Best Homeowners Insurance Companies of 2020 | Homeowners Insurance

Best Homeowners Insurance Companies of 2020 What Is Homeowners Insurance? A typical homeowners insurance policy

Best Homeowners Insurance Companies of 2020

A typical homeowners insurance policy will cover repairs to or reconstruction of your home if it is damaged by fire, smoke, theft or vandalism, or bad weather such as lightning, wind or hail. A standard homeowners policy also generally covers your appliances, furniture and other possessions, as well as medical expenses and legal fees if people other than you or your family are injured on your property.

Not covered in most standard policies are jewelry, artwork or other collectibles in your home, identity theft protection, or damage caused by an earthquake or flood. These types of coverage are generally optional but may not be offered by all insurers in all areas.

If flood insurance is not offered by your homeowners insurance company, you may be eligible for coverage through the National Flood Insurance Program, administered by the Federal Emergency Management Agency. NFIP policies are offered through independent agents nationwide. Costs and requirements can vary widely depending on risk factors where you live. FEMA’s website includes an interactive flood map that can help determine the risk in your area.

To determine whether you need additional homeowners insurance beyond what’s included in a standard policy, start with the most obvious factors. If you live in or are looking at homes in an area prone to earthquakes, wildfires or extreme weather, look for a policy that covers those types of events.

Next, think about what it would cost to replace major items such as a damaged furnace, water heater, roof or even your entire home. Talk to an independent insurance agent, call insurance companies directly or check company websites for guidelines. Inventory your possessions, including your vehicles, artwork and other valuables. Consider what it might cost to live with relatives, in a hotel or in a rental unit while your home is being repaired or rebuilt.

A basic rule of thumb is to make sure you buy enough coverage to replace your home and its contents. Be honest in your assessments and make sure that any policy you consider will be sufficient.

The cost of homeowners insurance can vary greatly depending on a wide variety of factors, primarily involving the age, size and location of your home, and the likelihood of a major weather event in your area.

“Location, location, location,” says Lynne McChristian, communications consultant at the Insurance Information Institute. “Where you live and the natural disasters afflicting that area play a big factor. Unlike real estate, the cost of homeowners insurance reflects the rebuilding cost of your property.” Not all homeowners policies include standard replacement cost coverage, so make sure to choose one that does.

Other factors that can affect homeowners insurance premiums include the age and condition of the roof, furnace and other major components; whether you have a security system or fire alarm; and the value of your possessions. An alarm system can lower your rates, while living in an area prone to floods can make insurance quite expensive. Collectibles such as art or jewelry can add to the cost or require additional coverage.

There are several other factors to consider when shopping for homeowners insurance. For example, know the difference between a cash-value policy and a replacement-cost policy. “The former pays the depreciated cost, so you get less at claim time. With replacement cost, you may pay 10-15% more for coverage, yet you get much more when you file a claim,” McChristian says.

You also should compare rates from different insurance companies every year even if you’re happy with your insurer, says Robert Hunter, director of insurance at the Consumer Federation of America.

“The biggest mistake consumers make is to not shop around, especially if you’ve been with the same insurance company for five years or more,” Hunter says. This is because companies sometimes raise rates for longtime customers. “They’ll give you a 5 to 10% loyalty rate after 10 years, but by then, you’re paying 20% more. They figure you’re not going anywhere,” he says.

Our analysis of 10 homeowners insurance companies found a wide range of basic rates. The rates we calculated were based on a family of four living in a two-story, end-unit town house in Naperville, Illinois, priced at $250,000. Expect your rates to vary.

Hunter also says it’s important to read your policy carefully and understand exactly what is and is not covered. If coverage for something you’re concerned about isn’t specifically mentioned, such as damage from a falling tree, ask for a written statement clarifying the issue. “If they want to sell you a policy, they’ll put it in writing,” he says.

Top Homeowners Insurance Companies of 2020

Amica

4.4 out of 5

Score

$117.00 Sample Monthly Cost
A+ A.M. Best Rating
See Review
USAA

3.9 out of 5

Score

N/A Sample Monthly Cost
A++ A.M. Best Rating
See Review
Amica

4.4 out of 5

Score

$117.00 Sample Cost
A+ A.M. Best Rating
See Review
USAA

3.9 out of 5

Score

N/A Sample Cost
A++ A.M. Best Rating
See Review

Any rates listed are for illustrative purposes only. You should contact the insurance company or insurance agent directly for applicable quotes.

Amica Insurance

Amica

Amica
Sample Monthly Cost
$117.00
Online Tools
Online Estimate

Any rates listed are for illustrative purposes only. You should contact the insurance company or insurance agent directly for applicable quotes.

Pros

  • Amica offers competitive rates

  • Some policies pay cash dividends

  • The company has excellent financial strength

Cons

  • Amica insurance is not available in all states

  • Amica doesn’t use local agents

Along with homeowners insurance, Amica sells insurance for renters and condo owners.

Amica’s financial strength rating: Amica has an A+ rating for financial strength from A.M. Best.

Types of customer support available: Amica offers 24/7 customer support by phone. Customers also can pay bills, update information, get an estimate or make a claim on the company’s website, and there’s a smartphone app.

What discounts are offered

  • Alarm system: Installing a fire alarm, burglar alarm or sprinkler system will get you a discount with Amica.
  • Automatic detection devices: Amica offers a discount for homes equipped with systems for monitoring temperature, or a gas or water leak.
  • New/remodeled home credit: Updating your home with new equipment or appliances could entitle you to reduced rates.
  • Multipolicy discount: Combining your homeowners policy with auto insurance or other coverage from Amica can entitle you to a discount.
  • Claim-free discount: Going three years without a claim can get you a discount.
  • Auto pay: Signing up for automatic deductions to pay your bill can save you money.
  • Loyalty: Amica offers a discount for customers who have been with an insurance company for at least two years, even if it’s not Amica.
  • E-discount: Amica will give you a price break for getting bills and notifications electronically.

Unique or useful policy features and customization options
Amica offers Platinum Choice, a package of extras that don’t come with a standard homeowners insurance policy. It includes, among other things, increased dwelling and personal property replacement coverage, increased personal liability coverage, and coverage for water backups and sump pump overflows, fraudulent credit card charges, electronic devices and business property.
Read More»

Erie Insurance

Any rates listed are for illustrative purposes only. You should contact the insurance company or insurance agent directly for applicable quotes.

Pros

  • Erie has the lowest rates in our analysis

  • Standard homeowners policies include replacement cost coverage

Cons

  • Insurance products limited to East and Midwest

  • No smartphone app is available

In addition to homeowners policies, Erie sells insurance for autos, motorcycles, boats and recreational vehicles, as well as an array of business insurance products, life insurance and retirement planning products. The company also offers insurance for condo owners, mobile home owners and renters.

Erie’s financial strength rating: Erie has an A+ rating from A.M. Best.

Types of customer support available: Erie can be reached by phone or through its website. Either can guide you to an independent agent in your area.

What discounts are offered

  • Multipolicy discount: Purchasing more than one policy from Erie, such as bundling your homeowners policy with auto insurance, can save you money. Specific savings will vary, but average around 20%.
  • Safety systems discount: Erie offers discounts for homes equipped with a fire alarm, burglar alarm or sprinkler system.
  • Advanced quote discount: New customers coming to Erie from another insurer may get a discount if they ask about a quote before their current policy runs out.

Unique or useful policy features and customization options

  • Guaranteed replacement cost: One of the primary advantages of a homeowners policy from Erie is that the company offers guaranteed replacement cost coverage with a standard policy, which covers the cost of rebuilding your home even if costs have gone up. This is a key benefit and could be especially important for owners of older homes or those located in neighborhoods where property values and costs have increased.
  • Service line protection: This covers you in the event of damage to a buried gas, electric, water or other service line.
  • Home business protection: if you run a business out of your home, this provides coverage for equipment and supplies associated with that business, which may not be covered by a standard homeowners policy.
  • Rental income protection: If you rent space in your home or have an apartment attached to your residence, this provides income protection if tenants have to move out because of a fire or other damage.

Auto-Owners Insurance

Any rates listed are for illustrative purposes only. You should contact the insurance company or insurance agent directly for applicable quotes.

Pros

  • The company has an A++ financial strength rating from A.M. Best

  • Auto-Owners offers some unique coverage.

Cons

  • Auto-Owners is unavailable in many parts of the U.S.

  • No earthquake coverage is available

  • Insurance is sold only through independent agents

Auto-Owners sells auto, life and business insurance in addition to homeowners insurance.

Auto-Owners’ financial strength rating: Auto-Owners has an A++ rating from A.M. Best.

Types of customer support available: Auto-Owners can be reached by phone or through its website.

What discounts are offered

  • Multipolicy discount: You can save on homeowners insurance with Auto-Owners by adding auto insurance, life insurance or other coverage at the same time.
  • Protective devices discount: Smoke detectors, deadbolt locks, fire extinguishers and other preventive safety systems can reduce your premium.
  • Payment history: Policyholders who have paid their bills on time for at least 36 months may be entitled to a discount.

Unique or useful policy features and customization options

  • Flood insurance: Flood insurance is not just for those living near a river or other body of water. It can also cover damage from failed appliances or swimming pools. This policy may be required by your lender or condo association.
  • Homeowners Plus: An enhanced homeowners policy, Homeowners Plus provides additional coverage that includes damage caused by a leaking appliance, increased limits for spoiled food after an electrical outage and more.
  • Service line coverage: This covers you in the event of damage to a buried gas, electric, water or other service line from digging or another cause.
  • Appliance seepage or leakage: Damage caused by a leaking appliance or interior sprinkler system can be covered.
  • Enhanced coverage: For more valuable homes, this provides up to 25% more coverage to repair or replace your home if needed, along with increased personal property coverage.

Common Homeowners Insurance Discounts

Homeowners Insurance Discounts

Amica
Multi-Product Savings
Loyalty Discounts
Home Security Discounts
Claim Free Discounts
Erie Insurance
Multi-Product Savings
Loyalty Discounts
Home Security Discounts
Claim Free Discounts
Auto-Owners Insurance
Multi-Product Savings
Loyalty Discounts
Home Security Discounts
Claim Free Discounts
Allstate
Multi-Product Savings
Loyalty Discounts
Home Security Discounts
Claim Free Discounts
USAA
Multi-Product Savings
Loyalty Discounts
Home Security Discounts
Claim Free Discounts

Homeowners Insurance Companies in My State

Companies by State

State

               
Alabama                
Alaska                
Arizona                
Arkansas                
California                

U.S. News & World Report (U.S. News) prepared this content about insurance companies for general informational purposes only. Neither U.S. News nor the individual writers of this content are licensed to sell or advise on insurance products. Some coverages, discounts and features may not be available in all states. For more information about any of the companies or products profiled herein, or to inquire about the purchase of insurance, please contact the insurance company, an insurance agent or a financial advisor. This content is not, and should not be considered to be, a recommendation to homeowners insurance products generally or an endorsement of a particular insurer or product. Any rates listed are for illustrative purposes only. You should contact the insurance company or insurance agent directly for applicable quotes.

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In addition to being the largest financial investment most of us will ever make, a home provides shelter and security for ourselves and our loved ones. If that isn’t enough justification for homeowners insurance, the odds are you’ll need to have it anyway. Most people finance their home, and lenders typically require homeowners insurance. If you’re looking at a condo or co-op, the association also may require it.

A homeowners policy typically covers damage from things like fire, smoke, theft and vandalism. It also covers legal fees and medical expenses fees if someone other than you or a family member is injured on your property, as well as damage from most weather-related events such as lightning, wind and hail. Most policies also cover water damage from leaking pipes or a failed water heater, furnace or air conditioner. It’s important to note that standard homeowners insurance typically does not cover flood or earthquake damage. That coverage may be available by purchasing a separate policy, depending on your insurer and where you live. Some companies will not provide flood insurance in areas known to flood.

Some policies cover homeowners who rent out a room or their entire home. Some basic policies may only cover your home and whatever decks or structures are attached to it, while excluding outbuildings such as a garage or shed. More comprehensive policies cover outbuildings without supplemental insurance.

Other optional coverages you may want to consider include business equipment if you work from home, musical instruments, jewelry, sports equipment or financial losses stemming from identity theft.

A common mistake when shopping for homeowners insurance is not buying sufficient coverage. For example, according to the Massachusetts State Attorney General’s Office, a homeowner should tell an insurance agent about any unique features like ornate woodwork or stained-glass windows that might not be addressed in a standard valuation to replace the home.

Common types of coverage

The following types of coverage typically are included in a standard homeowners insurance policy and are part of standard policies offered by all 10 insurers in our analysis. Speaking with an independent insurance agent or company representative can help determine appropriate coverage amounts.

  • Dwelling coverage: Covers the cost of repairing or rebuilding your home if it is damaged or destroyed by fire or other covered event. Standard policies typically include coverage for your dwelling and structures permanently attached to it, such as a garage or deck.
  • Other structures coverage: Includes buildings and structures not attached to the home, such as a detached garage, barn or shed, along with fences or walls.
  • Personal property coverage: Covers appliances, furniture and other personal property in your home.
  • Personal liability coverage: Covers bodily injury and property damage sustained by visitors at your home.
  • Guest medical coverage: Helps pay for medical expenses related to injuries incurred by visitors at your home.

There are other types of coverage you may want to consider based on your circumstances and budget. Depending on the insurer you choose, some of these may be included with a standard policy. Others may charge extra or not offer some types of coverage.

  • Loss-of-use coverage: Included in basic policies from many insurers in our analysis, but not all, this pays for things like dining out when you are not able to have meals in your home.
  • Identity theft protection: Can reimburse you for some or all of the expense of restoring your credit score and reclaiming your identity.
  • Valuable possessions coverage: Provides extra insurance for jewelry, furs, artwork or other collectibles. Most insurers don’t include it with a standard policy but offer it at additional cost.
  • Flooding or earthquake coverage: Optional with all insurers in our analysis and often quite expensive. Some insurers may not offer such coverage, depending on the insurer or location of your home.
  • Water backup coverage: Generally optional and covers you in the event of a sump pump or drain failure resulting in water damage.
  • Dwelling/personal property replacement: Included with some policies and optional with others, this provides additional insurance to cover current costs to repair or replace your home and its contents with comparable replacements and materials. This can be especially important for an older home or one that has dramatically increased in value.

meowners Insurance

When purchasing home insurance, you want to buy enough coverage to make repairs or rebuild in the same location. However, note that your bank or mortgage lender may only require you to have sufficient coverage to pay off your mortgage, not to repair or replace your home.

One way to determine rebuilding costs is to multiply the home’s square footage by the cost of construction per square foot in your area. A local real estate agent, builders association or your insurance agent should be able to provide these costs.

There are several ways to shop for a homeowners policy, including online or through an agent. Many insurers have websites that will provide a lot of background information and even allow you to purchase a policy if you prefer to do the legwork yourself. You can also work through an independent or captive insurance agent. An independent agent is usually affiliated with more than one insurance company and paid by commission, while a captive agent normally works for one company.

When comparing quotes and coverage options, it’s important to look at more than just what is and is not covered. Factors to consider include obvious things such as price, exclusions and coverage limits, and some less obvious considerations like a company’s financial stability.

How insurers determine your premium

Remember that the cost to rebuild your home is not the same as the purchase price, which includes the cost of the land. Moreover, labor and material costs vary by region, as do the logistics of getting materials to your location. An urban setting is likely to be more expensive than a suburban one, for example. Your insurance agent should be able to help determine these costs, along with the replacement costs for the contents of your home. The cost to rebuild also may be impacted by changes to local zoning laws, particularly if you live in an older home.

“If your home is more than 10 years old, you should ask your insurer about building ordinance and law coverage,” McChristian says. “Building codes change periodically, and if an older home is damaged significantly, it must be rebuilt to the current building code, which is typically more stringent.”

Whether your home is made of brick or wood will affect your rates as well. The premium is usually lower for brick and masonry houses than for those with wood frames. Proximity to resources and services such as a water source or fire department also can affect your rates, as can the quality of your community’s fire protection services. A wood stove or furnace may increase the likelihood of a fire and may also raise your rates.

The age and condition of your home is another important consideration. Premiums are often higher for older homes and those in poor condition. The claims history in your neighborhood and community is another factor, particularly for the homes closest to yours.

Other things that may raise your rates include what insurers sometimes regard as high-risk outdoor amenities, such as a swimming pool, trampoline or playground equipment that could cause injuries. Aggressive dogs or other pets regarded as dangerous can also raise rates.

How to apply for a homeowners policy

Once you have an idea of the types and amount of coverage you need, you’re ready to start shopping. Some questions you should ask an agent or company representative include:

  • What is and is not covered by the policy, and what are the limits to each part? Some policies may be a better fit in terms of dwelling coverage but may come up short in personal property coverage. Make sure you clearly understand what exactly is covered by each part of the policy.

  • What personal property is covered? Is that artwork you inherited from an uncle or the jewelry passed down from your grandmother included in your standard personal property coverage?

  • What types of water damage are covered, including mold? Water damage can take many forms, from a sudden flood to gradual damage caused over time by leaky plumbing hidden in a wall. Some policies won’t cover all types of water damage. Make sure you know the specifics before buying.

  • What is the claims history of the home I am considering? A home with a long history of claims may cost more to insure, especially if there have been multiple events such as break-ins or floods.

  • If I submit a claim, how will it affect my premium when I renew the policy? Don’t be afraid to ask if your rates are likely to go up after a claim, and by how much. Some insurers are more forgiving than others.

  • How will my credit history affect my premium? Your credit history can have a significant impact on your insurance rates. If your credit score is low, you may want to delay applying for a policy until you can pay off debt and improve it.

  • How much coverage do I need for my personal property? It’s not easy to take an objective look at your possessions and determine their worth or replacement cost, particularly if you’ve had things a long time. Furniture, appliances and clothing are easier to value, but collectibles and other items may require the assistance of an appraiser.

  • How much liability coverage should I buy? One rule of thumb is that you should have sufficient liability coverage to protect your assets. For example, if a standard policy includes $100,000 in liability coverage and you have $300,000 in assets, you should probably increase your liability coverage.

  • Should I buy flood insurance or earthquake coverage? Odds are if your home is in an area with a history of floods or earthquakes, you will be required to get appropriate insurance. Even if it is not required, it may be a good idea. Your insurance agent should be able to help make the call.

  • How do I choose a deductible amount? Determining an appropriate deductible requires assessing your risk tolerance, budget and finances. A higher deductible means you’ll have to pay more out-of-pocket for repairs, but it also results in a lower premium.

ology for Homeowners Insurance

The following describes our 360 approach to researching and analyzing homeowners insurance companies to provide guidance to prospective consumers.
1. We researched the companies and products people care most about.
U.S. News analyzed and compared a variety of publicly available data, including internet search data, to determine which homeowners insurance brands Americans are most interested in. We found 20 companies that stand out in terms of volume of searches and research among consumers, as well as across the different rating sources. Once we identified these companies, we reviewed the companies’ available homeowners insurance features offered at the time of publication.

We compared available coverages from top homeowners insurance companies across several criteria, including cost, coverage limits, policy features and availability. Research shows that these criteria are among the most important considerations to people shopping for homeowners insurance. We compared cost across different companies using an archetype that, as much as possible, represents a standard American home: a townhome in Naperville, Illinois, with an estimated market value of $245,000, equipped with a home security system and fire alarms, belonging to a non-smoking, four-person family with no pets. We built a standard plan that includes coverage for the home itself, personal property, personal liability, loss of use/additional living expenses and guest medical protection, with a $1,000 deductible and comparable coverage amounts.

2. We created objective 360 Overall Ratings based on an analysis of third-party reviews.
U.S. News’ 360 Reviews team applied an unbiased methodology that includes opinions from independent life insurance experts and third-party reviews.

Our scoring methodology is based on a composite analysis of the ratings and reviews published by credible third-party professional and consumer review sources. The ratings are not based on personal opinions or experiences of U.S. News. To calculate the ratings:

(a) We compiled two types of third-party ratings and reviews:

  • Professional Ratings and Reviews. Many independent life insurance evaluating sources have published their assessments of life insurance companies and products online. We consider several of these third-party reviews to be reputable and well-researched. However, professional reviewers often make recommendations that contradict one another. Rather than relying on a single source, U.S. News believes consumers benefit most when these opinions and recommendations are considered and analyzed collectively with an objective, consensus-based methodology.
  • Consumer Ratings and Reviews. U.S. News also reviewed published consumer ratings and reviews of life insurance providers. Sources with a sufficient number of quality consumer ratings and reviews were included in our scoring model.

Please note that not all professional and consumer rating sources met our criteria for objectivity. Therefore, some sources were excluded from our model.

(b) We standardized the inputs to create a common scale.

The third-party review source data were collected in a variety of forms, including ratings, recommendations and accolades. Before including each third-party data point into our scoring equation, we had to standardize it so that it could be compared accurately with data points from other review sources. We used the scoring methodology described below to convert these systems to a comparable scale.

The 360 scoring process first converted each third-party rating into a common 0 to 5 scale. To balance the distribution of scores within each source’s scale, we used a standard deviation (or Z-Score) calculation to determine how each company that a source rated was scored in comparison to the source’s mean score. We then used the Z-Score to create a standardized U.S. News score using the method outlined below:

  • Calculating the Z-Score: The Z-Score represents a data point’s relation to the mean measurement of the data set. The Z-Score is negative when the data point is below the mean and positive when it’s above the mean; a Z-Score of 0 means it’s equal to the mean. To determine the Z-Score for each third-party rating of a company, we calculated the mean of the ratings across all companies evaluated by that third-party source. We then subtracted the mean from the company’s rating and divided it by the standard deviation to produce the Z-Score.
  • Calculating the T-Score: We used a T-Score calculation to convert the Z-Score to a 0-100 scale by multiplying the Z-Score by 10. To ensure that the mean was equal across all data points, we added our desired scoring mean (between 0 and 10) to the T-Score to create an adjusted T-Score.
  • Calculating the common-scale rating: We divided the adjusted T-Score, which is on a 100-point scale, by 20 to convert the third-party rating to a common 0-5 point system.

(c) We calculated the 360 Overall Score based on a weighted-average model.
We assigned “source weights” to each source used in the consensus scoring model based on our assessment of how much the source is trusted and recognized by consumers and how much its published review process indicates that it is both comprehensive and editorially independent. The source weights are assigned on a 1-5 scale. Any source with an assigned weight less than two was excluded from the consensus scoring model.

Finally, we combined the converted third-party data points using a weighted average formula based on source weight. This formula calculated the consensus score for each product, which we call the 360 Overall Rating.

U.S. News 360 Reviews takes an unbiased approach to our recommendations. When you use our links to buy products, we may earn a commission but that in no way affects our editorial independence.

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