Best Homeowners Insurance Companies of 2021
Best Homeowners Insurance Companies of 2021
Effective homeowners insurance 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
No single home insurance company is the best fit for everyone. Different providers offer different coverage options and rates tailored to your unique needs and challenges as a homeowner. We've developed 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
- AM Best Financial Strength Rating: Varies depending on what state you're in, but most common grade is A++ (Superior)
- J.D. Power rank: 7th out of 23 home insurers
- Unique discount: Impact-resistant roof
State Farm is the best choice for homeowners who want to reduce their 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 that 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 can also get discounts for taking steps to reduce your risk, such as installing an impact-resistant roof.
While low rates sometimes signal poor customer service, this is not the case with State Farm. In addition to providing policyholders with low rates, State Farm received an above-average customer satisfaction score from J.D. Power and a solid Financial Strength Rating from AM Best. This suggests that State Farm is more likely to address home insurance problems quickly and with a minimum of back and forth.
Best customer service: Country Financial
Insurer details
- AM Best Financial Strength Rating: A+ (Superior)
- J.D. Power rank: 1st out of 23 home insurers
- Unique value: Numerous discounts for homes that include safety features
We found that Country Financial is the best choice of insurer for any homeowner who prioritizes quality service. The company was ranked as the top insurer by J.D. Power for its strong customer satisfaction rating. Out of a possible 1,000 points, Country Financial received 855. It also received an A+ Financial Strength Rating from AM Best, which indicates that AM Best believes the insurer has a "Superior" ability to pay out claims.
Country Financial offers customers a number of discounts to help offset the cost of insurance. These include:
- Multi-policy, which allows customers with multiple policies to receive a discount.
- Age of wiring, which reduces rates for customers with newer electrical wiring.
- Safe heat discount, for customers in homes without hazard heating sources like a wood-burning stove.
- Alarm discount, for customers whose homes have certain fire and anti-theft equipment installed.
- Dwelling age discount, for customers with a newer home.
- New roof discount, for customers who have replaced their roof within the past decade.
- Roof discount, for roofs made of hail-resistant roofing products.
Country Financial also offers guaranteed replacement-cost coverage, which pays for the full cost of replacing your home, regardless of inflation. If your home is located in an area particularly vulnerable to natural disasters, this could be a solid choice.
Best for high coverage limits: Farmers
Insurer details
- AM Best Financial Strength Rating: Varies depending on state, but most common grade is A (Excellent)
- J.D. Power rank: 12th out of 23 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.
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 building windows, walls or roofs that are specifically designed to withstand natural disasters.
Best for first-time homebuyers: Allstate
Insurer details
- AM Best Financial Strength Rating: Varies depending on state, but most common grade is A+ (Superior)
- J.D. Power rank: 6th out 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 & Costly Claims tool allows you to look up the most common home insurance claims in your ZIP code. This can be 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 10% new customer welcome discount can help new homebuyers save hundreds of dollars per year.
Best for military families: USAA
Insurer details
- AM Best Financial Strength Rating: A++ (Superior)
- J.D. Power rank: Tied for 1st out of 23 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 active service members. USAA offers policyholders a few features free of charge that other insurance companies do not.
USAA offers policyholders replacement cost coverage for damaged personal items. If you opt for replacement cost coverage, USAA will provide sufficient funds to replace a damaged item instead of the actual cash value of the item when it was destroyed.
Other benefits that cater to service members include:
- Property insurance extends to belongings in war zones.
- Uniforms are covered under homeowners personal property insurance, with no deductible.
USAA's awareness of the particular challenges of military life make it an ideal insurance option for those who have served in the military and their families. In addition to insurance, USAA also boasts a wide selection of other financial products, such as bank accounts and loan options. This makes it an excellent long-term choice for all of your personal financial 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 10 to 15 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 on more risk yourself. Make sure that your home insurance deductible is never greater than the amount you could pay out of pocket after an incident.
Finally, consider newer insurers who may be offering insurance coverage through different platforms. As in many other industries, tech-focused startups like Hippo may offer you a lower rate thanks to either reduced overhead or a need to fund growth.
Best home insurers by customer satisfaction
Once you've determined the coverage you need and found cheap quotes for homeowners insurance, you should also consider a company's ratings and reviews before purchasing a policy. The best-rated home insurance companies are Country Financial and USAA, according to J.D. Power's annual study.
Ratings of top homeowners insurance companies
Insurer | Market share | Customer satisfaction rating (out of 1,000) |
|---|---|---|
| State Farm | 17.9% | 829 |
| Allstate | 8.4% | 829 |
| USAA | 6.6% | 889 |
| Liberty Mutual | 6.5% | 805 |
| Farmers | 5.7% | 814 |
| Travelers | 4.1% | 803 |
| American Family | 3.9% | 821 |
| Nationwide | 3.1% | 808 |
| Chubb | 2.9% | 778 |
| Erie | 1.7% | 839 |
| Auto-Owners | 1.6% | 843 |
| Progressive | 1.6% | 797 |
Average rating is 823.
If you're concerned about an insurer that has received mixed or below-average ratings, we recommend consulting multiple ratings sources, such as the National Association of Insurance Commissioners and online reviews.
Consider asking your friends, family and neighbors about their homeowners insurers as well. Those who live near you are often subject to the same insurance risks as you — such as weather or crime — and their claims experience can help inform your decision. Homeowners insurance is a significant investment, and you should have confidence that your insurer will support you if you need to make a claim.
What should a good homeowners insurance policy cover?
While home insurance companies offer a diverse array of optional add-ons, like water backup coverage 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 a fire or 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 protects most of your movable belongings, excluding vehicles.
Personal property coverage in home insurance policies generally includes 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 the specific limits — usually in the thousands of dollars — for high-value categories. However, at an additional cost, most insurers offer an option for scheduled personal property coverage, which increases 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 in a home insurance policy 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, reimburses 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 one 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% |
Survey asked: 'Why did you decide to use your current home insurance provider? Please select all that apply.'
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% |
Survey asked: 'Why did you leave your previous home insurance provider? Please select all that apply.'
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% |
Survey asked: 'Overall, how satisfied are you with your current home insurance provider?'
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 five home insurance companies?
While we have our own opinion on the best home insurance companies for consumers to consider, the top five biggest homeowners insurance providers are State Farm, Allstate, USAA, Liberty Mutual and Farmers.
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, Country Financial and USAA received the highest customer satisfaction ratings among major insurance companies.
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 a provider.
Company | Best for... |
|---|---|
| State Farm | Best for cheap home insurance rates |
| Farmers | Best for high policy limits |
| Country Financial | Top ratings and reviews |
| Allstate | Best for new homebuyers |
| USAA | Best for military and their families |
To evaluate the best homeowners insurance companies, we compared the largest home insurance companies based on rates, reviews, ratings and financial strength.
- Rates: Home insurance rates depend on a 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 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.