When comparing homeowners insurance, you should consider price, coverage and customer service.
Although one company might have cheaper quotes, its coverage might not be right for you. Quotes are always free. Just share some information about you and your home, and insurance companies will give you rates you can compare.
There are four steps that you should follow when shopping for homeowners insurance: compare coverage options, get home insurance quotes from multiple companies, compare customer service reviews, and buy a policy.
State Farm has the best homeowners insurance rates, compared to other national companies.
Erie offers the cheapest home insurance quotes overall. But it's only available in 12 states and Washington, D.C.
Company | Annual rate | ||
|---|---|---|---|
| Erie | $1,244 | |
| State Farm | $1,363 | |
| Allstate | $1,369 | |
| Nationwide | $1,390 | |
| Farmers | $1,475 | |
\/*USAA is only available to military members, veterans and their families.
If you have car insurance, make sure you compare quotes from your current insurance company, too. Most companies offer a discount for bundling auto and home insurance, which could save you up to 25%.
Insurance companies may ask for a lot of information about you and your home to give you an accurate quote. Be prepared with the following information to make the process as easy as possible.
Personal info
House info
Other info
Companies use this info to decide how much you'll pay for insurance. That's because it affects the chance that you'll have to make a claim and how expensive that claim could be. For example, a 20-year-old roof is more likely to leak during a storm than a 2-year-old roof.
Where you live affects your home insurance rates. This is partially because climate and weather can cause a lot of damage to your home.
For example, homeowners in Florida pay some of the highest rates in the country, with an average price of $2,207 per year, in part because of regular hurricanes.
That's one reason why the cheapest home insurance company in your state may not be the same as the cheapest company overall. In fact, the most affordable company overall, Erie, only has the cheapest rates in one state — Wisconsin.
State | Cheapest company | Annual rate |
|---|---|---|
| Alabama | Farmers | $817 |
| Alaska | Country Financial | $948 |
| Arizona | State Farm | $916 |
| Arkansas | Shelter | $863 |
| California | Travelers | $1,116 |
Even within a state, rates can vary widely. Your home insurance could be more expensive than the state average if your ZIP code has more claims, higher crime rates or severe weather events.
ZIP code | Annual rate |
|---|---|
| 02148 | $1,346 |
| 02155 | $1,385 |
| 02301 | $2,000 |
Rates are for the most populated ZIP codes in the U.S.
Good customer service plays an important role in helping you get your life back to normal quickly after a disaster.
USAA, Erie and State Farm have the best-rated customer service, based on J.D. Power customer satisfaction ratings, the National Association of Insurance Commissioners (NAIC) complaint index and ValuePenguin's own editor's ratings.
Company | J.D. Power
?
| NAIC
?
| |
|---|---|---|---|
| USAA* | 882 | 0.20 | |
| Erie | 835 | 0.09 | |
| State Farm | 835 | 0.32 | |
| Auto-Owners | 832 | 0.12 | |
| Nationwide | 812 | 0.16 | |
*USAA is only available to current and former military members and their families.
Customer service is an important part of what you're paying for with home insurance. A major storm or fire will already disrupt your day-to-day life. It could even require you to move out of your home for weeks or months. Great customer service will make the claims process stress-free and get you back in your home more quickly.
Every insurance company has positive and negative qualities. When comparing homeowners insurance companies, it's important to decide which features are the most important to you.
Before you compare homeowners insurance quotes, you'll need to figure out how much insurance you need.
Dwelling
Coverage A: Dwelling
Other structures
Coverage B: Other structures
Personal property
Coverage C: Personal property
Loss of use
Coverage D: Loss of use
Personal liability
Coverage E: Personal liability
Medical payments
Coverage F: Medical payments
Many companies also offer coverage upgrades for an extra cost.
Basic home insurance policies are fairly similar. However, there are a few options that you should understand so that you can make an informed decision.
Deductibles
Your home insurance deductible is the amount you'll pay toward repairing or replacing items after a claim. For example, if you had a $1,000 deductible and had to replace your roof for $10,000, the insurance company would write you a check for $9,000.
Your deductible can range anywhere from $500 to $5,000, and the amount you choose directly affects your insurance quotes.
Choosing a low deductible will raise your insurance cost. A higher deductible will result in cheaper rates.
It's important to choose your deductible based on how much you feel comfortable spending in an emergency.
Policy types
The most common home insurance policy types are HO-3 and HO-5. The main difference between these options is that an HO-5 policy includes more protection for your personal property.
HO-5 policies offer more coverage, so they're typically more expensive.
HO-3 policy
An HO-3 policy lists all of the types of damage your belongings are protected against. If your stuff is ruined and the cause isn't listed on your policy, you can't make a claim.
This is also known as a named perils policy.
HO-5 policy
An HO-5 policy only lists hazards your belongings are not protected against. An HO-5 policy has broader coverage, so your things are protected against most types of damage.
This is also known as an open perils policy.
Actual cash value vs. replacement cost
There are two common types of coverage that insurance companies offer for personal property: actual cash value and replacement cost.
Not all homeowners benefit from the extra protection offered by replacement cost coverage. But the added cost may be worth it if you care about having brand new items.
Actual cash value quote:
$2,239 per year
Replacement cost quote:
$2,365 per year
These factors can make a big difference when it comes to the cost of your home insurance.
It's important to understand what's included in your quote so you can make an apples-to-apples price comparison.
Home insurance quotes can look different from one company to the next. The coverage types and limits you choose affect your quote, so you'll need to make sure that each quote meets your needs.
For example, a home insurance quote from Allstate is $4,726 per year. It's much more expensive than the quotes from Liberty Mutual and AAA, but it also includes a lot more coverage.
Editor rating
Annual rate:
$4,726Editor rating
Annual rate:
$881Editor rating
Annual rate:
$430It's also very important to look at the deductible on your quote.
The AAA and Liberty Mutual quotes both have a $1,000 deductible. However, the Allstate deductible varies depending on the cause of damage to your home. Damage caused by wind or hail has a $5,715 deductible, and tropical cyclone damage comes with an $11,430 deductible. So if you choose the Allstate policy, you'll have to pay a lot more to repair your roof if your shingles blow off in a storm.
The last step in comparing home insurance quotes is choosing the right company for you and getting a policy.
To decide on the right home insurance company for you:
Once you've chosen a company, pick a coverage start date. If you currently have insurance, the date you choose should be before your current policy's cancellation date. Otherwise, you'll have a lapse in coverage.
Most major insurance companies allow you to pay for your policy online using a credit card or bank transfer. Many times, insurance companies will offer you a discount for paying your balance in full or signing up for automatic payments too.
If you have a mortgage, you'll need to let your lender know the details of your new policy. If you have an escrow account, you'll also need to coordinate the payment details with your lender.
The average cost of home insurance in the U.S. is $1,516 per year, or $126 per month.
State Farm offers a great balance of low rates and good customer service, and it's available to most homeowners across the country. But the best home insurance for you depends on what you need in a policy.
To find the best homeowners insurance rates, compare quotes from multiple companies. Homeowners should also make sure they're taking advantage of available discounts.
For example, consider bundling home and auto policies. And let your insurance company know if you have a security system, fire safety devices or an impact-resistant roof.
Erie has the cheapest home insurance rates, with an average of $1,244 per year. Unfortunately, Erie is only available in 12 states, so many homeowners can't take advantage of its low prices. People who live outside of Erie's coverage area should consider State Farm.
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To find the best cheap homeowners insurance, we compared quotes from top companies in every residential ZIP code across the country. Dwelling coverage is based on the median home age and value for each individual state. For example, our California sample home was built in 1975 and insured to a value of $505,000. Meanwhile, our sample West Virginia home was built in 1974 and insured for $119,500. We used median home values to approximate the rebuild cost in each state.
Quotes also include $100,000 of personal liability coverage, $5,000 of medical payments coverage and a $1,000 deductible.
To illustrate the difference in cost between actual cash value and replacement cost coverage, we gathered quotes from five top companies across every ZIP code in Texas. Quotes are based on $150,000 of dwelling coverage.
ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.
