The Best Cheap Homeowners Insurance
We balanced the craving for the lowest possible premiums with other considerations: consistent customer service, financial stability to pay out the claims, and abundant discounts for more price-cutting opportunities. Below are our top picks; We encourage you to compare multiple rates to find the best fit and cheapest option for you with our quote tool.
Best Customer Rating
A.M. Best Financial Strength Rating A+
JD Power Overall Satisfaction Score 5/5
Consumer Reports Reader Score 94/100
Best for New Homeowners
A.M. Best Financial Strength Rating A+
JD Power Overall Satisfaction Score 3/5
Consumer Reports Reader Score 80/100
Most Personalized Online Quote
A.M. Best Financial Strength Rating A++
JD Power Overall Satisfaction Score 4/5
Consumer Reports Reader Score 82/100
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- December 22, 2017 - We’ve updated this review to reflect changes in provider policies and offerings and to include a more comprehensive guide to cutting your insurance costs. A top pick, State Farm, replaced MetLife for having better financial strength and a highly personalized online quote process.
The Best Cheap Homeowners Insurance
Homeowners have a variety of options to lower the cost of their insurance, regardless of provider. But sacrificing coverage and quality of service will end up costing you more when disaster strikes. To find the best cheap homeowners insurance, we vetted companies for their financial strength, coverage options, customer service, and opportunity for discounts. Our three favorites nail these requirements and individually excel in those categories. To find your best (and your cheapest), we recommend getting quotes from all three and comparing their policies.
Amica has a well-earned reputation for exceptional customer service and long history of doling out dividends (a percentage of the companies earnings). It earned a 94/100 from Consumer Reports readers and won the J.D. Power customer service award. Amica offers lots of opportunity for discounts, too — including unique savings for paying online and remaining a loyal customer.
With Allstate, you’ll find ample guides for understanding and purchasing homeowners insurance. If you Google questions about homeowners insurance, it’s likely an Allstate article that will pop up with unbiased and comprehensive information. Stocked with tools that evaluate your local risks and infographics that neatly sum up everything you need to know, Allstate stands out for its great online resources. It also boasts eleven discounts, with unique price cuts for new customers during their first two years and for purchasing a policy before your current one expires.
State Farm offers the most detailed online quote process, which catalogues features like the percentage of carpet-covered floors and the breed of dog you have. It will leave you confident in the quote you’re given. It also has the strongest financial ratings of out top picks, indicating a strong likelihood the company can back its policyholders in times of crisis.
How We Found the Best Cheap Homeowners Insurance
To set some expectations: We don’t recommend picking an insurance company (of any kind) on price alone. The point of an insurance policy is that it’ll kick in when you’re suddenly faced with extreme costs. And you won’t save time or money if the company you’ve chosen can’t fully satisfy your claim, fails to communicate in a timely manner, or has given you a super-cheap policy that is too thin to cover your needs. We made sure our favorite insurers could meet our service standards, then examined their opportunities for price cuts.
Every company we looked at hit the requirements we laid out in our review of the Best Homeowners Insurance:
- Nationwide availability: Since many providers don’t offer coverage in every state or have limited eligibility requirements (such as military affiliation), we examined only the biggest names in insurance. National providers also tend to be better equipped for major disasters. Allstate, for example, has a National Catastrophe Team — a fleet of mobile claim centers that will go to local communities to help those affected.
- Financial strength: Independent agencies including A.M. Best, Standard & Poor’s, and Moody’s provide ratings on the financial strength of insurance companies. These agencies asses the ability of an insurance company to remain solvent in time of major crisis or in difficult economic times. A good rating is confirmation that an insurer can back your claim when it matters most.
- Endorsements: We catalogued optional coverage additions that can fill gaps in your policy or cater to specific disaster-prone regions. Earthquakes, for example, aren’t covered in a standard policy. But for those living near fault lines, an endorsement that will cover resulting damage is wise, and it's important to find a company that offers it.
- Customer satisfaction: J.D. Power’s annual US Household Insurance Study and Consumer Reports’ customer experience survey measure communication, price satisfaction, claims process, and timely reimbursement. From J.D. Power, we required companies to have a score of 3/5 or better, and at least an 80/100 Reader Score from Consumer Reports.
- Discounts: We also took into account the number and type of discounts offered. Many companies give you a break for taking certain safety measures, like installing deadbolts or a security system. Most will knock their prices even lower if you don’t have a long claims history or if you sign up for auto-pay.
Flood insurance is complicated.Standard homeowners policies typically don't cover storm and weather-related flooding, and you’ll have to either supplement it with a company that offers the endorsement or purchase it separately from the National Flood Insurance Program.
We found a handful of great companies that will be there for you when you need them. But when it comes to their prices, any of our favorites could be the cheapest for you. Most annual premiums for homeowners insurance range from $600 to $2,000 ($50 to $170 monthly). These rates vary because they’re influenced by 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.
Of all the variables that affect your premium, the most important will be replacement cost value. This accounts for the amount of money to completely rebuild or replace your home in the face of catastrophe. And the higher the replacement cost, the higher your premium. This value is critical — don’t underestimate it, even if you’re trying to trim your policy costs. That number isn’t going to be the same as what you paid for your home (it will 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.
In addition to the replacement cost value, you’ll also want to collect all current insurance history, catalogue your home’s construction details, and prioritize any additional coverage you might want before shopping around. From there, the only way to compare prices and find your cheapest is to get quotes from the companies that nail the basics.
Our Picks for the Best Cheap Homeowners Insurance
Amica: Best Customer Rating
Amica is the only company 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 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 in customer satisfaction from Consumer Reports, with a Reader Score of 94/100. That’s a fairly significant lift over State Farm (82) and Allstate (80) and will likely mean a more painless process during times of turmoil.
With 10 discounts in total, Amica is second to Allstate for most discounts. Notably unique are its paperless bill and loyalty discounts, which save you work and money (you won’t have to mail in your check or shop around for new providers). You don't have to sweat missing out on standard discounts for security and safety, either — unlike Safeco, which fails to offer discounts for fire extinguishers, sprinklers, or fire alarms.
On top of traditional price cuts, Amica offers a unique dividends policy. Because it’s a mutual company, the policyholders (rather than investors or stockholders) back the company. Amica policyholders could receive a dividend at the end of the term if the company does exceptionally well financially. This payback can be between 5-20% of your annual premium. One drawback: Premiums tend to be slightly higher for mutual companies. But between dividends, discounts, and high customer ratings, Amica is a clear frontrunner and potentially your cheapest option.
Allstate: Best for New Homeowners
Allstate stands out for its comprehensive educational tools and extensive resources. It’s a great place to start if you’re new to the game of homeownership, and it also earns its spot on our list of cheap homeowners insurance companies by having the most discounts.
With a robust guide filled with information about homeowners insurance that's not provider-specific, you can arm yourself with everything you need to know as a newbie. You can even get a personalized walkthrough of insurance-relevant stats for your specific address using Allstate’s GoodHome tool. The tool uses Google Street View to display 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.
Whether you want a price break for bundling, setting up automatic premium payments, or securing your home with burglar alarms and fire extinguishers, Allstate offers a discount for it. Unlike other providers, Allstate also has a “welcome” discount that lasts for your first two years, plus a discount for early shoppers who sign up before their current policy expires.
Allstate ranked in the better half of all homeowner insurers for customer satisfaction, notably beating out Nationwide, Farmers, MetLife, and Safeco, though it doesn't fare as well as Amica and State Farm. You may get a cheaper quote from Allstate, but customers have mixed views as to whether they’re getting their money’s worth. Its 3/5 rating from J.D. Power and 80 from Consumer Reports indicate that Allstate customers are less satisfied than Amica customers with policy price, interactions, and claims. If price truly is the most important factor to you, and Allstate offers you the cheapest quote, brace for potential frustration — but know that they’re dedicated to creating the best online resources for their customers.
State Farm: Most Personalized Online Quote
As the most popular insurance company with the highest percentage of market share, State Farm has excelled in customer retention for its reliable financial strength, fair discounts, and good customer service.
We required a strong financial outlook for all our top picks, but State Farm stood out for receiving the highest possible ratings from A.M. Best (A++), as well as top scores from S&P (AA) and Moody’s (Aa1). These high scores are an indication and assurance that the company is willing and able to pay out its claims, even in disaster circumstances where many customers are filing claims. Insurance companies aren’t invincible; Even American International Group (AIG) needed government bailout during the 2008 recession. Around that time, Moody’s downgraded AIG’s rating to reflect a negative outlook. While many circumstances can influence the financial state of these corporations, their agency ratings are a valuable metric.
When it comes to saving on your investment, State Farm primarily offers discounts around specific preventative home additions: sprinklers, fire extinguishers, and all kinds of alarms. In addition, you can receive a discount for having a new utility system and a certified impact-resistant roof.
With an 82/100 satisfaction score from Consumer Reports and 4 power circles across the board from J.D. Power, State Farm’s customer service trends better than Allstate. State Farm scored best in their damage amounts and policy offering categories, likely because they have 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.
A Guide to Cheaper Homeowners Insurance
If you’ve still got price on your mind, there are a few ways you can lower your costs without sacrificing your coverage.
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 percent 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.
While you can’t control the location of your home, (and its natural disaster risks), you can control some other common liabilities and precautions that qualify for discounts. 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 handling claims and communications.
If you make any home improvements, 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 (that are monitored). That also extends to improvements that help guard against natural disasters, like storm shutters and stronger windows. Similarly, you’ll want to keep tabs on your personal belongings to make sure any notable additions or subtractions are reflected.
Want to know what makes your homeowners insurance company cringe? Trampolines, swimming pools, and “risky” dog breeds such as pit bulls. They’re all liability concerns, and liability concerns make rates go up.
Limit 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 percent increase in premiums.
Don’t ignore 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.