dividend, where money is returned to you. On average, Amica’s dividend policies return between 5% and 20% of annual premiums. Quotes are available online without an agent, making it easy to compare to other insurers.
3. Erie homeowners insurance
Erie Insurance has earned top marks for credit ratings and financial security, earning the second-highest rating from AM Best. Erie Insurance also earned the second highest ranking of widely-available insurance in JD Power’s customer satisfaction study.
Erie insurance isn’t available everywhere — coverage is only available in Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin, and the District of Columbia. Erie also offers auto insurance. However, policies must be purchased through an agent, and can’t be purchased online.
4. Auto-Owners Insurance Group homeowners insurance
While this company is named for its auto insurance coverage, Auto-Owners Insurance offers home insurance and insures about 1.5% of America’s homes. Earning high marks for customer service also helps this insurance company stand out.
Auto-Owners Insurance earned the highest rating for financial stability from A.M. Best, indicating a strong outlook. However, coverage is only available through an agent, and does not have online quotes or purchasing available.
Policies are available in Alabama, Arkansas, Arizona, Colorado, Florida, Georgia, Iowa, Idaho, Illinois, Indiana, Kansas, Kentucky, Massachussetts, Maine, Michigan, Minnesota, Missouri, North Carolina, North Dakota, New Hampshire, Ohio, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Virginia, Vermont, and Wisconsin.
5. Farmers homeowners insurance
Farmers owns about 5% of America’s homeowners insurance policies, and offers policies available nationwide. With strong credit ratings from A.M. Best and fairly high customer satisfaction ratings, Farmers homeowners insurance policy rounds out the top five.
Online quotes and purchasing is available through Farmers, making it easy to shop around. Farmers homeowner polices come in three different levels, making it easy to customize coverage.
Best homeowners insurance company for veterans and military families: USAA
USAA would have taken the top spot in this ranking, but it is only available to certain people. Only US service members and their families can get insurance coverage from USAA.
It is the highest-ranked insurance companies for customer service, earning an 878 out of 1,000 in JD Power’s Customer Satisfaction study for customer service, beating top-rated Amica by over 30 points. USAA has also taken top spots in Business Insider’s roundups for other types of insurance, including auto insurance. Coverage is available in all 50 states, and quotes are available online.
While it’s not an option for everyone, it’s a strong option for anyone who can use it.
Homeowners insurance varies based on several factors, including your home’s values, your home’s geographic location and its potential exposure to natural disasters, and the size of your home, among other factors.
Homes, and the best companies to insure them, look very different from coast-to-coast. For example, the same company that insures a 3,000-square-foot townhouse in New York may not look at a 3,000-square-foot single family home in Los Angeles the same way. Similarly, a beach house in Florida will be quite different to insure than a house in the rural Midwest.
Considering the most popular insurance company in your state could give you a starting point to start gathering quotes. Here are the most popular insurance companies in each state, according to data from S&P Global.
|State||Most popular insurance company||Market share|
|District of Columbia||State Farm||21.40%|
|Florida||Universal Insurance Holdings, Inc.||9.82%|
|New Hampshire||Liberty Mutual||13.92%|
|New Jersey||NJM Insurance||10.54%|
|New Mexico||State Farm||19.84%|
|New York||Allstate Insurance||13.86%|
|North Carolina||State Farm||16.92%|
|North Dakota||State Farm||15.14%|
|Rhode Island||Amica Insurance||16.34%|
|South Carolina||State Farm||20.04%|
|South Dakota||State Farm||19.41%|
|Vermont||Vermont Mutual Insurance||12.46%|
|West Virginia||State Farm||25.36%|
|Wisconsin||American Family Insurance||21.65%|
While one company may be the most popular in your state, it may not be your cheapest option. Use these companies as a starting point for your research to find out what best fits your needs.
How were the winners determined?
Business Insider looked at four factors to determine the best homeowners insurance. Credit ratings and nationwide availability were assigned points out of 100, and added to market share percentages and customer satisfaction points. These scores were then weighted to determine the final rankings.
Size (20% of each company’s weighted score)
Business Insider ranked homeowners insurance companies by size from S&P Global data. Each company’s market share and total amount of homeowners insurance premiums written each year were considered.
Customer satisfaction (40% of each company’s weighted score)
To better understand real customer’s experiences with each brand considered, Business Insider gathered data JD Power and Associate’s 2019 Home Insurance Customer Satisfaction survey. The data considers customer experiences with the company in terms of billing, help, and claims. Scores fall on a scale of 1,000 points.
Nationwide availability (10% of each company’s weighted score)
Not all insurers operate in all states. Business Insider considered state availability in choosing the companies that would be the best choices for the most customers.
Credit ratings from A.M. Best and Fitch (30% of each company’s weighted score)
Agencies A.M. Best and Fitch rate insurance companies based on their financial assets, and create projections on an insurer’s financial stability ability to pay out claims. These ratings are especially important for large and long-term insurance policies, like homeowners or life insurance.
How much is homeowners insurance?
The average homeowners insurance policy costs $1,211 per year, according to data from the National Association of Insurance Commissioners. That comes to an average of $100.91 per month.
But, there are several factors that could influence the price you’ll actually pay for homeowners insurance, the amount of coverage you need, the size of your home, and the type of home you have. Someone with a two-bedroom, two-bath home will pay a very different price for insurance than someone who has a four-bedroom home with a swimming pool.
Where you live will also have a big effect on your insurance cost for two reasons. Firstly, the types of coverage you need will vary with where you live — while it may not make sense for someone in the Midwest to have earthquake insurance, it may not make sense for someone on the West Coast to have tornado insurance.
The real estate prices in your area will also have an impact on the price you’ll pay for coverage. In general, states with lower property values cost less to insure. The average homeowners policy in Ohio, Missouri, and South Dakota, where property values are low, cost under $900 per year. Meanwhile, states with more expensive real estate — like Maryland, Virginia, and Delaware – cost over $1,100 on average to insure.
What does homeowners insurance cover?
A standard homeowners insurance policy doesn’t necessarily cover anything that could go wrong with your home. A standard policy, for example, won’t cover damage from a flood or earthquake, but there are separate coverage options available for that. According to the Insurance Information Institute, there are four main things a homeowners insurance policy should cover.
Your homeowners insurance policy should cover the structure of your home, and any other buildings like a detached garage or shed. This type of coverage will cover your home after some disasters, like a fire, hail, or a hurricane. III suggests that this coverage amount should be sufficient enough to re-build your home.
Coverage for personal items
Your homeowners insurance doesn’t just cover your home’s structure — it can also help to replace lost items inside your home. After a disaster, a home insurance policy should provide coverage for between 50% and 70% of your home’s structure coverage amount.
Additionally, some policies offer identity theft coverage, coverage for valuable items, and possibly even coverage for unauthorized credit card use.
Check your policy’s terms to see exactly what items your prospective policy could cover.
This type of coverage could protect you if you’re ever involved in a court case. For example, if someone falls and hurts themselves on your property and sues you for it, this coverage can cover costs.
Additional living expenses
If your home is damaged in a disaster, this part of your policy will help pay for your living costs (including hotel costs and meals) until your home is livable again, or until you reach the limit set in the policy. It can also cover lost rental income in this situation.
How to find the best cheap homeowners insurance
Like any other insurance policy, shopping around by getting quotes from several different insurers and comparing the coverage and price is the best way to make sure you’re getting the best deal. Look at the coverage types and their respective limits, and look for the policy that best fits your budget. In general, the best policy for you is the one that has the most coverage for the smallest premium.
Policygenius can help you compare homeowners insurance policies to find the right coverage for you, at the right price »