Home insurance protects the most significant asset many people will ever own — their house. With the median house price in the U.S. in the second quarter of 2023 at $416,100, insuring your home and the possessions inside could be one of the best ways to prevent financial ruin for you and your family. Finding the best home insurance to protect your home is essential, but balancing the right coverage and protection with the right price can be tricky.
To help you find the right insurance company, we have reviewed data from some leading insurance carriers, evaluating their policies and coverages, financial strength, customer service data, and customer complaints to help you find the best option to fit your needs.
Best home insurance companies of December 2023
- Best for veterans and military: USAA
- Best for online users: Lemonade
- Best for bundlers in select states: Erie Insurance
- Best for multiple-policy holders: Allstate
- Best for one-stop shopping: State Farm
- Best for great customer service: Amica
- Best for discounts: Nationwide
- Best for high-value homeowners: Chubb
1. USAA: Best for veterans and military
USAA ranked number one for homeowners insurance policies due to its high customer service ratings, broad coverage offerings, and policy features that cost extra at other companies, such as replacement cost coverage, which helps to replace personal belongings at their current price, not what you originally paid.
USAA has an A++ financial strength rating from AM Best and a high customer satisfaction score from JD Power and Associates 2022 Customer Satisfaction Survey.
Although coverage is only available to military members and their families, USAA offers some of the lowest home insurance prices if you qualify. It even offers military uniform coverage with no deductible for active duty military and replacement coverage for personal military equipment, with a deductible waiver if loss or damage occurred due to war.
USAA also offers a range of other insurance products, including renters insurance, mobile home insurance, car insurance, long-term care insurance, and Medicare plans.
2. Lemonade: Best for online users
Coming in at number two, Lemonade was founded in 2015 and is a relative newcomer to home insurance. Not only is Lemonade new, but it's also a public benefit corporation and allows customers to choose where it donates part of its profits to more than 100 charities worldwide.
Lemonade operates completely online and provides online quotes and approvals almost instantly, although you can speak with a representative on the phone if needed.
Its policies include home, pet, term life, and auto insurance coverage. It also provides add-ons such as water backup, swimming pool liability, coverage for extended reconstruction costs, and appliance breakdown coverage.
Although Lemonade is not rated by A.M Best, it does have an A rating from Demotech, which rates regional and specialty insurers. Lemonade’s home insurance is available in 23 states and Washington D.C.
3. Erie Insurance: Best for bundlers in select states
Erie Insurance has an A+ rating from A.M. Best and is ranked highly in J.D. Power’s 2022 overall customer satisfaction survey, but the Pennsylvania-based company is only available in 12 states and Washington D.C.
Erie offers guaranteed replacement cost coverage as standard coverage to its policyholders as well as other perks like water backup and sump overflow coverage, identity theft coverage, personal liability coverage, and service line protection.
If you bundle another eligible policy with your homeowner's insurance, you may receive a multi-policy discount between 16% and 25%, depending on your state. Many of Erie’s services, including getting a quote and filing a claim, are only available by contacting one of its 13,000 agents and can’t be done online.
Visit Erie Insurance.
4. Allstate: Best for multiple-policy holders
Allstate is the second-largest homeowner insurance provider in the country. It ranked fourth on our list with its A+ rating from A.M. Best, and fewer customer complaints than other companies on this list.
Allstate is available in all 50 states, although coverage may be limited in some areas. Customers can request a quote and file a claim online or contact a local agent for assistance.
It offers a variety of policies, including auto, homeowners, renters, condo, and landlord coverage. It even includes coverage for home sharing (like Airbnb rentals), identity theft restoration, electronic data recovery, and flood coverage. Allstate also has multiple discount programs to help customers save on insurance costs.
5. State Farm: Best for one-stop shopping
State Farm is the largest home insurance provider in the country and the nation’s largest auto provider. It is available across all 50 states, although coverage can vary based on location.
State Farm offers home insurance policies and has several add-on options such as flood insurance and personal article protection, which covers valuable collections or high-end equipment.
It also offers policies for those living on a farm, ranch, or manufactured home, in addition to various auto coverage, life insurance, and other insurance options. Quotes are available online, but customers must work with an agent to finalize and purchase a policy.
It has an A++ financial rating from A.M. Best, the highest available, and comes in just above Erie Insurance in J.D. Power’s Customer Satisfaction Survey. With so many options and broad availability, it's a good choice for people who only want to deal with one insurance carrier for all their insurance needs.
Visit State Farm.
6. Amica: Best for great customer service
Good customer service is an important feature for an insurance company, and Amica takes the top spot in both the 2022 J.D. Power Overall Customer Service for Home Insurance Study and the 2022 J.D. Power Property Claims Satisfaction Survey, along with an A+ financial rating from A.M. Best.
Amica offers standard home insurance policies to fit your needs, but they also offer add-ons such as additional dwelling replacement coverage, water backup and sump pump overflow coverage, and coverage to specifically replace a computer or device if the damage meets certain criteria but does not fall under your standard home insurance policy.
Of special note, Amica offers dividend policies, which may return up to 20% of the cost of your policy to those who qualify. If this sounds appealing, note that it might cost you more than a standard policy and may not be available in every state or for the coverage amount you need.
7. Nationwide: Best for discounts
If you’re looking for multiple discounts, Nationwide may be your best choice. The company had some of the lowest premiums on our list and multiple discount options, including offering discounts for people living in a gated community, staying claims-free on your policy, and even renovating your heating, plumbing, or electrical systems.
Nationwide has an A+ rating from A.M. Best but scored below the national average in J.D. Power’s 2022 Customer Satisfaction ratings.
Its standard home insurance coverage offers credit card fraud protection, not something you see with other insurance companies. Nationwide is only available in 46 states, and some coverage may require you to pay out-of-pocket for replacement items and then be reimbursed.
8. Chubb: Best for high-value homeowners
Chubb is a global insurance company that operates in 54 countries and territories and is the top commercial insurer in the U.S. with over $200 billion in assets. It’s geared towards owners of high-end real estate and offers a variety of coverage and discount options, although it is only sold through an agent.
Although Chubb has an A++ Superior rating from A.M. Best, it comes in below average on the J.D. Power customer satisfaction score on our list. Chubb was in the middle of the pack regarding premium prices, but you may wind up paying more based on the type of coverage and policy limits you need.
Chubb includes coverage that would be extra at other companies, including wildfire defense, tree removal after a storm, restoration of electronic data destroyed by a computer virus, and its HomeScan program. This feature helps reveal leaks, missing insulation, and faulty electrical connections before damage (and an insurance claim) happens.
What is home insurance?
Home insurance provides financial protection if your home is destroyed or damaged during a natural disaster, fire, or accident. Standard home insurance packages usually cover damage to the actual structure of your home and your belongings. Most policies also offer personal liability coverage and may also cover some additional living expenses if you are displaced.
Mortgage lenders often require at least basic home insurance when approving home financing, and having adequate home insurance can help protect you from paying directly for any repairs or rebuilding your home in the event of a disaster.
According to the Insurance Information Institute (III), the most popular type of homeowner policy is called an HO-3, offering broad protection against 16 types of damage.
- Fire and lightning
- Windstorms or hail
- Damage caused by vehicles to your home
- Vandalism or malicious mischief
- Falling objects
- Weight of ice, snow, or sleet
- Riots or civil commotion
- Damage caused by aircraft
- Volcanic eruption
- Accidental discharge or overflow of water or steam from plumbing, heating, air conditioning, or a fire suppression system, or from a household appliance
- Sudden and accidental damage from steam or hot water heating system, HVAC, or fire suppression system
- Freezing of plumbing, heating, air conditioning or fire prevention sprinkler system, or of a household appliance
- Sudden and accidental damage from artificially generated electrical current (but does not include loss of some types of electronic components)
If you live in an area prone to floods, earthquakes, or wildfires, you can also add additional policies to cover damages from those events. Those usually come at an additional, often higher cost and may only cover some of your damage.
What does homeowners insurance cover?
Most standard home insurance policies offer several types of coverage, although policy inclusions and dollar amounts may vary based on several factors, including where you live and your home type.
These typically include:
Dwelling: Dwelling coverage helps cover the cost of repairing or replacing the structure of a home after a covered disaster occurs. Coverage usually includes the roof, walls, windows, and floors of your house, as well as any attached structures like a garage. According to the III, built-in appliances like a furnace are also often covered.
Other structures: If you have an unattached garage, a shed, or a fence on your property, your home insurance will classify those as other structures and will likely provide coverage to repair or replace them for any covered event up to the policy limit.
Personal property coverage: Personal property covers your belongings and includes clothes, furniture, electronics, and appliances that aren’t already built into the house. If a fire damages your living room, your property coverage will replace your furniture, TV, and other items up to your policy limits, while dwelling coverage handles any damage to the structure.
Loss of use/Additional living expenses (ALE): If your home is too damaged to live in while repairs are being made, loss of use or additional living expenses coverage will likely cover some, but not all, of the expenses you incur to stay somewhere else.
This coverage might pay for hotel stays, meals, or other expenses associated with being displaced for a covered event. If your home is damaged in a non-covered event, like a flood or earthquake, and you don’t have supplemental insurance, you likely wouldn't be eligible for ALE compensation.
Personal liability: Liability coverage helps protect you and your assets against lawsuits for bodily injury or property damage that you or your family members cause to other people. Liability insurance may also cover damage done by your pets (such as dog bites or property damage). It may even help cover the costs of defending yourself in court or any court awards against you.
Medical coverage: Medical payments coverage covers the medical bills of someone injured on your property but is not part of your family or household. You don’t need to be found at fault or be named in a lawsuit for medical coverage to cover costs up to the policy limit.
Some home insurance policies include identity theft protections and additional options to cover specific valuable items like jewelry, art, musical instruments, or other high-end equipment. If you’ve invested a large amount of money in equipment for a hobby or side hustle, it may be worth talking with your insurance carrier about increasing your policy limits or adding a separate policy to cover specialty items.
What doesn’t a home insurance policy cover?
Of course, some events happen that home insurance doesn’t cover. If you live in an area prone to natural disasters or have an older home, you might need to add additional coverage to help protect yourself and your house against perils that standard homeowners insurance HO-3 policies don’t cover.
The following coverages are often not included in standard home insurance policies but may be available as an add-on through your insurance provider:
Flooding from external sources: Flooding is excluded from standard home insurance policies, but you can often find flood coverage as a separate policy through the National Flood Insurance Program (NFIP) offered by the federal government and some private insurers.
Typically, coverage is offered in two categories: building coverage, which helps you replace structures and permanently installed items like carpets and some large appliances, and content coverage, which protects your belongings and smaller appliances.
WarningNote that not all floods are covered by flood insurance, so the cause of the flooding matters.
Water damage from a drain or sewer backup: Although some policies cover damage from water and sewer backup, many do not. If your policy doesn’t cover this type of damage, you may be able to purchase an additional rider to protect your home. One of the best ways to protect yourself from this type of damage is to ensure your plumbing system is properly maintained and check appliance hoses and seals for leaks.
Earthquakes, landslides, and sinkholes: Like floods, earthquakes aren’t covered under a standard homeowners policy, and you’ll likely have to purchase add-on coverage. Deductibles for earthquake insurance are often a percentage of the total cost of the structure rather than a dollar amount and could range from 2% to 20% of the total cost of your home.
Mold and fungus: The cause of mold or fungus, rather than the spores themselves, often determines if your standard homeowners’ policy will cover mold mitigation and repair. If a covered peril caused the growth, like a leaking pipe or water heater, then removing the mold may be covered by your standard policy.
If you don’t have a supplemental policy, you may have to pay to remove any mold and fungus caused by events not covered by your standard homeowners' policy.
Neglect or general wear and tear: Standard home insurance does not usually cover general wear and tear, like replacing a roof, fence, or HVAC and heating units.
If something on your home is damaged due to a storm, fire, theft, or vandalism, the repairs may be covered through your standard policy, but in general, replacing items due to preventable circumstances like termites or other infestations or normal wear and tear, is not covered.
TipIf you run a business from home, you may have to purchase a small business policy or endorsement in addition to your homeowner's policy to ensure you’re thoroughly protected. Business policies help cover any equipment, material samples, or merchandise you may keep in your home and provide important liability protection if a customer is injured on your property.
How does home insurance work?
If the worst happens and your home is impacted by a covered event, you won't just get a check from your insurance company for the amount of your policy. Instead, you’ll have to go through the claims process, which includes filing a claim, documenting the damage, and possibly waiting for an insurance adjuster to investigate before you receive a check for the cost of the damage, up to your policy limits.
Most insurance companies offer different levels of coverage for each policy. You can choose the level of coverage you want, but if your policy limits aren’t enough to cover the damage, you’ll have to pay any difference out of pocket.
The homeowners insurance coverage types generally offered by insurance companies are:
Actual cash value: With this option, the insurance company pays to replace your home or possessions, but with a depreciation deduction. It doesn’t replace what you lost — it reimburses you for an item’s current value. For example, if you had an older TV stolen, you would only get what the television was worth at the time of the theft, not the amount you need to buy a new one.
Replacement cost: This policy level will pay for the repair or replacement of your home without depreciation. In the TV example above, the insurance company may pay the cost to replace it with a similar but new model rather than just what it was worth. You may pay higher home insurance premiums for this coverage.
WarningBe sure to read the fine print of your policy to help you understand what is and isn’t covered.
Extended replacement cost: Extended replacement policies will pay a percentage, usually 20% to 25%, over the policy limit to rebuild your home or replace your items.
For example, if homeowners take out a policy for $100,000, they may receive $120,000 or $125,000 from the insurance company. This level of coverage offers protection against sudden increases in construction costs after a natural disaster such as a hurricane but is not meant to cover upgrades to your home.
Guaranteed replacement cost: This is the highest level of protection and may only be offered by some insurance companies. It pays whatever it costs to rebuild your home or replace your belongings — even if it exceeds the policy limit. However, the insurance company may cap the guaranteed replacement cost at 20% above your home’s insured value.
Extended replacement costs and guaranteed policies are more expensive but offer the most financial protection for your home and possessions.
How much does home insurance cost?
Homeowners insurance rates vary based on the amount and type of coverage you need, where you live, your claims history, and the type and age of the home you’re insuring. Although insurance premiums vary depending on where you live, the National Association of Insurance Commissioners (NAIC) reported an average annual premium of $1,311 for a policy in 2020 (the most recent year available).
Complicating home insurance rates further are the home insurance discounts that companies offer. Some may provide a discount off your premium for installing protective devices like a home security system and burglar alarms, updating or adding smoke alarms and carbon monoxide detectors, or adding storm preparedness items like storm shutters or reinforcing your roof.
Renovations such as modernizing your heating, plumbing, or electrical systems may also help you save money since newer methods offer better fire and leak prevention and suppression systems.
Additionally, you may receive a bundling discount by combining your home policy with other insurance, like an auto or liability policy. Just ensure the cost of bundling home and other insurance policies is less than the cost of each policy.
TipYour credit score may also impact your rates, which is another reason to compare quotes.
You may pay more for a policy if your home has high-risk items such as a swimming pool.
If possible, consider raising your deductible to reduce the amount of your premium. Deductibles are the out-of-pocket amount before your insurance company pays a claim based on your policy limits. The higher your deductible, the more money you may be able to save on your yearly premiums.
How to choose a home insurance policy
Choosing the best home insurance policy for you could mean doing some extensive research. As you search for the best insurance, consider the following:
Types of coverage you need: The type of coverage you need and where you live significantly impact the cost of your home insurance. Consider whether you live in a flood or wildfire-prone area, if you get heavy snow storms that may damage a roof, or if you have valuable possessions like jewelry, art, or musical instruments that might need their own insurance policy.
Coverage limits: It is essential to ensure you have the right coverage amount to help you repair or replace items at their current value. Consider whether you want a guaranteed or extended replacement cost level of coverage or if actual cash value will work for what you need to insure. Weigh the benefits and drawbacks and work with an insurance agent to help you determine the coverage level needed.
Customer service and financial ratings: Before selecting an insurance company, read customer service reviews and research the company's financial strength so that you know it could pay out any claims made. Look at the NAIC complaint index to see where your chosen company ranks.
Compare multiple quotes: Finally, gather home insurance quotes from multiple companies, and compare not only their pricing but their coverage limits, any exclusions, riders, and any additional policies required to get complete coverage for your home. Look at the discounts offered and determine what you qualify for with each company, but don’t decide solely on price.
In determining our ranking of the best home insurance companies, we looked at eight popular companies and ranked them according to a series of weighted factors that we consider critical to the consumer. We did not evaluate all companies in the category.
FinanceBuzz ranking criteria include:
- AM Best rating: Companies were scored higher for having a better AM Best rating.
- JD Power rankings: Companies were scored higher for ranking highly on JD Power’s Home Insurance Customer Satisfaction and Claims Satisfaction studies.
- NAIC complaints: Companies with fewer complaints than the national median scored higher.
- Customer experience: Companies were scored higher if they had online options for getting a quote, buying a policy, and filing a claim as well as a variety of ways for a customer to communicate with them, including a mobile app.
- Coverage options: Companies scored higher if they offered unique coverage options such as identity theft insurance and coverage for water and sewer back-ups.
- Cost: Companies with lower premiums were scored higher.
FAQs about home insurance
Is it worth shopping around for home insurance?
Yes, it is definitely worth shopping around for home insurance. Companies offer different rates for coverage types, policy limits, and coverage levels. They also offer various discounts, bundles, and add-on policies to help you customize your policy.
It’s crucial to consider customer service ratings, the financial ability to pay claims, and the price they quote. Be sure to talk with friends, check consumer guides, and consider speaking with an insurance agent to find the best policy for you.
Is homeowners insurance necessary?
Homeowner’s insurance is not required by law, but many mortgage lenders require home insurance before completing the home-buying process. Buying a home is the biggest purchase most people make in their lifetime, and failing to insure it could mean you are responsible for all out-of-pocket costs associated with a catastrophic event.
What is the average cost of home insurance?
The average annual premium for a home insurance policy was $1,272 in 2019, according to the NAIC. The average cost of home insurance varies based on the age, location, and type of building you’re trying to insure, as well as what you use it for. Additionally, the coverage level and policy limits you select, your deductible amount, and any discounts the insurance company offers may affect your home insurance price.
About 93% of homeowners had home insurance, but more than half didn’t have adequate coverage to replace their homes and contents after a catastrophic loss, according to the III and the Federal Emergency Management Agency (FEMA).
If you’re a first-time home buyer or just checking to see if there’s a better deal available for the same coverage, make sure you’re doing your due diligence. Gather multiple homeowners insurance quotes and compare policy details to get the coverage you need for the best price.
Use our guide to the best homeowners insurance companies as a jump start on your research and start gathering quotes to ensure you protect your home and family.
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