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By Danika Miller, Staff Writer

The Best Cheap Homeowners Insurance Companies

Purchasing homeowners insurance may feel like a necessary evil — yes, it’s another bill, but it does protect your most valuable asset in the event of calamity. To find the best cheap homeowners insurance companies, we balanced the craving for low premiums with the need for good customer service, ample coverage, and financial stability. Our favorite home insurance companies offer abundant discounts to slash prices without slashing protection. To find the best — and cheapest — for you, we recommend gathering quotes from all seven.

The 7 Best Cheap Homeowners Insurance Companies

Amica Homeowners Insurance — Best Customer Ratings


Best Customer Ratings
Amica

Amica

Pros
Excellent customer service
Ample discounts
Unique dividends policy
Cons
Limited online resources
High premiums

Why we chose it

Excellent customer service

Amica is the only company besides USAA to earn all five power circles from J.D. Power in each of the six survey categories: overall satisfaction, policy offerings, pricing, billing and payment, interaction, and claims. Amica is also the only company aside from USAA to receive such a high rating in price, which means you have the highest chance of being satisfied with the cost of your coverage plan. In addition, Amica received top marks from Consumer Reports in all aspects of the survey, including agent courtesy, the simplicity of the claims process, and how long it took for claims to be paid.

Ample discounts

Amica is second only to Allstate in terms of discount quantity. Notably unique is its paperless bill discount, which can save you both work and money, as you won’t have to mail in your check every month. The only other provider in our top picks that offered this was Liberty Mutual. You can also take advantage of a full gamut of standard discounts for security and safety — things like owning or installing fire extinguishers, sprinklers, and fire alarms.

Unique dividends policy

On top of traditional price cuts, Amica offers policyholders the chance to actually make money through their house insurance. Because it’s a mutual company, Amica is member-owned, not investor-owned, and pays dividends to policyholders, not stockholders. If you opt for a dividends policy and the company does exceptionally well financially at the end of any given term, you stand to receive a payback between 5% to 20% of your annual premium.

Points to consider

Limited online resources

You won’t find extensive information or resources on Amica’s website. The company’s site is pretty simple, with just a few pages of basic info about its products. Unlike Allstate, you won’t have access to tools and guides to help educate yourself about insurance. You can get an online quote, but because of the bare-bones nature of the website, we’d recommend calling.

High premiums

Premiums tend to be slightly higher for mutual companies, and that rings true for this provider. But with Amica’s ample discounts and the potential for dividends, it still might be your cheapest option.

Allstate Homeowners Insurance — Best for New Homeowners

Best for
New Homeowners
Allstate

Allstate

Pros
Expansive online tools
Extensive endorsements
Cons
Mediocre customer service

Why we chose it

Expansive online tools

Allstate stands out for its comprehensive educational tools — it’s a great resource for new homeowners, or anyone who doesn’t like to buy anything without full knowledge of the space. With a robust guide filled with general homeowners insurance information, Allstate lets you arm yourself with everything you need to know. You can even get a personalized walkthrough of insurance-relevant stats for your specific address using Allstate’s GoodHome tool, which displays home details like market value, energy costs, and average repair costs of the most common hazards in the area (like fire or water damage). It also suggests tips for easing costs and choosing coverage.

Extensive endorsements

Another feature that made Allstate stand out from the rest of our top picks was the massive amount of optional coverages available. These include everything from your standard endorsements like identity theft restoration and expanded coverage for landscaping to more unique ones like a green reimbursement option and coverage for your musical instruments. The only other provider on our list with more endorsements was Nationwide.

Points to consider

Mediocre customer service

You may get a cheaper quote from Allstate, but customers have mixed views as to whether they’re getting their money’s worth. J.D. Power gave Allstate three out of five in all fields, including interaction with agents and the overall claims experience. These fair rankings were also reflected by Consumer Reports' analysis of the customer experience, like agent courtesy and the time it took for payments to be received. But if price truly is the most important factor to you, Allstate may very well offer you the cheapest quote.

State Farm Homeowners Insurance — Most Personalized Quote


Most Personalized Quote
State Farm

State Farm

Pros
Detailed online quote
Excellent financial strength
Cons
Few advertised discounts

Why we chose it

Detailed online quote

State Farm scored only a hair higher than Allstate when it came to Consumer Reports; however, like Allstate, State Farm scored three out of five across all factors by J.D. Power. State Farm scored best in damage amounts and policy offering categories, likely because it has the most thorough online quote process. You’ll need a binder full of details about your home to get a quote — with information as specific as the number of corners in your home’s frame. The quote process includes a 360Value tool that helps you calculate the Estimated Replacement Cost of your home, complete with detailed pictures to help you determine whether your interior cabinets are “Custom” or “Standard.” All this works together to give you an online quote that you can feel confident in.

Excellent financial strength

We required a strong financial outlook for all our top picks, but State Farm stood out for receiving the highest possible rating from A.M. Best (A++), as well as top scores from S&P Global (AA) and Moody’s (Aa1). These high scores indicate that the company is able to pay out its claims, even in disaster circumstances where many customers are filing claims.

Points to consider

Few advertised discounts

When it comes to saving on your investment, State Farm does offer discounts, but they’re standard and fairly limited. Home additions like sprinklers, fire extinguishers, and alarms will get you a price break. But if you’re a new homeowner or if you've recently renovated, it might pay to shop elsewhere. You won’t have any luck with discounts for enrolling in autopay, being retired, or sticking with State Farm for the long term.

Liberty Mutual Homeowners Insurance — Best for Inflation Protection

Best for
Inflation Protection
Liberty Mutual

Liberty Mutual

Pros
Inflation protection
Lots of discounts
Cons
Unexceptional claims process

Why we chose it

Inflation protection

We were impressed with the inflation protection offered by Liberty Mutual. Simply put, Liberty Mutual will automatically adjust your coverage limits in order to take inflation into account. A lot of houses on the market sell at a much lower cost than it took to build them. As a result, it’s easy to fall into the trap of insuring your home for the price you paid rather than what it will actually cost to rebuild. Add to that the overall increase in the value of your property, and you start to see the problem. However, Liberty Mutual’s inflation protection helps to guard against this financial faux pas while also granting a discount on your policy premium.

Lots of discounts

Like State Farm, Allstate, and Amica, Liberty Mutual doesn’t skimp when it comes to discounts. The provider features some pretty standard ways to save, including discounts for having multiple policies, opting into autopay, and being claim-free. There’s also a military discount, which we didn’t find with any of our other top picks. (The only other provider with perks geared toward military members is USAA, which specializes in this.)

Points to consider

Unexceptional claims process

Liberty Mutual doesn't have the highest scores from J.D. Power when it comes to interactions with agents and the overall claims process. Consumer Reports also gave Liberty Mutual a less-than-perfect score with regard to the ease of filing a claim through the company. While this doesn’t guarantee that you’ll have a bad experience, if you’d rather not leave anything up to chance, you might consider Amica, which boasts both a great customer service experience and ample discounts.

American Family Homeowners Insurance — Most Ways to Save


Most Ways to Save
American Family Insurance

American Family

Pros
Greatest number of discounts
Bundling bonus
Cons
Less than stellar claims process

Why we chose it

Greatest number of advertised discounts

American Family stood out for having more advertised discounts than any other provider on this list. These include all the ones you might expect, like a discount for making your home safer (by installing smoke/heat sensors and home security) a discount for holding multiple policies. Notable were some less common ways to save, such as a discount for customer loyalty (Amica was the only other service to offer this) and a generational discount for if your parents happen to be American Family customers.

Bundling bonus

Say you wanted to add an auto coverage policy through American Family; not only would you save 29% on auto by bundling, but you’d also get 20% off your home coverage. Not to mention, bundling keeps things simple, as all of your payments go through one provider.

Points to consider

Less-than-stellar claims process

According to the Consumer Reports homeowners insurance survey, American Family customers found the claims process unintuitive. If you’re looking for a provider with a more streamlined process, we recommend Amica. While the company might not have as many discounts as American Family, you can rest assured knowing that Amica received the highest possible marks for everything from the simplicity of filing a claim to the courtesy of the agents.

Nationwide Homeowners Insurance — Best for Replacement Coverage

Best for
Replacement Coverage
Nationwide

Nationwide

Pros
Unique coverage options
Reimburses full value of belongings
Cons
Not the cheapest premiums

Why we chose it

Unique coverage options

Nationwide stood out to us because of its unique and valuable coverage options, such as better roof replacement. With this coverage, customers who have suffered a covered loss can have their roofs rebuilt with stronger materials. Nationwide was also one of the few providers on our list that offers flood insurance. Most homeowners insurance providers don’t cover this, instead directing you to the National Flood Insurance Program.

Reimburses full value of belongings

Nationwide’s Brand New Belongings coverage doesn’t just pay to repair or replace your damaged and stolen possessions; it provides money at the depreciated value of your covered items. Then, once you’ve paid for repairs or purchased replacements, you can send your receipt to Nationwide and the company will pay the difference. Few homeowners insurance companies will go the extra mile to reimburse the full value of your belongings.

Points to consider

Not the cheapest premiums

All of Nationwide's perks come at a price, unfortunately. Nationwide is not known for being the absolute cheapest homeowners insurance provider, although it's also not the most expensive. You might be able to do better with Liberty Mutual, which provides protection for your possessions and offers as many ways to save as Nationwide.

USAA Homeowners Insurance — Best for Military Members and Families

Best for
Military Members and Families
USAA

USAA

Pros
Stellar customer service
Exceptional financial strength
Cons
Not for everyone

Why we chose it

Stellar customer service

USAA offers all the hallmarks of a good homeowners insurance provider, like coverage against fire, theft, vandalism, and weather-related events. However, that’s not what makes the company stand out. Second only to Amica in the Consumer Reports survey, USAA is recognized with overwhelming excellence for everything from the claims process to the ease of reaching an agent and the courtesy of said agent. It seems like there wasn’t a whole lot for customers to complain about when dealing with USAA. J.D. Power also sings USAA’s praises with a five out of five rating in all categories, including pricing and overall satisfaction.

Exceptional financial strength

Whether you consult A.M. Best, Moody’s, or S&P Global, the outcome is the same: USAA is a financial powerhouse, with an A++, Aa1, and AA+, respectively. This means that when disaster strikes, you can depend on USAA to settle your claim and help get you back on your feet.

Points to consider

Not for everyone

USAA is only available to military service members and their families. This drastically limits the appeal of what is otherwise a reliable, professional, and pleasant homeowners insurance provider to work with. However, if you meet its requirements, you’ll find plenty to appreciate about USAA. And if you’re in the military but find that USAA just isn’t for you, consider Liberty Mutual, which offers a military discount and, frankly, more discounts than USAA.

Guide to Cheap Homeowners Insurance

Keep costs low but protection high

Raise your deductible

By raising the amount you’ll pay out of pocket before your insurance kicks in, you’ll lower your premiums (monthly/yearly payments). You can save as much as 25% by raising your deductible to $1,000. This can be a risky choice, though, and should be considered carefully — it’s important that you don’t raise your deductible so high that you can’t afford to pay it when something goes wrong. If you live in a disaster-prone area or have trouble saving, keeping a low deductible and investing in protection on a monthly basis is the safer choice.

Maximize discount opportunities and limit liabilities

If you make any home improvements or security upgrades, you might be able to reduce your premium — but only if you tell your insurer. Before investing in any renovations on your home, double-check what discounts are available. Chances are you already have the basics down, such as deadbolts and smoke alarms. But your insurer may reduce your rate if you go the extra mile with carbon monoxide detectors and home security systems (provided they're monitored). That also extends to improvements that help guard against natural disasters, like storm shutters and stronger windows. However, not every addition will help your premium. Trampolines, swimming pools, and “risky” dog breeds such as pit bulls will make your homeowners insurance company cringe. They’re all liability concerns, and liability concerns make rates go up.

Consider bundling

Companies universally offer a discount for holding multiple policies with them. By bundling auto, home, and life insurance, you can save money and maintain consistency in claims handling and communications.

Curtail your claims

Carefully consider the claims you file on your homeowners insurance, as it will raise the price you pay going forward. If you make several claims within a few years, you could be bumped into a “high risk” category with a potential 20% increase in premiums.

Pay attention to your credit score

Most states allow insurers to factor in your credit score when deciding what you’ll pay. The logic? Customers with high credit scores are less likely to make claims, and the insurer will return some of those expected savings in the form of lower rates. If you need help getting on top of your score, and potentially improving it, check out our favorite credit monitoring services.

Cheap Homeowners Insurance FAQ

What are typical homeowners insurance rates?

Any of our top homeowners insurance picks could potentially be the cheapest for you. Most annual premiums for homeowners insurance range from $600 to $2,000 ($50 to $170 monthly) — the range is so vast because rates are influenced by numerous, and highly personal, circumstances. Is your home old or new? Is it framed with brick or wood? Is it in a busy city or a rural area? Is there a high risk of natural disasters such as hurricanes, floods, or tornadoes? Are you bundling your policy with other types of insurance, such as auto or life? Those are only a few of the circumstances that can affect your quote.

What else affects your premium?

Factors include: credit score, location, condition of plumbing and electrical, vulnerability to wind damage/earthquakes/floods, claim history, replacement cost, dog breed, wood-burning stove, home-based business, remodeling, home liability limits, insurance score, marital status, age and construction of home, trampoline or swimming pool or hot tub, roof condition, proximity to fire station, square footage, number of inhabitants, area claim history, security systems and safety features, and more.

How much homeowners insurance should you have?

Of all the variables that affect your premium, the most important is replacement cost value. This is the amount of money needed to completely rebuild or replace your home in the aftermath of catastrophe. That number isn’t going to be the same as what you paid for your home (it should account for appreciation), nor the market value (which accounts for the plot of land and location). It’s best to hire an independent appraiser to get this number right and then confirm it with an appraiser from your insurance company. The higher the replacement cost, the higher your premium, but don’t underestimate it even if you’re eager to trim policy costs. This value is critical — protection against loss is the whole point of carrying insurance.

Is it against the law to not carry homeowners insurance?

Technically, no — you can legally own a home without homeowners insurance. But if you pay a mortgage, you lender will require you to have it. And whether or not you have a mortgage, your home likely represents the single biggest asset of your life and deserves to be protected with gusto.

The Best Cheap Homeowners Insurance Companies: Summed Up

  Amica Allstate State Farm Liberty Mutual American Family Nationwide USAA
Our review Our review Our review Our review Our review Our review Our review
Best for Customer ratings New homeowners Personalized quote Inflation protection Ways to save Replacement coverage Military members and families
A.M. Best financial strength rating A+ A+ A++ A A A+ A++
J.D. Power 2018 U.S. Home Insurance Study score 5/5 3/5 3/5 3/5 3/5 3/5 5/5
S&P Global financial strength rating N/A AA- AA A A+ A+ AA+
Moody's financial strength rating N/A A3 Aa1 A2 Aa3 A1 Aa1
Get a quote Get a quote Get a quote Get a quote Get a quote Get a quote Get a quote

The Best Homeowners Insurance by State

Every state has different insurance providers, as well as unique circumstances that affect policies and coverage. We’ve reviewed the five largest, highest-rated providers in every state using a methodology similar to the one employed in this review on nationwide companies.

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