The Best Homeowners Insurance
More than just a low premium
If you own a home (or are about to buy one), congratulations! It’s an undeniable accomplishment, a major financial asset, and unless you’ve also got an eye on a luxury yacht, it will likely be your single biggest investment ever. That last part is an intimidating fact when so much that could go wrong is out of your control — storms, earthquakes, floods — but that’s why there’s insurance. The best homeowners insurance providers will have the perfect mix of financial strength, coverage options, and customer service to keep you satisfied no matter where in the claims-filing process you are. Our top pick, Amica Mutual, impressed us across the board.
Our Picks for Best Homeowners Insurance Companies
AllstateBest for First-Time Homeowners
State FarmMost Well-Rounded
TravelersBest for Green Homes
MetLifeHighest Standard Coverage
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If you’re new to home insurance, you might be surprised to learn it’s not just protection for the physical structure of your home, or even everything in it. Homeowners insurance policies also include liability coverage if you’re sued for damages or injuries to someone else — say your dog bit your neighbor, or someone slipped on your front steps. Between these two coverage types there are tons of options: You can raise or lower the dollar limits, choose how to set the replacement value of your possessions, and add on coverages.
If it’s starting to sound like you won’t know where to start, you’re not alone: 60 percent of US homes are underinsured, a 2013 study by Marshall & Swift/Boeckh found. That means the majority of homeowners don’t know what kind of coverage they should get and are actually at a greater financial risk than they need to be.
So in our quest to find the best home insurance companies, we paid close attention to the providers whose websites and customer service reps really break it down. We also looked for carriers whose financial strength is beyond a doubt, compared policy types, and dug into the single most important factor: customer satisfaction during the inherently unpleasant process of filing a claim.
How We Found the Best Homeowners Insurance Companies
We started with a list of 99 insurers from the Insurance Information Institute’s “Find an Insurance Company” tool, as well as from the websites of state insurance departments (insurance is regulated at the state level, so providers and coverage vary between states), and got started.
We looked for homeowners insurance providers with coverage in at least 35 states — and no special eligibility requirements.
For this review, we focused on the providers that are available to as many people as possible. There are plenty of regional insurers whose credentials stack up against the national providers and who’d we recommend you investigate. And, while it’s true that coverage from the same national company will vary from state to state, there’s evidence that large national carriers are better equipped to handle claims in the wake of a disaster by calling in emergency response vehicles. When a disaster hits, their rolling claims centers, which are outfitted with generators, satellite connections and agent workstations, can make all the difference in areas where power has been knocked out.
“Large national carriers are likelier to invest in emergency response equipment and technology, which gives them an edge. Self-contained mobile response vehicles allow claims adjusters to process claims right at the scene of the disaster. Having in-person access to your insurance company representatives in a time of need is very important.”
Special eligibility requirements also knocked out a handful of carriers, most notably USAA, which insures active and retired US military members and their families. USAA consistently draws high praise, so if you are eligible, we highly recommend considering it as an option.
21st Century, ACUITY Insurance, Alfa, Allied, American Family Insurance, American Reliable, Ameriprise Financial, Arbella Insurance, Assurant, Austin Mutual, Auto Owners Insurance, Badger Mutual, Century National, Chubb, CIG, Cincinnati Casualty, Country Financial, Direct Line Auto Insurance, Elephant Insurance, Erie Insurance, Esurance (Allstate), Farm Bureau, Figley Salz & Co., First Security, Gallant Insurance, GMAC Insurance, Grange, Grinnell, Hallmark Insurance, Hanover Insurance Group, Horace Mann Auto Insurance, Infinity Insurance Co., Kemper Corp., Kentucky Farm Bureau, Merastar, Merchants Insurance Group, Mercury General Insurance, MiddleOak, Midwest Mutual, Mutual, New Jersey Manufacturers Insurance, Northstar, NYCM Insurance, Pacific Specialty, Partners Mutual, Pekin, PEMCO Insurance, Penn National Insurance, Personal Express Insurance, Pioneer State Mutual, Premier, Quality, Rockford Mutual, Safety Insurance, Safeway Insurance, Secura, Selective Insurance, Shelter Insurance, Sublimity Insurance, Sutter, Tower, Tri, Utica, Viking Insurance, Wausau Insurance, West Bend Mutual, Western National, Westfield, State Consumer, USAA
The best had to have high Financial Strength Ratings from A.M. Best and either Standard and Poor’s, or Moody’s.
Since the whole point of insurance is to protect you financially, it’s vital that your carrier has enough money to pay out its claims — which, in the event of a natural disaster, can be sudden and massive. Plus, the provider you pick will most likely be your provider for a very long time (if not forever) and should be financially dependable for the long term.
The best way to compare financial solidity among carriers is to use Financial Strength Ratings from independent agencies. Among the major agencies, only A.M. Best focuses solely on insurance, so we required all companies to have a high rating from the firm. Then, because the Insurance Information Institute recommends getting ratings from two or more agencies, we decided to also require a high FSR from at least one of the two largest agencies: at minimum “very strong” (AA-) from Standard & Poor’s or “high quality” (Aa) from Moody’s.
AAA, AIG Property Casualty Company, American National Property & Casualty, California Casualty, Electric Insurance, EMC (Employers Mutual Casualty Co.), Encompass Insurance (Allstate), Farmers, Federated, GuideOne Insurance, Homesite (American Family)
Liberty Mutual, Markel American, Nationwide, Primerica, QBE Insurance Corporation, Safeco Insurance (Liberty Mutual), State Auto Insurance, The General Insurance (American Family), The Hartford
If carriers didn’t underwrite an “open perils” policy — the most popular type of homeowners insurance in the US — we nixed them.
Like most types of insurance, homeowners policies can be tailored to provide varying levels of protection. For freestanding, single-family dwellings, the chief difference in policy types is between named perils, which covers only the specific risks named in the policy, and open perils, which is the complete opposite. Even though not everyone will choose to insure their home with the comprehensive open perils policy, in order for an insurer to be named the best, it should offer it.
Ace Group (Chubb) HNW, American Modern, Foremost Insurance, Zurich Insurance Group
We cut out the middlemen.
Not every company that services homeowners insurance actually underwrites its policies. These companies don’t carry the risk and they don’t design their own policies. In fact, they’re simply brokers.
We ranked the final five contenders on how happy we’d be if they were our provider.
Because homeowners insurance is impossible to truly test without committing fraud (we couldn’t burn down a house to see who processed our claim the best), we rated the top five carriers based on other, less-fraudulent criteria.
Tools to help buyers find just the right coverage.
Shopping for a home insurance policy isn’t something anyone gets to practice a lot. You have to learn on the fly and there’s a ton of unfamiliar information to absorb, especially for first-time homeowners, so websites and reps had to be able to walk us through it. MetLife did the worst in this area; its website basically just says, “We have great homeowners insurance! Call an agent to find out more!” In contrast, Allstate and State Farm provide plenty of advice on choosing the right policy type and coverage limits, all while happily acknowledging you might not be a customer yet.
“Endorsements” are optional provisions that can be added to a policy at the owner’s discretion, including water backup coverage, which guards against damage from water or sewage flowing up from below-ground pipes, and extended replacement cost coverage, which increases the limit on your policy by 25–30 percent in case the materials needed to rebuild your home are more expensive than anticipated (such as when demand for them spikes following a natural disaster). The more endorsements offered, the more you can fill in any gaps an open policy specifically does not cover — the earthquake endorsement is a common addition in Los Angeles, for example.
It’s important to note that not every discount available will apply to every buyer — for instance, most companies offer a discount for “bundling” home and auto insurance, but if you already like your auto insurance, or you prefer to skateboard everywhere, who cares? In general, the most significant discounts were offered by everyone, but there were a few that stood out. Amica’s “new purchase” discount gives a small break to owners who are moving into their home for the first time (whether or not the home itself is new), and Travelers’ Green Home Discount knocks 5 percent off the premium price for owners of LEED-certified dwellings.
We turned to real-world data to supply this essential ingredient. J.D. Power’s annual U.S. Household Insurance Study included scores based on how well “customers rate the claims experience with their current homeowners insurance provider.” Consumer Reports also published data (for subscribers only) from nearly 10,000 survey respondents who filed claims from January 2010 to June of 2013, in which they rated their carriers on criteria including on-time payments and a problem-free claims experience.
Allstate and Amica were the standouts. Amica’s claims score from J.D. Powers and Consumer Reports was so far above the competition that it would’ve taken something unheard of to knock it from the top spot: a defunct website, maybe, or truly atrocious representatives. Allstate, on the other hand, had only a slightly above-average claims score, but we valued its robust educational tools, helpful phone interaction, and plethora of discounts so much that it took a spot in our top picks.
We didn’t factor in premium quotes.
Many people consider premium cost to be the most important element in choosing a homeowners policy. We disagree. While it’s true that everyone can save money by comparing individualized quotes, what’s most important is being fully covered in a worst-case scenario. What that coverage looks like varies greatly among regions, homes, and asset portfolios. If you and your best friend called all the same providers asking for quotes, there’s a good chance the lowest option for you would come from a different place than the lowest option for your friend — price is too individual. In short: There’s no universally cheapest carrier.
Our Picks for the Best Homeowners Insurance Companies
Best Overall - Amica
Amica has consistently been ranked among the top homeowners carriers by J.D. Power and Consumer Reports, due to its sky-high customer satisfaction with the all-important claims process. None of our other four finalists came anywhere close to Amica’s claims score.
Not only are Amica customers generally happy with the amounts they receive to cover losses, but also they report the most hassle-free claims experience of all the carriers who made our final cut. To top it off, Amica was the only insurer on our list to earn the highest possible financial strength rating from both A.M. Best (A++) and Standard & Poor’s (AAA), an elite marker to give policyholders added peace of mind.
Unlike Allstate and State Farm, Amica uses “direct writers” rather than agents to sell its products. This means that customers don’t have a one-on-one relationship with “their” insurance agent, but instead deal with a different Amica rep anytime they have a question, claim, or want to make changes to their policy (just like when you call your cellphone carrier). While this may be a drawback for customers who value a personal relationship with their agent, it’s really a matter of preference. Our phone calls to Amica were always answered promptly, by a courteous, knowledgeable rep, as were our Live Chats — a service only Amica offered among our finalists.
Amica was the clear winner for customer satisfaction and the only finalist with live online chat.
Best for First-Time Homeowners - Allstate
When it comes to educating prospective buyers about the intricacies of homeowners insurance, Allstate stands out. Its website has the most comprehensive education materials of any of our finalists — particularly impressive was an online “Common and Costly Claims” tool that lets shoppers type in their ZIP code to see the most common claims in their region, complete with average dollar amounts. It even has a startlingly realistic GoodHome home report that plays a Google Street View video of your home (or potential home) as it enumerates its risks.
Allstate also offered the most discounts, a full slate of available endorsements, and its phone reps clearly answered our specific coverage questions. In terms of claims satisfaction, it was a runner-up only to Amica, matching Travelers and State Farm and barely edging out MetLife.
Allstate’s helpful common claims tool lists the most common and most expensive claims in your ZIP code.
Most Well-Rounded - State Farm
State Farm tied for second in financial strength, claims satisfaction, and customer service, and would’ve ranked second overall if not for Allstate’s dazzling online education materials. State Farm’s excellent financial strength ratings (A++ from A.M. Best; AA from S&P) were second only to claims powerhouse Amica, and its open perils coverage had some of the best standard features we saw, including built-in provisions for water backup and building code upgrades. State Farm writes more homeowners insurance than any other carrier in America — worth noting if only because that speaks to its exceptional customer retention.
Other Carriers to Consider
Travelers tied with State Farm in every measure except the J.D. Power claims experience rating, and even there it was only one “power circle” behind. This is a very slight difference, and who knows — it could conceivably move up next year. Travelers is still a very solid option for home insurance, with superb Financial Strength Ratings from A.M. Best (A++) and S&P (AA), comprehensive coverage, and customer service that makes buying the right policy easier.
MetLife’s customer service left something to be desired, particularly its website, which devotes little more than a page to homeowners insurance. But it redeemed itself with a standard coverage offering that’s exceedingly rare in today’s market: guaranteed replacement cost coverage for both structure and contents. This means that if your home and everything inside are completely destroyed, your MetLife policy guarantees the cost of replacing them. Not many insurers even offer guaranteed replacement cost these days, much less as a standard coverage. We like it because it directly addresses the core principle of homeowners insurance: total protection against catastrophe. That said, there isn’t much difference between guaranteed replacement cost coverage and extended replacement cost coverage — which is available as an endorsement from all our other finalists.
Find the best homeowner insurance in your area.
Get a quote by entering your ZIP code and start saving today.
Did You Know?
Homeowners insurance protects more than just your home.
One of the biggest misconceptions about homeowners insurance is that it covers only the physical structure of your home. In fact, a standard policy should cover all six of the following:
Dwelling (also called Coverage A). This includes the main building, and its plumbing, heating, and air conditioning systems, against damage from outside forces.
Other structures (or Coverage B). This pays for damage to fences, sheds, garages, guest cottages, and any other structure not connected to your house.
Personal property (or Coverage C). This reimburses you for lost, stolen, or ruined possessions such as furniture, electronics, and clothing, even when they aren’t on your property. You can choose to insure them for their actual cash value (the original value, less depreciation) or their replacement value (what it costs to buy a replacement in similar condition).
Loss of use (or Coverage D). This pays for your living expenses during the time you’re unable to live in your damaged home.
Liability (or Coverage E). This covers your financial loss if you or anyone in your family is sued for damages or injuries to someone else. The event does not have to happen on your property. Increased limits for liability coverage — important if you own valuable assets that could be targeted in a lawsuit — can be added on as “umbrella coverage.”
Medical payments to others (or Coverage F). This is intended to pay for relatively minor medical bills resulting from an injury, like if a friend cuts their finger while helping you make dinner.
You’re probably underinsured.
If you already have homeowners insurance, there’s a 50-50 chance you’re underinsured. Many people mistakenly insure their home based on the amount they paid for it, when the true cost of rebuilding is significantly higher. “If you have a mortgage, your lender may only require you to purchase a policy with enough coverage to protect their interest — particularly if you have a low balance,” says Christina Moore, a compliance and risk management VP at SWBC. “But in the event of a substantial or total loss, the cost of rebuilding your property could be much more, leaving you with potentially large out-of-pocket expenses.”
Your coverage should be enough to rebuild the structure in the event that it’s totally destroyed, even if prices for supplies go up following a disaster. To get a rough idea of what you need, multiply your home’s square footage by the prevailing cost of building materials in your area.
Very valuable items need their own special endorsements.
Everything in your home – including your fine furs, your original art, and your heirloom jewelry — is covered by your standard policy only up to a specific dollar amount. To insure your most valuable possessions for their full replacement value, you’ll need to purchase a special endorsement for their official appraised value. In insurance-speak this is called “scheduling” valuables.
Flood insurance isn’t part of a standard homeowners policy.
Insurance for flooding that happens as a result of a storm and not from a pipe bursting or sewage backup is not covered by your homeowners insurance. Instead, it’s available in a separate policy from the National Flood Insurance Program (NFIP). The financial risk is carried by the federal government, so it sets the price for your area. Even if you don’t live in a floodplain, it’s a good idea to consider flood insurance: The Insurance Information Institute cites it as the most common and costly natural disaster in the United States.
Homeowners insurance covers disasters; home warranties cover mechanical breakdowns.
Homeowners insurance is there to protect you from financial ruin in the event of a disaster, not to cover normal wear and tear. A home warranty, by contrast, covers the mechanical breakdown of systems in the home like plumbing and electricity. Sound like something you want? We’ve done a home warranty review too.
The Bottom Line
Amica Mutual earned our “Best Overall” badge by excelling in every major area: financial strength, customer service, and claims experience. The most important aspects of homeowners insurance are getting the right amount of coverage followed by a painless claims experience. A cheap premium isn’t worth much if you have to beg for your coverage when you need it.
Best Homeowners Insurance: Summed Up
Highest Standard Coverage
Calculate your home’s reconstruction cost. In the event of a disaster, it’s vital that the amount of coverage you have is right — that’s what is going to pay for your repairs and/or a full rebuild. Your coverage limits for personal belongings and other structures are related to the amount of coverage on your dwelling, so you’ll have better protection for all your property if you lift your dwelling limit.
Catalogue your belongings. “I recommend that people create video evidence of all their belongings, as well as the inside and outside of their home,” says Jeffrey D. Diamond, adjunct professor of insurance law at Georgia State University College of Law. The Insurance Information Institute also offers a free online tool that makes it easy to remember everything you need to catalog, and then keep it stored online. “The more ways in which you can establish and prove the features of your home, as well as the quality and quantity of your personal property before a loss occurs,” Diamond adds, “the better your homeowners insurance coverage will serve you at the time of need, if and when the need arises.”
Get a few quotes by phone. “Calling around to obtain quotes will take some time, but it is worth it to compare coverage and rates,” says Moore. Unlike auto insurance quotes, homeowners insurance quotes are more accurate when you call. The online tools are attractive because they make it appear easy to compare quotes from multiple carriers at once, but they often oversimplify in their information collection. For instance, you might be eligible for a discount from a certain carrier that wasn’t factored into the comparison, or you might want a specific endorsement it didn’t ask about. Call, go through each carrier’s specific questions, and then you’ll receive quotes that are worth comparing.
Find the best homeowner insurance in your area.
Get a quote by entering your ZIP code and start saving today.
The Best Homeowners Insurance by State
Every state has different insurance providers, as well as unique circumstances that affect policies and coverage. We’ll be reviewing the five largest providers in every state using a methodology similar to the one for this review on nationwide providers. Check back soon to see if your state has been reviewed yet.
More Homeowners Insurance Reviews
We’ve been digging deep into homeowners insurance for several years now, and have published additional reviews. However, we haven’t finished updating them to be consistent with our latest round of research. Be on the lookout for updates in the upcoming weeks.
- Renters Insurance Review
- Cheap Homeowners Insurance Review
- Allstate Homeowners Insurance Review
- Amica Homeowners Insurance Review
- Farmers Insurance Homeowners Insurance Review
- Liberty Mutual Homeowners Insurance Review
- Progressive Homeowners Insurance Review
- Safeco Homeowners Insurance Review
- State Farm Homeowners Insurance Review
- Travelers Homeowners Insurance Review