Best Homeowners Insurance Companies of 2020
Best Homeowners Insurance Companies of 2020
A good homeowners insurance company protects your property and peace of mind. To help you choose, we’ve identified several insurers we think are best in class.
Find Cheap Homeowners Insurance Quotes in Your Area
Given the variety of coverage options and rates offered by insurers, no single home insurance company will be the best fit for everyone. We've provided home insurance reviews for companies that fit a variety of customer profiles, whether you're looking for cheap prices or great customer service.
Most affordable rates: State Farm
Insurer Details
- A.M. Best Rating: A++ (Superior)
- J.D. Power Rank: 5th of 24 home insurers
- Unique Discount: Impact-resistant roof
State Farm is the best choice for homeowners who want to lower home insurance costs without sacrificing quality. State Farm’s low rates and national coverage give homeowners across the country access to affordable coverage. It offers the best homeowners insurance premiums across several states, including fire-prone places like California.
In addition to offering lower starting rates, State Farm also provides a standard set of discounts and policy tweaks which can help you reduce your homeowners insurance premium.
Lowering your premium
Like many insurers, State Farm offers discounts on your premium if you opt for a higher deductible. Bundling your homeowner policy with car insurance can save you even more. And you also get discounts for taking steps to reduce your risk, such as installing an impact-resistant roof.
The low costs don't come with substandard service, either: State Farm is rated as one of the most financially secure insurers in the country, and also receives fewer consumer complaints than average for an insurer of its size. This means that State Farm is more likely to address home insurance problems quickly and with a minimum of back and forth.
Best customer service: Amica
Insurer Details
- A.M. Best Financial Strength Rating: A+ (Superior)
- J.D. Power Rank: 1st of 24 home insurers
- Unique value: Loyalty discount starting in second year
We found that Amica is the best choice of insurer for any homeowner who prioritizes quality service. Amica consistently receives top marks for its customer service: It's been named the best home insurance company for overall customer satisfaction by J.D. Power for 16 years in a row.
The Contractor Connection program is one example of how Amica goes above and beyond for customers. This free program helps policyholders find contractors for home repairs or upgrades and also provides a three-year workmanship warranty on that work.
As a mutual insurance company, Amica is owned by policyholders who share in the company's profits via annual dividends. Amica dividends can be as much as 20% of the annual premium on a dividend policy. Dividends can vary each year, and dividend policies cost more — but if you like the idea of investing in your insurer's performance, Amica offers a unique way to do so.
Best for high coverage limits: Farmers
Insurer Details
- A.M. Best Financial Strength Rating: A (Excellent)
- J.D. Power Rank: 11th of 24 home insurers
- Unique value: Discount for Energy Star, EPA or LEED certification
Homeowners looking to insure high-value properties should consider starting with a quote from Farmers. We found that Farmers usually offers the lowest rates for policies with coverage limits above $200,000, along with home upkeep discounts that could help you save even more.
Many of the improvements that qualify you for a Farmers premium discount also align with your long-term interests as a homeowner. These include swapping out heating and plumbing appliances for more energy-efficient versions as well as general maintenance of electrical wiring or insulation, all of which can help lower your utility bills.
Another benefit of home insurance with Farmers is its well-regarded customer service. The company's approach to customer claims has earned it an above-average J.D. Power rating for several years. You can also rest easy knowing that Farmers’ financial strength rating indicates that there's little chance of it failing to pay out claims, even in a major disaster.
Best for first-time homebuyers: Allstate
Insurer Details
- A.M. Best Financial Strength Rating: A+ (Superior)
- J.D. Power Rank: 10th of 29 home insurance companies
- Unique value: "Claim RateGuard" prevents rates from going up after a claim — for a fee
Among the largest homeowners insurance companies, Allstate offers the best educational resources for first-time homebuyers. Allstate’s Common and Costly Claims tool allows you to look up the most common home insurance claims in your ZIP code. This can be very useful in helping first-time homebuyers identify which coverages are most important to them.
First-time homeowners at Allstate can also take advantage of multiple stacking discounts. The homebuyer discount and the new customer welcome discount can save you up to 10% on your annual premium. Put together, the two discounts can save new homebuyers hundreds of dollars per year.
Best for military families: USAA
Insurer Details
- A.M. Best Financial Strength Rating: A++ (Superior)
- J.D. Power Rank: Score tied for 1st of 24 home insurers
- Unique value: Military-only rates and service on all products
The United Services Automobile Association (USAA) combines great features with outstanding service, which makes it the best homeowners insurance company for veterans and servicemembers. USAA offers policyholders a few features free of charge that other insurance companies do not.
USAA provides all policyholders with replacement cost coverage for damaged personal items. This means no deduction for depreciation on the property being repaired or replaced in your claim. Other benefits that cater to servicemembers include:
- Property insurance extends to belongings in war zones
- Uniforms covered under homeowners personal property insurance, with no deductible
USAA's awareness of the particular challenges in military life make it an ideal insurance option for homeowners in the armed forces. Few other insurance companies are as focused on serving military customers as USAA, and its wide selection of other financial products such as bank accounts and loan options make it an excellent long-term choice for all your money needs.
How to find affordable home insurance
One of the best ways to find cheap home insurance is to compare rates online from multiple companies. Each home insurance company prices risk in its own way, so you increase the likelihood of getting the best price as you compare more insurers. Getting a quote through an online form usually takes no more than ten to fifteen minutes.
You can also save money on homeowners insurance by qualifying for insurer deals and discounts. Most home insurers offer significant deals for bundling multiple policies and for making home improvements to minimize your risk. Individual companies — particularly smaller insurers — often have unique discounts as well.
Selecting a higher deductible for your structure and property coverages will also lead to cheaper home insurance rates. However, raising your deductible means taking more risk on yourself. Make sure that your home insurance deductible is never greater than the amount you'd be able to pay out-of-pocket after an incident.
Finally, consider newer insurers who may be offering insurance coverage through a different platform. As in many other industries, tech-focused startups like Hippo Insurance may offer you a discounted rate thanks to either reduced overhead or a need to fund growth.
The best home insurers by customer satisfaction
Once you've determined the coverage you need and found cheap quotes for home owners insurance, you should also consider a company's ratings and reviews before purchasing a policy. The best rated home insurance companies are Amica and USAA, according to JD Power's annual comparison, and these companies consistently receive very few complaints as compared to their market share.
Ratings of Top Homeowners Insurance Companies
| Insurer | Market Share | Customer Satisfaction Rating |
|---|---|---|
| State Farm | 19% | 3 |
| Allstate | 8% | 3 |
| Liberty Mutual | 7% | 3 |
| USAA | 6% | 5 |
| Farmers | 6% | 3 |
| Travelers | 4% | 2 |
| Nationwide | 4% | 3 |
| American Family | 3% | 3 |
| Chubb | 3% | 3 |
| Erie | 2% | 3 |
| Auto Owners | 2% | 3 |
| AIG | 1% | 3 |
| MetLife | 1% | 2 |
| Hartford | 1% | 3 |
| CSAA | 1% | 3 |
| AAA | 1% | 3 |
| Amica | 1% | 5 |
If you're concerned about an insurer that has received mixed or below-average ratings, we recommend consulting multiple ratings sources, such as the NAIC and online reviews. Given the cost of homeowners insurance, you should have confidence that your insurer will answer your questions and offer the support you need if you need to make a claim.
What should a good homeowners insurance policy cover?
While home insurance companies can offer a diverse array of optional add-ons like water backup and identity theft protection, all policies are built on four core coverages:
Dwelling coverage provides compensation for damage caused to the structure of your home by a covered peril, such as fire or a windstorm.
The structure of your home refers to the walls, roof, siding, foundation and other fixed elements of your home's construction.
Your dwelling coverage limit should fully cover the cost of your rebuilding your house — in other words, your home's replacement cost. Make sure you calculate this value using prices for material that's equal in quality to your home's current structure. Actual cash value coverage is cheaper, but reduces your claim for wear and tear.
Personal property coverage gives you protection for most of your movable belongings, excluding vehicles.
Personal property coverage in home insurance policies generally include items like furniture, televisions, clothing and appliances. High-value goods like jewelry are often covered up to lower per-category limits.
Your policy details will list out the specific limits — usually in the thousands of dollars — for high-value categories. However, at an additional cost, most insurers offer an option for schedule personal property coverage, which will increase the protection for these high-value items.
Liability coverage protects you if you're held responsible for injury to other people or their property. This applies to your legal fees and damages, up to policy limits. Typical personal liability limits within a home insurance policy can range from $100,000 to $300,000, but you can buy more coverage for little extra cost.
Additional living expenses coverage or loss of use coverage will reimburse you for costs incurred when your house becomes uninhabitable due to a covered event. Relevant situations include both accidental causes like fire and government evacuation orders during disasters. This coverage only applies to expenses that are above and beyond your normal living expenses.
What do homeowners want out of their insurance?
To better understand the relationships between homeowners and insurers, ValuePenguin conducted a national survey of home insurance customers and asked them a series of questions about their experience with providers. Among other findings, our data supported the idea that home insurance customers care more about rates than any other factor.
- 58% of homeowners said they chose their current insurer because it offered the best rate
- Just under 40% of all homeowners said that they've switched insurers at least once
- Among homeowners who switched insurers, 77% cited problems with rates as a reason for leaving
- About 32% of homeowners with insurance said that they had filed a claim with their current insurer
- 74% of those who filed a claim reported hearing back from their home insurance company within 1 week
Homeowners prioritize affordable coverage
According to the homeowners in our study, the cost of coverage was the strongest factor in how they chose their insurance company. When asked why they had selected their current provider, 58% cited the fact that the provider offered the "best rate" as one of their reasons. The quality of customer service came in a distant second.
Reasons people gave for choosing their home insurer
| Best rate | 58% |
|---|---|
| Customer service | 39% |
| Benefits (such as discounts) | 29% |
| Local office | 27% |
| Recommendations from friends/family | 22% |
| Online reviews | 10% |
| Recommendations from mortgage lender | 8% |
When asked why they had left their old insurers, homeowners showed the same concern for finding the best home insurance rates. A combined 77% of switchers explained their decision by saying that either rates had increased or their old insurer was no longer the most affordable option following a change in the homeowner's profile.
Reasons people gave for leaving their previous home insurer
| Rates increased | 53% |
|---|---|
| Poor customer service | 27% |
| My details changed (eg: moved, renovated my home, etc.) and they no longer offered the best rates | 24% |
| Mishandled my claim | 10% |
| No local office in my area | 10% |
| Insufficient benefits (such as discounts) | 9% |
| Denied my claim | 7% |
Other considerations, such as a negative claim experience or bad service, fell far behind the overriding importance of finding an affordable premium.
People who file claims generally report a positive experience
In contrast, our survey findings went against the common idea of homeowners leaving their insurers after a dispute over claims handling. Roughly 40% of insured homeowners in the survey said that they had switched insurers at least once. Of these, only 17% blamed the change on a mishandled or denied claim.
Homeowners insurance satisfaction vs. claim history
| No claims | Filed a claim | All homeowners | |
|---|---|---|---|
| Extremely satisfied | 49% | 58% | 52% |
| Somewhat satisfied | 34% | 30% | 33% |
| Neither satisfied nor dissatisfied | 14% | 8% | 12% |
| Somewhat dissatisfied | 1% | 3% | 2% |
| Extremely dissatisfied | 1% | 1% | 1% |
Meanwhile, those who did file a claim ended up happier with their choice of insurance than those who didn't. While all homeowners expressed satisfaction with their current insurance provider by an overwhelming majority (85%), satisfaction was even higher among those who had gone through at least one claim with their insurer (88%).
What are the top 5 home insurance companies?
While we have our own opinion on the best home insurance companies for consumers to consider, the top 5 biggest homeowners insurance providers are State Farm, Allstate, USAA, Liberty Mutual and Farmers Insurance.
What's a reasonable price for home insurance?
The rates that you see as a homeowner are affected by a number of factors, ranging from your property's characteristics and location to your own personal details. However, we can report that the average cost of home insurance is about $1,445 per year, assuming coverage for a home at the median national value.
Which insurer has the highest customer satisfaction?
Looking at multiple factors and ratings from sources like J.D. Power, Amica and USAA receive the highest customer satisfaction ratings among major insurance companies. This may have something to do with the way they're structured: USAA is exclusively focused on serving military families, while Amica is a mutual insurance company that is ultimately owned by the policyholders that it serves.
Methodology and results
There isn’t a single home insurance company that fits everyone’s needs, so evaluate what is most important to you when choosing the best provider for you:
| Company | Best For... |
|---|---|
| State Farm | Best for cheap home insurance rates |
| Farmers | Best for high policy limits |
| Amica | Top ratings and reviews |
| Allstate | Best for new homebuyers |
| USAA | Best for U.S. military and their families |
To evaluate the best homeowners insurance companies, we compared the largest home insurance companies based on rates, reviews, ratings and their financial strength.
- Rates: Home insurance rates are dependent upon a great number of factors, including the location of the home being insured and a policyholder’s previous claim history. Due to the price variation that exists in the home insurance industry, our search for the best companies was focused on insurers that consistently offer low rates.
- Reviews and ratings: Customer reviews and ratings give insight into what can be expected of a company’s claims process. You’ll want to select an insurance company that is highly reviewed and rated in order to ensure a smooth experience should you ever need to file a claim.
- Financial strength: A home insurance company is only as good as its ability to meet its customers’ claims. A company with great financial strength won’t have any problems paying out claims, whether a claim is for $100,000 or $500,000. On the other hand, a poor financial strength rating indicates that the insurance company might struggle to pay for a customer’s claims.
Chris is a Product Manager for ValuePenguin with years of experience in addressing critical questions about mortgages and homeowners insurance. He spends his time evaluating insurance providers and policy features to understand where consumers might find the most cost-effective coverage. Chris has contributed insights to the New York Times and many other publications.
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.