Homeowners who are current members of the military or veterans may want to get home insurance, either because it's a VA mortgage loan requirement, or simply to protect themselves financially. Fortunately, homeowners insurance companies offer a variety of policy benefits and discounts particularly suited to military families.
If you are on active duty, you should just take note that homeowners insurance policies may exclude certain portions of your coverage while you're deployed. However, by choosing the right insurer or adding an endorsement to your policy, you can ensure your coverage stays in place while you're deployed.
Home insurance requirements for VA loans
VA home loans require no down payment and typically have a lower interest rate than publicly available loans, but borrowers still must have homeowners insurance.
Homeowners who take out VA loans are required to have a policy with hazard insurance coverage that will pay for the cost to rebuild their home, should it be damaged or destroyed. The home insurance policy should cover, at minimum, the perils named in an HO-1 insurance policy, but you should consider adding greater coverage depending on the risks of the region you live in.
And if you live in a special flood hazard area (SFHA) designated by the Federal Emergency Management Agency (FEMA), you'll also need to buy flood insurance to qualify for a VA loan.
Lenders for VA loans usually require you to put your insurance payment in escrow as a safeguard to ensure that insurance payments are made promptly. How this works will vary depending on your lender, but you'll typically have to pay a certain amount — often 15 months' worth of insurance bills — up front as a buffer, then continue to make monthly payments to keep the balance.
However, VA loan recipients are not required to buy private mortgage insurance. Most of the time, when you open a mortgage with a down payment of less than 20%, your lender will require you to protect the mortgage with private mortgage insurance. But the federal government guarantees VA loans, meaning you are exempt from this requirement.
Which home insurance companies offer the best rates for veterans?
If you're on active duty, start by comparing quotes from companies like USAA that offer unique discounts and benefits for veteran homeowners.
Many homeowners insurance companies provide discounts or special rates just for people who have served in the military. Several military-specific insurance companies also offer low-cost policies specifically designed to fit the needs of active-duty and retired members of the military.
If you just need a basic policy, we recommend comparing quotes from military-specific insurers as well as those with veteran discounts, as each insurer has a different method of determining your rates.
Military-specific home insurance companies
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There are a number of military-specific insurance companies that tailor their policies and rates to fit the needs of members of the armed forces and their families. As these companies only provide services to people who have served in the military and their families, they do not provide an extra military discount.
However, annual rates from insurers that specialize in military families tend to be very competitive with other insurance companies' rates. As such, they are often the best homeowners insurance carriers for veterans or active service members.
USAA is an especially popular choice among people in the armed forces, as it offers a range of financial services, including banking and credit cards, in addition to home and auto insurance. The company offers many benefits that are well-suited for people in the military.
For example, USAA offers replacement cost coverage for all its homeowners insurance policies. Homeowners insurance policies from USAA also cover anything you bring with you while on active duty, including your uniform. And any claim you make for your uniform or military equipment while on active duty won't be subject to a deductible, meaning you'll be reimbursed for the full cost of the lost or damaged property.
Armed Forces Insurance also focuses on coverage for military members and delivers a wide range of optional coverage options:
- Replacement cost coverage for personal property
- Business property coverage
- Golf cart coverage
- Animal liability coverage
- Carports, pool cages and screen enclosures coverage
- Water backup and sump overflow coverage
- Earthquake coverage
- Flood coverage
Armed Forces coverage is cheaper than average, but the insurer does have the drawback of having more complaints than expected, given its size, which could point to issues with customer service. The company also has poor reviews from customers regarding claims payouts on the Better Business Bureau.
Veteran and military family home insurance discounts
Some insurers, like Farmers, also offer military discounts to current and former members of the military, although availability varies by state. Geico doesn't sell homeowners insurance directly, but many of the companies it partners with to offer homeowners insurance offer discounts of up to 15% to members of the military.
It only takes a few minutes to get a quote from each of these insurers, and the right quote can save you hundreds per year, so it's worth doing the legwork to find the best rate for which you're eligible.
Other discounts and ways for military families to save on home insurance
While not exclusive to veterans and their families, many insurers offer discounts to their customers that can stack up to boost, or even surpass, a military discount. For example, many insurers give you a discount if you bundle multiple insurance types, most commonly home and auto insurance, from the same provider.
You can also reduce your homeowners insurance rates by making certain upgrades to your home. The exact list will vary by your insurance company, but eligible upgrades could include impact-resistant roofs, burglar alarms and a sprinkler system.
Finally, you can reduce your monthly payment by increasing the deductible on your policy. However, this will result in increased costs should you ever need to make a claim, so weigh the pros and cons of doing so carefully.
Who is eligible for military-specific home insurance policies and discounts?
While the qualifications for discounts and benefits are fairly wide-ranging, there is no single definition of a veteran for insurance purposes — meaning every provider decides its own rules.
Criteria that can affect your eligibility for benefits include:
- Whether you are on active duty
- Whether you are currently deployed
- Whether you are a member of the National Guard or Reserves
- Type of discharge you received
- How closely you are related to someone who served (for family members)
As an example, USAA, one of the most common providers of insurance to military service members and their families, offers policies to:
- Active personnel
- National Guard and Reserve members
- Anyone honorably discharged or retired
- Members of U.S. military academies (such as West Point) or ROTC
- Family members of current or former USAA members, including spouses and children
The criteria insurance companies use to determine eligibility change periodically, so call your insurer to confirm you can get military rates on your home insurance. And keep in mind that these benefits are determined separately from legal benefits for veterans, such as subsidized education programs and VA medical care.
How being deployed can affect your homeowners insurance
There are two clauses that commonly appear in homeowners insurance contracts that impact people in the military, especially if there is a chance they will be deployed: an occupancy clause and a war zone exemption. Check for these clauses in your insurance contract before signing, and understand how each will impact your coverage should you be deployed overseas.
Most homeowners insurance policies usually have rules regarding occupancy. Someone must live in your home in order for it to be covered under a typical policy. If you are deployed and your home is vacant while you are away for a certain amount of time — usually 30 to 60 days — your policy may be void.
Ideally, you should check for this clause while choosing an insurance policy. Pick one without a vacancy clause or one that makes an exception for active military duty, if you can. Military-specific insurance companies are most likely to offer this. Otherwise, you'll have to get an extra endorsement that protects your home while it is vacant.
War zone exemption
The second clause to look out for is a war zone exemption. While most homeowners insurance policies cover your belongings no matter where you are in the world, many insurers have exemptions for war zones.
In other words, with this exemption in place, if something you own is damaged while in one of these designated areas, your homeowners insurance policy won't help you replace it.
Avoiding a war zone exemption is another reason to buy your policy through a military-specific insurance company like USAA.
ValuePenguin studied policy offerings from a range of insurers, as well as home insurance rates from the largest insurers in Texas.
Insurance rate data is provided by Quadrant Information Services. Rates were sourced from publicly available insurer filings and should be used for comparative purposes only.