Homeowners insurance pays to repair or rebuild your home and replace its contents if they’re damaged by specific perils like fire, theft or a weather event such as wind or lightning.
If you’re not familiar with home insurance coverage and its policies, you might end up paying more than you should for inadequate coverage. To help you find a homeowners insurance policy that works for you, here are the six best home insurance companies for October 2021.
Our Top Picks for Best Homeowners Insurance
- Lemonade – Best Online Insurance Company
- Erie Insurance Company – Best Range of Coverage Options
- Allstate – Best for Claim-Free Homeowners
- Amica Mutual – Best Customer Service
- USAA – Best for Military Members
- Hippo – Best for Fast Quotes
- AIG – Best for High-Value Homes
Best Home Insurance Reviews
Why we chose Lemonade: Lemonade’s use of quick and automated online services provide a smooth experience and can speed up both quotes and claims processing.
Lemonade Insurance is an online-only insurance company that uses artificial intelligence to provide notably fast home insurance quotes and claims payments. The company can provide a quote in a few minutes — you simply fill out a form on their website, choosing the coverage amount. They also have customer service available through text and phone calls to help you through the process if you need it.
The use of AI also makes the claims process unusually quick, with many reimbursements paid in a matter of minutes, the company says. Lemonade also has a unique approach to paying for its operations and using company profits. Its operations are funded, at least in part, through a flat fee that’s added to the policy’s premium. Then, through what is called the Lemonade Giveback program, up to 40% of any premiums that aren’t used to pay out in claims are donated to a non-profit organization you choose when you initially sign up for the policy.
Otherwise, Lemonade offers a standard selection of coverage options, including:
- Dwelling coverage
- Other structures coverage
- Personal property coverage
- Personal liability
- Medical payments
- Loss of use
- Customizable coverage deductibles
- Discounts available when bundling with auto insurance
- Add-ons include liability coverage, identity recovery, and service line protection
- J.D. Power Ranking: 6th (out of 20)
- A.M. Best Rating: A+
- Only available in 12 states
Why we chose Erie: Erie offers Guaranteed Replacement Cost under its standard policy, a valuable addition to an already solid insurance package.
Erie Insurance is among a handful of homeowners insurance companies that include Guaranteed Replacement Cost coverage under its standard policy, which pays homeowners enough to rebuild their home the way it was before the incident, rather than paying a depreciated amount due to the home’s age. That coverage includes roof damage coverage as well, although full replacement is an extra-cost addition.
Erie also offers a 16% to 25% discount for bundling and additional discounts if you install automatic sprinklers, smoke detectors, and burglar alarms.
The company is among the few insurers — along with Allstate and USAA — to offer, at additional cost, home-sharing coverage as an alternative to buying such insurance through AirBnB or Vrbo. As a rule, damage from paying guests is not covered under standard homeowners insurance.
Erie’s base policy also covers these other items that are extra-cost add-ons with many companies:
- Valuables and hard-to-replace items
- Gift card and gift certificates
- Animals, birds, and fish
- Cash and precious metals
You can also add the following coverage to any Erie policy:
- Water backup and sump overflow
- Personal liability coverage
- Identity recovery services
- Service line protection
- Additional rebate when renewing your standard policy
- Rateguard option locks in your premium
- HostAdvantage for home-sharing or renting
- J.D. Power Ranking: 7th out of 20
- A.M. Best Rating: A+
- HostAdvantage feature is not available in all of 50 states
Why we chose Allstate: Allstate’s solid reputation, along with big perks and discounts for claim-free homeowners, earns it a place on our list.
Allstate compensates homeowners who take good care of their property and are claim-free. You can get up to a 20% discount if you switched to Allstate and hadn’t filed a claim with your previous insurer. Allstate will also lower your deductible amount for every additional year without a home insurance claim while you’re with them.
For an extra fee, Allstate also offers a Rateguard option, which allows you to file one “free” claim every five years without triggering a rise in your premium. However, since there’s a low likelihood of placing a claim in any year, the option may or may not be worth buying, depending on its cost and the increase in premium that would result from making a claim.
The company is one of the few — along with Erie and USAA — to offer, at additional cost, home-sharing coverage as an alternative. As we said above, damage from paying guests is not covered under standard homeowners insurance policies.
The company also offers optional coverage for:
- Identity theft restoration
- Green improvement reimbursement
- Water backup
- Yard and garden
- Scheduled personal property
- Electronic data recovery
- Business property
- Musical instruments
- Sports equipment
- Contractor Connection database connects you with contractors
- Discounts for claim-free customers
- J.D. Power Ranking: 1st out of 20
- A.M. Best Rating: A+
- Discounts are not available in all states
- Contractor Connection is not available in HI and AK
Why we chose Amica Mutual: Amica Mutual’s customer service is one of the best in the market, and their Contractor Connection makes quality service accessible wherever you are.
Amica Mutual stands out for high-quality customer service, having topped the J.D. Power Property Claims Satisfaction Study for nine consecutive years. Another notable aspect to the company is its Contractor Connection database, which lists thousands of vetted, licensed and insured contractors and guarantees their work with a five-year warranty.
Like many insurers, Amica also offers loyalty discounts, in its case to customers who have been with the company for at least two years. They also offer breaks to those who are and remain claim-free for at least three years.
For customers who require additional coverage, Amica offers:
- Valuable items coverage
- Catastrophic coverages
- Identity fraud expense coverage
- Home business coverage
- Get 10% off with a car insurance policy
- Home Sharing coverage available
- Discounts for condo or renters insurance policyholders with no claims
- A.M. Best Rating: A++
- Only available for military personnel and their families
- Home Sharing is not available in all of 50 states
Why we chose USAA: USAA has a great combination of low premiums and wide coverage for qualifying members, along with a reputation for trustworthiness and financial stability.
USAA is a highly rated insurance provider — both for its financial stability and customer service (although its limited availability means it's not included in J.D. Power customer satisfaction rankings). It offers many different coverage options for military members and their families, including the children of veterans and those who are serving.
USAA is also among just a handful of homeowners insurance companies that includes Guaranteed Replacement Cost coverage under their standard policy, which allows homeowners to rebuild their home the way it was before an incident, rather than receiving a depreciated amount due to the home’s age.
The company is also known for its low premiums. If you qualify for membership in USAA, it would be hard to find better home insurance rates and coverage for property damage.
The company is one of the few — along with Erie and Allstate — to offer, at additional cost, home-sharing coverage as an alternative to buying such insurance through AirBnB or Vrbo.
- Obtain an online quote in 60 seconds
- Purchase a policy online in around 5 minutes
- Get discounts when using Hippo's Smart Home System
- Offers home-care services
- Discounts are available for homes with access to digital and smart systems
- Coverage is not available nationwide
Why we chose Hippo: Hippo’s use of technology both for customer service and improved home security makes them a top choice for tech-savvy homeowners.
Hippo allows customers to complete the quote process entirely online, get a quote in as fast as a minute, and receive a policy in as little as five minutes, the company claims.
Hippo also provides a smart home discount if you agree to install and use a free smart home monitoring system. The kit has several levels, with escalating arrays of equipment. The company claims customers save an average of $64/year when they agree to installing the plain self-monitoring kit — which includes smoke, CO2 and water-leak detectors — and $91/year when opting for the pro monitoring kit, which adds 24/7 monitoring and emergency dispatch services.
Their Hippo also offers a HomeCare Expert program that provides professional service recommendations, via phone, to policyholders who need repairs or maintenance.
The company’s policy discounts are subject to the use of a smart home kit, given at no cost to eligible policyholders.
In addition to standard home insurance coverage, Hippo offers to cover:
- Computers and home office equipment
- Appliances and electronics
- Smart home upgrades
- House cleaners and sitters
- Water backup
- Service line protection
- Enhanced rebuilding
- Full replacement costs
- Costs for local ordinance changes
- Coverage for homes of up to $100 million
- Robust cybersecurity coverage
- Coverage for properties outside the United States
- Lower average premium than other high-end competitors
- Low customer service ratings
- Customers have to buy more than one policy with the company
Why we chose AIG: AIG provides comprehensive coverage for high-value properties worth up to $100 million.
AIG is known as a luxury insurer that provides high net-worth individuals with comprehensive coverage, from dwelling to cybersecurity protection. It offers guaranteed replacement cost (without any limits, according to the company) for homes valued from $750,000 all the way up to $100 million on an “all-risk” basis — meaning their policy covers all perils except the few specifically excluded. They also offer the option of ultra-high deductibles (up to $100,000) so you can lower your premium.
You must have one of the company’s other policies to get homeowners insurance with AIG, but the company has a wide array of policies aimed at high net-worth customers to choose from — including collection insurance, yacht insurance, auto insurance and even private aircraft insurance.
You can also find services that will help you prevent accidents or take care of them quicker. The insurer provides background check services for domestic staff, private firefighting units, cybersecurity measures and more.
On top of standard coverage, AIG offers services such as:
- Kidnapping, ransom and extortion coverage
- Landscaping coverage
- Crisis management and reputation restoration
- Multinational property coverage
- Business property coverage
Other Home Insurance Companies We Considered
As we analyzed home insurance companies, we focused on financial stability and strong customer satisfaction ratings, in addition to the variety of coverage options each company offered.
The insurance providers we selected excelled in all of these categories, while the following carriers didn’t quite meet the mark.
However, do check out these additional options below to see if one of these companies might fit your specific needs.
- Partnership with Ting to prevent electrical fires
- Discounts for bundling policies and for first-time sign-ups
- Insurance agents available in most states
- Policies not available through independent agents
- Online quote system may not be available for manufactured or mobile homes
- Fewer discounts than competitors
- Farmers Smart Plan Home Policy offers three different types of coverage
- Claims-free discounts
- Eco-rebuild coverage offers up to $25,000 to replace electronics and appliances with environmentally friendly products
- Doesn't offer home insurance in Alaska or Washington D.C.
- Somewhat more expensive than competitors
- Offers an array of discounts for online purchases, auto policies, new homes, claim-free customers, automatic payments and paperless options
- Comprehensive mobile app
- High number of complaints with the National Association of Insurance Commissioners (NAIC)
- Coverage add-ons include identity fraud, green home coverage, water backup, and special personal property protection
- Discounts for homeowners with protective devices such as home security systems, interior sprinklers and fire alarms
- Higher prices than competitors for policy limits above $75,000
- Lower than average satisfaction rating in the 2021 J.D. Power Property Claims Satisfaction Study
- Masterpiece homeowners policy covers high-value properties worth more than $1M
- Coverage for traumatic experiences such as child abduction, stalking and home invasions
- More expensive than average
- Only sells through local agents
- Lower than average premiums, along with some uncommon standard coverage such as sewer backup damage
- Generous discounts for bundling and for new and renovated homes.
- Its mobile app allows you to make payments, show proof of coverage, monitor claim status and more
- Consumer satisfaction score, as measured by J.D. Power, is lower than other companies on this list
Home Insurance Guide
Homeowners insurance coverage is a type of property insurance that provides financial protection against loss due to natural disasters, theft and accidents. Often, it can also cover additional living expenses (ALE), that is, the costs incurred if you’re displaced from your home and have to find somewhere else to stay.
If you’re a new homebuyer, it’s important to remember that a home insurance policy is required if you are financing a new home. Additionally, the policy cannot travel from one dwelling or owner to another — something to keep in mind before selling your house.
When you’re shopping around for a policy, it can be useful to contact an insurance agent that can help you compare quotes and coverage options.
What Does Homeowners Insurance Cover?
There are several levels of homeowners insurance policies. Which one is right for you will depend on the level of coverage you want.
Read our list below for the different types of coverage available to you.
The most basic policy. It covers damage inflicted by these 10 perils:
- Fire and lightning
- Hail and windstorms
- Civil unrest
- Aircraft damage
- Vehicle damage
- Volcano eruption
A step up in coverage from H01. It covers the ten basic perils plus six more which include:
- Falling objects
- Water discharge (not flooding)
- Sudden cracking, bulging or burning of a built-in appliance
- Accidental damage from electrical currents
The most common policy, which covers all perils except for floods and earthquakes. If you’re unsure about needing flood coverage in your homeowners policy, take a look at our flood insurance guide.
This is renter’s insurance, which of course doesn’t apply to homeowners. However, if you’re looking for this type of insurance, make sure to check out our reviews on the best renter’s insurance companies.
The highest level of coverage. It covers most perils, the structure, and your belongings at replacement cost regardless of which included peril caused the damage.
This covers condos. While condo structures and common areas are generally covered by homeowners’ associations, with an H06 you can cover your belongings and the inside of your home.
This coverage is for mobile or manufactured homes, meaning homes built elsewhere and moved around or brought into a land plot after manufacture. It’s not to be confused with RV insurance, which is a type of automobile insurance (you can check out the best RV insurance companies here, though).
It covers older homes. This coverage is specifically designed for high-value houses that cost more to rebuild.
Many insurance companies offer customizable coverage as part of their homeowners insurance policy. Identity theft protection, work-related damages, and damages caused by rodents and domestic animals are part of the extra coverage options that can be added to a homeowners’ insurance policy.
What is Excluded from Homeowners Insurance
Home insurance policies never include coverage for the perils listed in the table below. These require additional and different policies instead; however, there are also some exceptions for perils that would normally be covered.
High-risk flood areas
If your area is deemed high-risk by the Federal Emergency Management Agency (FEMA), you will be required to purchase flood insurance for your property as an add-on to your policy. The National Flood Insurance Program (NFIP) provides flood insurance for property owners, renters, and businesses and is available for anyone living in one of the 23,000 participating NFIP communities. For more information about what’s covered and how to purchase flood insurance, visit FloodSmart.gov.
Hail and wind
Depending on where you live, there may be additional weather-related exclusions. For example, homeowners’ insurance policies issued for coastal homes in Texas don’t cover wind or hail damage.
Bear in mind that home insurance policies in the Eastern coastal states have hurricane and windstorm deductibles. Whether you live in Florida or New York, if your home is hit by a storm, the deductible you pay won’t be the fixed amount you agreed upon for the other perils. It will be a percentage based on the coverage you chose.
This is mostly regulated by state laws, so to read more about your specific state, make sure to visit the Insurance Information Institute.
Earthquake damage is normally not covered by any home insurance policy, and is only added through a rider or by buying a completely different policy. In a place like California — probably the most prone to seismic activity in the United States — it’s important to add a rider or get a policy to cover in the case of a loss. Checking with the largest earthquake insurer in the state, the California Earthquake Authority, is a good start.
Depending on your home insurance policy, some items — such as spoiled food or frozen pipes — may not be covered in the event of a short or prolonged power outage. However, it’s not as clear cut as floods or earthquakes, so make sure to check directly with your insurer beforehand to see what’s covered and what’s not.
In the meantime, protect your appliances with surge protectors and check if your refrigerator protection plan is still valid, which can cover the loss of food. For more information about what you can do to protect yourself, read our story about power outages.
What is the 80% rule in homeowners insurance?
The so-called 80% rule doesn’t directly affect your premium, but it can affect your decision on how much coverage you get. This, in turn, does affect your monthly or yearly payment.
Although it’s technically an “unwritten rule” in the home insurance industry, in practice, this means that companies will only offer complete coverage after a disaster if — and only if — the policy you bought is for at least 80% of the property’s total replacement value. Otherwise, they’ll cover only a percentage of the total damages.
So, if your home costs $500,000 and you buy coverage for $400,000, the company will cover your losses in any event. If you suffer $84,000 in damages, they’ll cover it. If you had bought coverage for $300,000, on the other hand, the insurer won’t pay for the entire $84,000. The calculation for what does get covered, though, varies from company to company, just like the decision to actually stand or not by the 80% rule.
How Much Is Homeowners Insurance?
While the national average premium is around $100 a month, it’s important to know that there isn’t a single established price for home insurance. Prices vary from company to company and policy to policy, but most insurers use the following factors to determine your premium.
Factors that impact your premium
Coverage amount needed. How much coverage you choose to buy will obviously have the greatest impact on your monthly or yearly premium. This means the overall cap the insurer agrees to cover in the case of an included peril. You don’t need to cover the entire cost of your house, you can buy an amount you deem reasonable depending on the highest risks you think your house has.
Location of your home. The location of your house determines the type of perils it could be exposed to, which will greatly impact the rate an insurance company offers you. For example, a house in a storm-prone zone will be more expensive to insure than one that isn’t.
Style and age of the home. The overall build and condition of the house is taken into account in order to adjust the premium. If a house is fairly deteriorated or built with outdated materials, for example, its structure is at a higher risk, thus raising the price on coverage.
Square footage. No surprise here: the size of your home is used to calculate your premium. Larger homes will inevitably need more resources to fix or rebuild, and are also more prone to neglect in certain areas.
Home insurance discounts
When shopping for the best homeowners insurance, make it a point to ask about discounts. Each company has options to help you reduce your insurance costs. The following are the most common:
- Bundling your home and life insurance policies with the same company
- Living close to a fire station
- Having a newer house (established timeframe depends on the company)
- Signing up within a year of purchasing your home
- Renewing your policy before it expires
- Having a good credit score
Cash value vs. replacement cost
Coverage limits usually boil down to a decision between “actual cash value” or “replacement cost” coverages:
- Actual cash value: calculates the value of your home minus depreciation, taking into account any existing damage or wear. With this option, you’ll only receive a settlement for your home’s value at the time it was lost.
- The replacement cost: reflects the amount needed to rebuild your home to how it was before (or as close to how it was as possible). Home replacement costs are almost always higher than the actual cash value, which is why it’s the most expensive coverage option.
There isn’t a one-size-fits-all coverage choice or a straight answer for how much homeowners insurance you should buy. It all depends on the homeowner, the dwelling, and the location, among other factors.
Additional Expenses to Keep in Mind
Depending on your living situation, standard insurance products might not be enough.
When you choose your policy, check the types of endorsements — also known as riders or add-ons — each company offers. These will increase your premium, but it might be worth it if it means protecting valuable assets such as jewelry or collectibles. You can also get protection for more specific issues such as cybersecurity threats and even kidnapping.
How We Chose the Best Homeowners Insurance Companies
Our list of best homeowners’ insurers streamlines the shopping experience. To devise a methodology, we:
- Looked through dozens of insurers and coverage options and narrowed our choices based on their coverage options, average premium payments, customer service, additional benefits and claim process speed.
- Used J.D. Power’s 2020 U.S. Property Claims Satisfaction Study to measure customer satisfaction ratings with claim settlement, claim process, First Notice of Loss (FNOL), estimation and repair.
- Considered each underwriter’s complaint ratio for homeowners insurance based on data from the National Association of Insurance Commissioners (NAIC).
- Eliminated companies with A.M. Best financial strength ratings below A+.