Cheapest Homeowners Insurance Companies

For most of us, a home is more than a place to live – it represents the biggest investment many of us will make. Beyond the financial implications, a home is packed with possessions and memories. That’s why choosing the right homeowners insurance policy is so important.

How Much Is Homeowners Insurance?

Our data shows that homeowners insurance costs can vary widely by insurance company, even when getting quotes for identical coverage. For our sample home, we found a broad range of average monthly rates, from a low of $88.83 with State Farm to a high of $264 with Allstate.

Different carriers charge different insurance rates, but how cheap home insurance can be also depends on factors about your home itself. Your ZIP code is a predictor of the average cost you'll pay. Companies know the value of homes there, how many claims are placed in your area, and if you have a professional fire department nearby, as the Insurance Information Institute (III) points out. Older houses usually cost more to insure because they can be more disaster-prone, and you can often get discounts by having a new or newly renovated home. Larger, more expensive houses are usually costlier to insure, since they cost more to replace.

You may not want to pick your address based on potential insurance costs, but you can take other factors into consideration to lower your premiums. Higher deductibles, if you can afford them in the event you file a claim, can help you save on premiums. So can bundling your homeowners insurance with other insurance policies, such as an automotive policy. On the other hand, add-ons to your policy covering additional risks like earthquake damage, water backup, or personal liability will raise your premium. Shop to find the insurance you need at a price you like.

How to Save on Homeowners Insurance

While homeowners insurance is essential, you don’t want to overpay for it. Fortunately, there are several ways to keep your premium as low as possible.

• Bundle your coverage. Many insurance companies will give you a discount if you bundle your homeowners insurance with your car insurance or another kind of policy. 

• Raise your deductible. If you’re willing to pay a higher deductible when you make a claim – for instance, $2,000 vs. $500 – your monthly premium will drop. Be sure to choose a deductible you can afford to pay if you need to file a claim.

• Add security features. You may have the safety basics covered in your home, such as installing smoke alarms and deadbolt locks. However, you might save more if you add features like a security system, fire sprinklers, storm shutters, or reinforced glass. 

• Keep your credit history clean. Most states allow insurers to consider your credit history, assigning a credit-based insurance score. If you’ve struggled with on-time payments or maxing out your borrowing limits, your insurer may raise your premiums because you’re a riskier customer.

• Ask about other discounts. Some potential price breaks aren’t as obvious. For example, your insurer may lower your rate simply because you agree to pay your yearly premium in full, choose energy-efficient appliances, or have been a customer for several years.
  
• Don’t add an “attractive nuisance.” Common backyard features such as pools, trampolines, or playgrounds can lure kids onto your property, where they may sustain a costly injury. This can be expensive for you in the long run.

Factors That Could Impact Homeowners Insurance Costs

Several factors influence the cost of your homeowners insurance. You may be able to address some of these issues to save on your premiums, but others may be beyond your control.

Location

Your home’s location is one of the largest factors in determining your homeowners insurance rates – and among the hardest to change. For instance, you’ll pay more if you live in an area at higher risk of crime or weather-related disasters (like hurricanes), or less if you live close to a fire station.

Your home’s value

Do you live in a sprawling new build? A modest ranch? The more your insurer thinks it’ll cost to rebuild your home, the more you’re likely to pay.

Level of risk

The price of your homeowners insurance will also reflect how “risky” your insurer thinks you are – that is, whether you’re more or less likely than the average Joe to file a claim. A good credit history may signal less risk. Being married can also work in your favor. Insurers also look at how many claims you’ve filed in the past – the fewer past claims, the better.

Home features

Insurers will consider home features that signal more or less risk. For example, swimming pools and trampolines may increase the chance someone is injured on your property. Insurance companies may also consider if you have an older heating, plumbing, or electrical system, as they risk breaking down sooner rather than later.

By contrast, features like a home security system, sump pump, or smart technology detection can save you on your monthly premiums.

What Does Home Insurance Cover?

A home insurance policy provides coverage to repair or replace your home and its contents following damage caused by fire, smoke, water, theft, vandalism, a storm, or some other event named in the policy. These are called perils.

In addition to covering the structure and outbuildings, standard policies typically cover the repair or replacement of heating and cooling systems and their components, such as a furnace or water heater, if they are damaged by a covered event.

Homeowners insurance also covers in-home personal property that's damaged, stolen, or destroyed. Finally, homeowners insurance pays for medical and legal expenses if someone other than you or your family is injured on your property.

Learn more about what home insurance does and does not cover.

What Homeowners Insurance Doesn’t Cover

Be sure to read the fine print before you purchase an insurance policy, as there are a few common issues that homeowners insurance won’t cover.

Wear and tear

Most commonly, insurance won’t cover issues arising from typical wear and tear or costs that stem from a lack of home maintenance. This could include damage triggered by an aging roof or failure of a heat pump with filthy coils. Pests such as rodents and termites may also fall into this category, as some insurers view infestations as preventable with routine treatment.

Flood, earthquake, or water back-up

While homeowners insurance typically takes care of damage related to storms, it may not when it comes to earthquakes and floods – unless you have separate policies covering these events. Water damage from clogged storm drains or failed sump pumps is commonly excluded from standard coverage, but it may be offered as an add-on.

High-value items

Certain personal property items only receive minimal coverage under a standard homeowners insurance policy. High-value items, such as jewelry or firearms, might be covered up to a certain amount; however, you may have the option to extend that coverage for an additional fee.

Potentially dangerous property

Most standard homeowners insurance policies will cover injuries sustained by others on your property. Still, some may exclude those inflicted by certain dog breeds or animals with a history of biting. Insurers may also exclude coverage from dangerous items, such as a trampoline or swimming pool. You may need to shop around or add separate coverage to cover these risks.

How To Get Cheap Homeowners Insurance

Although most consumers dread searching for new homeowners insurance, finding the best policy for the best price takes time and research. It may sound appealing to simply select the quote with the lowest cost, but cutting corners where coverage is concerned is not always advisable. However, that doesn’t mean that affordable options aren’t available.

In general, consider the following questions as a starting point:

1. What type of policy do you need? What perils (e.g., fire, lightning, theft, vandalism, etc.) do you want to insure against? What type of home (e.g., single-family, multi-family, condo, mobile home, etc.) are you insuring? Do you need specific coverage for floods and earthquakes? Depending on your answers to the last two questions, you may need a different type of insurance coverage other than a homeowners policy. 
2. How much coverage do you need? Do you want replacement cost coverage or actual cash value coverage? How much will it cost to rebuild your home and replace your personal property in the event of a total loss like a fire? What additional coverages (e.g., water backup, equipment breakdown, service line, etc.) do you need? Do you have expensive items like jewelry, firearms, artwork, or antiques that may be excluded from traditional coverage? Do you have a lot of assets that need to be protected in the event of a lawsuit arising from your ownership and maintenance of your home? 
3. Do you want to work with an independent insurance agent, a captive agent, or a company that does not use agents? Agents can typically help you navigate the questions above and advise you on coverages best suited for your family and assets, but some companies do not employ agents and allow policyholders to solely manage their insurance. Narrowing down who you want to work with will help you identify who to reach out to for quotes. 

Once you’ve identified your needs, reach out to various companies or agents to request a quote. Since rates and premiums can vary between insurers for both the same amounts and different amounts of coverage, the Insurance Information Institute recommends receiving and comparing at least three different quotes. Some companies offer online quotes, while others require you to contact an agent or the company directly.

Before selecting a company and policy, make sure the quoted premium is as accurate as possible. Is it using your specific information (e.g., insurance score, applicable discounts, marital status, etc.)? Is it taking your past claims history into account? Is it covering everything you need at a sufficient limit? You don’t want any surprises when you receive your first invoice or if you have to file a claim in the future.

Why You Can Trust Us: 15 Homeowners Insurance Companies Researched

At U.S. News & World Report, we rank the Best Hospitals, Best Colleges, and Best Cars to guide readers through some of life’s most complicated decisions. Our 360 Reviews team draws on this same unbiased approach to rate the products that you use every day. To build our ratings, we researched more than 15 homeowners insurance companies and insurance agencies and analyzed 11 reviews from both professionals and consumers. Our 360 Reviews team does not take samples, gifts, or loans of products or services we review. All sample products provided for review are donated after review. In addition, we maintain a separate business team that has no influence over our methodology or recommendations.

The following describes our 360 approach to researching and analyzing homeowners insurance companies to guide 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 companies and agencies Americans are most interested in. We found 15 homeowners insurance companies and agencies that stand out in terms of volume of searches and research among consumers, as well as across the different rating sources.

We then compared the available homeowners insurance companies and agencies across several criteria, including standard cost, dwelling and structure coverage, identity theft protection, valuable possessions coverage, and available discounts. Research shows that these are the most important criteria for people shopping for a homeowners insurance company.

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 professional reviews as well as consumer 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 homeowners insurance evaluating sources have published their assessments of homeowners insurance companies and agencies and their policies 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 homeowners 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 and agency’s score compared 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 or agency, 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.