The Cheapest Homeowners Insurance Companies in 2020

The Cheapest Homeowners Insurance Companies in 2020

Find Cheap Homeowners Insurance Quotes in Your Area

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Shopping for cheap home insurance doesn't mean you should ignore every other factor. At ValuePenguin, we focused our search for affordable coverage on insurers who met our minimum standards for effective coverage, dependable service and financial strength. Find out which companies provide the best cheap home insurance, or compare your local options with the tool above.

As with insurance in general, it can be difficult to see the value of homeowners insurance as long as everything is going well. However, getting by with the bare minimum coverage might not provide you with enough protection from the financial fallout of an accident or disaster. We compared quotes from a selection of companies in order to help you find home insurance that's not only affordable but also effective.

Cheapest insurer for most homeowners: Travelers

If you're set on the cheapest rates possible, start with Travelers — but your experience may vary depending on your location and coverage amount.
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Insurer Details

  • A.M. Best Rating: A- to A++ (varies by state)
  • J.D. Power Rank: 23rd of 27 home insurers
  • Unique Value: Cheapest home insurance rates overall

Read the full review

Our analysis found that in most cases, Travelers delivered cheaper homeowners insurance rates than any of its major competitors. In the states we surveyed, the quote from Travelers came out to an annual premium of $1,050. However, this affordability comes with a few caveats.

We aren't claiming that Travelers is the cheapest overall insurer in each state — simply that it's the most affordable option among the insurers we found were available in every state. There are hundreds of local insurers that may be able to give you a better rate in any given scenario.

Travelers' most common financial strength rating of A++ from A.M. Best indicates that it's unlikely to default on any claims you make, but the company's rating dips in certain states like Florida (A-) and Massachusetts (A). Meanwhile, the company's NAIC complaint index of 0.3 is lower than average, but its poor performance in the J.D. Power rankings make a muddled picture of its quality.

Ultimately, we find that Travelers home insurance is the best place to start comparing rates for your policy, but it shouldn't be the only insurer you check. Other large insurers — or even local companies — might offer both a decent rate and solid service.

Best home and auto bundle: State Farm

If you need to insure a car as well as your home, State Farm's bundle discount might be your most affordable option.
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Insurer Details

  • A.M. Best Rating: A++ (Superior)
  • J.D. Power Rank: 5th of 24 home insurers
  • Unique Value: Best bundle discount we found

Read the full review

If you're shopping for lower rates on auto insurance as well as for homeowners insurance, then State Farm is probably the best insurer to start with. When we calculated the discount that each insurer offers to customers that bundle auto and home coverage, the quotes from State Farm showed the greatest potential savings.

According to our research, the home insurance rates calculated from State Farm went down by 22% to 30% when we added an auto insurance policy. In nearly every zip code, the discount for bundling with State Farm was greater than with any other insurer we analyzed.

Choosing State Farm for your homeowners insurance offers other advantages besides competitive bundling discounts. It's not only the largest insurer for American homeowners but also maintains an NAIC complaint index of 0.2. This means that State Farm is also one of the top choices for anyone concerned with getting great customer service from their home insurance company.

Best for veterans: USAA

Besides its low rates for home insurance, USAA provides you with excellent service and a one-stop shop for many other financial needs.
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Insurer Details

  • A.M. Best Financial Strength Rating: A++ (Superior)
  • J.D. Power Rank: 1st of 24 home insurers
  • Unique value: Low pricing and great service for military and veterans

Read the full review

As in many other categories we've considered, USAA was the best low-cost option for veterans and service members who need to insure their home. Although its membership is limited to people who can prove a personal connection to the armed services, USAA combines an excellent reputation for customer service with rates that often beat other home insurers.

In our search for the cheapest home insurance rates, we found that estimates from USAA landed in the middle of the pack for each state we examined. The average annual premium for homeowners insurance with USAA was just under $1,300. Keep in mind that this number may be far from what you see in your own quote if your location, property structure and coverage limits are significantly different from the profile we used.

Even in states where USAA wasn't the absolute cheapest option for homeowners, we felt that the company's unbeaten NAIC complaint index of 0.15 more than made up for that fact. In addition, USAA offers a wealth of consumer-friendly options in other areas like deposit accounts and loans that make it a great place for qualifying members to consolidate all their finances.

Find the Cheapest Homeowners Insurance Quotes in Your Area

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How we found the cheapest home insurers

State regulations and geographic location have major effects on the business of selling home insurance. As a result, the cheapest option differs depending on where you live. Even in an industry that's dominated by a few major companies with national reach, the most affordable home insurance company in one state may be expensive or simply unavailable in others.

Because of these factors, we limited our goal to identifying the cheapest option among major home insurers who are available to homeowners in the five largest states. ValuePenguin's analysis used publicly sourced insurance rate filings obtained by Quadrant Information Services. We created a common profile to represent the average U.S. homeowner and used it to collect quotes from California, Texas, New York, Florida and Illinois. Our theoretical shopper was looking for a standard HO-3 policy to cover a home worth $200,000 — the national median value for owner-occupied properties.

What does this mean for our results? For anyone living in the other 45 states, it's entirely possible that you may find cheaper homeowners insurance from local companies we didn't survey. It also means that you may not have access to the insurers we've recommended above. Finally, the rates we discovered are best used for comparative purposes — your own quotes from these insurers may be different.

Chris Moon

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.