Best homeowners insurance companies for September 2023

USAA

Best overall

Rating: 3.7 stars out of 5

3.7 Bankrate Score

JD Power: 884/1,000 AM Best: A++

Average annual premium

^$ 969 for $250k dwelling coverage

USAA Review Get a personalized quote

Average annual premium

^$ 969 for $250k dwelling coverage

USAA Review Get a personalized quote

• Overview
• Pros and cons
• Compare rates
• Additional Coverage

Why USAA may be best overall: Although USAA only offers coverage to active-duty military and veterans, as well as their immediate families, the company has consistently high customer service scores, robust coverage options and low average premiums. It ranked as one of the best home insurance companies overall in our 2023 Bankrate Awards. Unique add-ons, such as coverage for military uniforms for active duty or deployed policyholders, are also offered.

Availability: Coverage is available in all states for policyholders that meet USAA’s eligibility criteria.

How to get started: You can get a USAA home insurance quote by calling 800-531-8722. Online quotes are also available for home insurance.

*Not officially ranked with J.D. Power due to eligibility restrictions

Pros

• Low average premiums
• Military-focused coverage options

Cons

• Only available to military members, veterans and qualifying family members
• Fewer discounts offered than some other home insurers

	Average annual rate	Average monthly rate
USAA	$969	$81
Allstate	$1,340	$112
Lemonade	Not available	Not available
Chubb	$1,775	$148
Amica	$2,996	$250
NJM	$371	$31
Auto-Owners	$1,049	$87
State Farm	$1,462	$122
Travelers	$1,249	$104
Erie	$957	$80
National average	$1,428	$119

USAA will typically insure your belongings at replacement value instead of actual cash value at no extra cost. That means, if your 10-year-old couch is damaged in a covered claim, USAA will usually pay for a brand-new replacement once you meet your deductible. USAA’s policies also include identity theft coverage in all states except North Carolina. If your identity is stolen, the company may reimburse you up to $5,000 for related expenses. 

USAA offers the following additional coverage to help round out your home insurance policy:

• Valuable personal property insurance: This is specialized coverage for items valued over $100 like jewelry, art, cameras and more. If your insured items are lost or stolen, USAA may reimburse you for their replacement value without you needing to pay a deductible. 
• Home-sharing coverage: Whether you rent out just one room or your entire home on a platform like VRBO or Airbnb, home-sharing coverage can help cover damage. This coverage is not available in all states.

Allstate

Best overall

Rating: 3.5 stars out of 5

3.5 Bankrate Score

JD Power: 815/1,000 AM Best: A+

Average annual premium

^$ 1,340 for $250k dwelling coverage

Allstate Review Get a personalized quote

Average annual premium

^$ 1,340 for $250k dwelling coverage

Allstate Review Get a personalized quote

• Overview
• Pros and cons
• Compare rates
• Additional Coverage

Why Allstate may be best overall: Allstate has an abundance of online tools and unique coverage options for homeowners who want to take a proactive approach to insuring their home. And for those who want help, Allstate also has an extensive network of local agents ready to help with any of your insurance needs.

Availability: Coverage is available in all states. As of November 2022, Allstate stopped accepting new home insurance policy applications in California.

How to get started: Allstate offers online home insurance quotes. If you prefer working with an agent, you could call 866-702-6500 or visit a local Allstate agency.

Pros

• Educational insurance information available online
• Common and Costly Claims tool could help you prepare for and mitigate home damage
• “Superior” financial strength rating per AM best

Cons

• Below-industry-average J.D. Power customer satisfaction score
• Some coverage options may not be available in all states

	Average annual rate	Average monthly rate
Allstate	$1,340	$112
USAA	$969	$81
Lemonade	Not available	Not available
Chubb	$1,775	$148
Amica	$2,996	$250
NJM	$371	$31
Auto-Owners	$1,049	$87
State Farm	$1,462	$122
Travelers	$1,249	$104
Erie	$957	$80
National average	$1,428	$119

As the second-largest home insurance company in the country by market share, Allstate has a vast set of resources available to its policyholders. Allstate home insurance policies are highly customizable, with the following features available as add-ons:

• Yard and garden coverage: This raises policy limits to help cover trees, landscaping and lawnmowers.
• Sports equipment coverage: This offers property coverage for skis, golf clubs and other expensive sports gear.
• Electronic data recovery: This can help cover the costs of recovering lost files, data, photos and videos.
• Water backup coverage: This coverage kicks in if your sump pump or drain is faulty and damages your home.
• Green improvement reimbursement: If your items are destroyed in a covered event, this coverage could pay to replace them with more energy-efficient versions.

Lemonade

Best for digital experience

Rating: 4.1 stars out of 5

4.1 Bankrate Score

JD Power: Not rated AM Best: A

Average annual premium

N/A for $250k dwelling coverage

Lemonade Review Get a personalized quote

Average annual premium

N/A for $250k dwelling coverage

Lemonade Review Get a personalized quote

• Overview
• Pros and cons
• More on Lemonade
• Additional Coverage

Why Lemonade may be best for digital experience: Lemonade’s artificial intelligence and digital-first approach to underwriting home insurance is innovative and allows the carrier to offer useful online tools and, according to the insurer, lower-cost policies. Rather than maintaining brick-and-mortar agencies, Lemonade operates via a highly rated mobile app. The interface can process simple claims incredibly quickly; the fastest claim time recorded was just 3 seconds.

 

Availability: Coverage available in Arizona, Colorado, Connecticut, Georgia, Illinois, Indiana, Iowa, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Virginia, Washington, D.C. and Wisconsin.

 

*Rate data is unavailable for Lemonade, and it has not yet been reviewed or rated by J.D. Power or AM Best for home insurance. However, the company has been rated by Demotech for financial stability and received a letter grade of “A,” which is considered exceptional. J.D. Power also awarded Lemonade the second-highest position for renters insurance in its 2022 Home Insurance Study.

 

How to get started: Lemonade is known for its technology. Home insurance quotes can be obtained online or through the mobile app. If you need to talk to a representative, you can call 844-733-8666.

Pros

• Innovative use of technology
• AI-approved claims pay out instantly via direct deposit into policyholder's bank account
• Donates a portion of unclaimed money to a charity of policyholder’s choice

Cons

• Limited third-party rankings
• No physical agency locations
• Only available in 23 states and Washington, D.C.

Lemonade’s home insurance is not yet rated by J.D. Power for customer service, but the carrier earned the second-highest ranking for renters insurance in the 2022 J.D. Power study. Plus, it has a lower-than-average complaint index for home insurance from the National Association of Insurance Commissioners (NAIC), meaning that the NAIC received fewer complaints than average from Lemonade’s homeowners insurance policyholders.

With Lemonade’s user-friendly mobile app, adding additional coverage to your home insurance policy is pretty straightforward. The following endorsements may help to fill in any gaps in your coverage:

• Swimming pool coverage: Lemonade’s swimming pool coverage adds an extra layer of liability coverage in case someone is injured in or around your pool.
• Equipment breakdown coverage: This endorsement can provide up to $100,000 in coverage for home appliances like dishwashers, washers and dryers, refrigerators and more. Equipment breakdown coverage is not available in all states Lemonade offers policies in.
• Buried utility coverage: Also known as service line coverage, this endorsement extends to underground utility lines like gas lines, sewage and water lines. Claims are covered on a named peril basis and subject to a $500 deductible.

Chubb

Best for luxury home coverage

Rating: 3.5 stars out of 5

3.5 Bankrate Score

JD Power: 809/1,000 AM Best: A++

Average annual premium

^$ 1,775 for $250k dwelling coverage

Chubb Review Get a personalized quote

Average annual premium

^$ 1,775 for $250k dwelling coverage

Chubb Review Get a personalized quote

• Overview
• Pros and cons
• Compare rates
• Additional Coverage

Why Chubb may be best for luxury home coverage: If you own a luxury home, Chubb’s specialized homeowners insurance policies offer risk consulting, which involves a trained risk consultant evaluating your home’s features to determine your home’s rebuilding cost. In addition, Chubb offers a HomeScan tool, which may help homeowners identify potential issues before they cause property damage claims.

Availability: Coverage is available in all states.

How to get started: Chubb sells its coverage exclusively through local independent agents. You can use the company’s Find an Agent tool to locate a Chubb office in your area.

Pros

• Coverage can be tailored for luxury homes
• HomeScan tool may help identify issues before they cause claims

Cons

• Lower-than-average overall customer satisfaction from J.D. Power
• May be expensive for lower-value properties

	Average annual rate	Average monthly rate
Chubb	$1,775	$148
Allstate	$1,340	$112
USAA	$969	$81
Lemonade	Not available	Not available
Amica	$2,996	$250
NJM	$371	$31
Auto-Owners	$1,049	$87
State Farm	$1,462	$122
Travelers	$1,249	$104
Erie	$957	$80
National average	$1,428	$119

Chubb’s baseline home insurance policies are already very robust. Coverage like extended replacement cost, home assessment services and water backup (for the Masterpiece-tier plan) are normally included in the policy. Chubb’s standard home insurance policies cater to high-value or luxury homes, and many of its policy endorsements are no different:  

• Jewelry coverage: This extends cash settlement coverage for jewelry at 100 percent of its agreed value.
• Arts coverage: This coverage extends to interior and exterior art pieces, whether they are stored at home or in a gallery. Most fine art pieces can be insured without a deductible. 
• Collectibles: This covers personal collections for most losses at an agreed value without the need for a deductible payment. 
• Wine and spirits coverage: If you are a wine or rare spirit collector, Chubb offers both scheduled and blanket coverage for your valuable bottles as well as specialist referrals. 

Amica

Best for customer service

Rating: 3.5 stars out of 5

3.5 Bankrate Score

JD Power: 849/1,000 AM Best: A+

Average annual premium

^$ 2,996 for $250k dwelling coverage

Amica Review

Average annual premium

^$ 2,996 for $250k dwelling coverage

Amica Review

• Overview
• Pros and cons
• Compare rates
• Additional Coverage

Why Amica may be best for customer service: Amica’s highly rated claims and customer service may be ideal for policyholders seeking a positive customer service experience. The company earned the top spot in the 2022 J.D. Power Property Claims Study — a position it’s held for 10 consecutive years. Amica’s high customer satisfaction performance is coupled with “Superior” financial strength, as rated by AM Best.

 

Availability: Coverage is available in all states except Alaska and Hawaii.

 

How to get started: Amica has an online quoting tool that you can use, or you can call 800-242-6422 for a home insurance quote. To learn more about Amica, visit amica.com.

Pros

• Homeowners and renters insurance policies rank highest with J.D. Power for customer satisfaction
• Dividend policies may allow you to recoup some of your premium

Cons

• Average premium is higher than the national average
• Certain types of structures, such as mobile homes, farms and ranches, are not typically eligible for coverage

	Average annual rate	Average monthly rate
Amica	$2,996	$250
Chubb	$1,775	$148
Allstate	$1,340	$112
USAA	$969	$81
Lemonade	Not available	Not available
NJM	$371	$31
Auto-Owners	$1,049	$87
State Farm	$1,462	$122
Travelers	$1,249	$104
Erie	$957	$80
National average	$1,428	$119

Home insurance policies from Amica are available in two tiers: Standard Choice and Platinum Choice. The latter is an HO-5 plan that includes coverage for the following:

• Credit card coverage: If your credit card is stolen, this coverage can provide up to $5,000 in reimbursements.
• Special computer coverage: This protects devices like your cell phone, laptop, tablet and television from heat warping and water damage.
• Increased liability and medical payment coverage: With this coverage, liability coverage limits rise to $300,000/$500,000, and up to $5,000 for medical payments.

Travelers

Best for add-on coverage options

Rating: 3.3 stars out of 5

3.3 Bankrate Score

JD Power: 794/1,000 AM Best: A++

Average annual premium

^$ 1,249 for $250k dwelling coverage

Travelers Review

Average annual premium

^$ 1,249 for $250k dwelling coverage

Travelers Review

• Overview
• Pros and cons
• Compare rates
• Additional Coverage

Why Travelers may be best for add-on coverage options: Although Travelers offers standard endorsements like coverage jewelry and valuables and water backup coverage, some unique options include its green home coverage and identity protection. It also has a free home history tool for home buyers to explore if considering a home.

 

Availability: Available in all states except Alaska, Florida, Hawaii, Louisiana and West Virginia. 

 

How to get started: For quotes, interested homeowners should call 866-218-5587, contact a local Travelers agent or explore its website. 

 

Pros

• Unique green home discount available
• OpenHouse, a free home history tool, is available to customers

 

Cons

• Not available nationwide
• Below-average J.D. Power customer satisfaction score

	Average annual rate	Average monthly rate
Travelers	$1,249	$104
Amica	$2,996	$250
Chubb	$1,775	$148
Allstate	$1,340	$112
USAA	$969	$81
Lemonade	Not available	Not available
NJM	$371	$31
Auto-Owners	$1,049	$87
State Farm	$1,462	$122
Erie	$957	$80
National average	$1,428	$119

A home insurance policy from Travelers may appeal to homeowners looking to customize their policies. Some endorsements cater more toward expanding the scope of your home insurance coverage to include more of your belongings, while others can add more layers of protection for already-covered items.

• Personal articles floater: This is similar to jewelry and valuables coverage, but can include a broader range of high-value items and offers higher coverage limits.
• Additional replacement cost protection: This adds an extra layer to your dwelling coverage in case your policy limits do not cover the full repair or rebuild costs resulting from a covered loss
• Contents replacement cost: This may help pay for the replacement cost instead of the actual cash value of damaged items. This additional coverage is subject to limits and a deductible.

NJM

Best for unique discounts

Rating: 3.2 stars out of 5

3.2 Bankrate Score

JD Power: Not rated AM Best: A+

Average annual premium

^$ 371 for $250k dwelling coverage

NJM Review Get a personalized quote

Average annual premium

^$ 371 for $250k dwelling coverage

NJM Review Get a personalized quote

• Overview
• Pros and cons
• Compare rates
• Additional Coverage

Why NJM may be best for unique discounts: New Jersey Manufacturers, or NJM, is a regional property and casualty insurer. However, it may be one of the top homeowners insurance companies for those who want a host of savings opportunities. The company’s premiums typically fall far below the national average, and several discounts are available — like savings for having a backup generator, a home alarm system or storm shutters (in some states). Keep in mind, though, that the specific type of generator, alarm system or storm shutters may affect the savings you receive.

Availability: Coverage is available in Connecticut, Maryland, New Jersey, Ohio and Pennsylvania.

How to get started: You can get an NJM quote by calling 800-232-6600 or using the online quote tool.

Pros

• Low average rates
• Numerous discounts

Cons

• No mobile app availability for NJM’s homeowners insurance policy
• Limited third-party data available for customer satisfaction

	Average annual rate	Average monthly rate
NJM	$371	$31
Travelers	$1,249	$104
Amica	$2,996	$250
Chubb	$1,775	$148
Allstate	$1,340	$112
USAA	$969	$81
Lemonade	Not available	Not available
Auto-Owners	$1,049	$87
State Farm	$1,462	$122
Erie	$957	$80
National average	$1,428	$119

NJM is rated highly by Bankrate not just for their cheap premiums and a lengthy list of discounts, they also offer a generous range of policy endorsements. Some are to be expected from a home insurer, but others are more specialized — which is especially surprising for a regional insurer. 

• Assisted living care coverage: This offers personal property and personal liability coverage for a family member in an assisted living facility. The family member in question must be named on your home insurance policy. 
• Fungi, wet or dry rot or bacteria coverage: If your property becomes infected with fungi, this coverage may help with the costs associated with testing and repairs.
• Earthquake: Although earthquakes are generally infrequent for where NJM writes policies, earthquake endorsements are available in Maryland, New Jersey, Ohio and Pennsylvania.

Auto-Owners

Best budget home insurance company

Rating: 3.2 stars out of 5

3.2 Bankrate Score

JD Power: 825/1,000 AM Best: A++

Average annual premium

^$ 1,049 for $250k dwelling coverage

Auto-Owners Review Get a personalized quote

Average annual premium

^$ 1,049 for $250k dwelling coverage

Auto-Owners Review Get a personalized quote

• Overview
• Pros and cons
• Compare rates
• Additional Coverage

Why Auto-Owners may be for budget home insurance: Auto-Owners’ average premiums tend to be lower than the national average and lower than average premiums in the 26 states in which it operates. Despite its limited availability, Auto-Owners still won a 2023 Bankrate award for the best budget home insurance company. Auto-Owners even offers discounts to make home insurance that much more affordable. And homeowners can add optional coverage to build out their policy.

Availability: Auto-Owners is available in Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Virginia and Wisconsin. 

How to get started: You can visit Auto-Owners’ website to locate a nearby agent to prepare a quote.

Pros

• Average home insurance premiums may be cheaper than state and national average
• Local agents available to help with policy servicing

Cons

• Not available nationwide
• Limited digital tools

	Average annual rate	Average monthly rate
Auto-Owners	$1,049	$87
NJM	$371	$31
Travelers	$1,249	$104
Amica	$2,996	$250
Chubb	$1,775	$148
Allstate	$1,340	$112
USAA	$969	$81
Lemonade	Not available	Not available
State Farm	$1,462	$122
Erie	$957	$80
National average	$1,428	$119

Home insurance premiums from Auto-Owners tend to fall on the cheaper side of the spectrum, but there may be policy endorsements worth adding for a fee.

• Ordinance or law coverage: If your town’s local building codes have changed since the last time your home was updated, this coverage may help with the additional construction or repair costs to get it up to code. This typically only applies to necessary repairs that result from a covered loss, not to general upgrades.
• Homeowners plus: This package can help cover property damage from appliance leaks. Additionally, it can raise coverage limits for instances like power outages, food spoilages from faulty refrigerators and more.
• Home cyber protection: This takes identity theft coverage one step further by covering financial losses related to fraud and extortion. 

State Farm

Best for local agents

Rating: 3.2 stars out of 5

3.2 Bankrate Score

JD Power: 829/1,000 AM Best: A++

Average annual premium

^$ 1,462 for $250k dwelling coverage

State Farm Review Get a personalized quote

Average annual premium

^$ 1,462 for $250k dwelling coverage

State Farm Review Get a personalized quote

• Overview
• Pros and cons
• Compare rates
• Additional Coverage

Why State Farm may be best for local agents: State Farm is a highly rated, historically financially strong insurer with more than 19,000 exclusive agents throughout the U.S. Compared to other home insurance companies, State Farm’s agency footprint is abundant, which might be attractive if you like handling your insurance needs locally and in person. Its low NAIC complaint index for home insurance and above-average J.D. Power score indicate that State Farm home insurance policyholders are generally satisfied with the company’s service. 

Availability: Coverage is available in all states except Massachusetts and Rhode Island. As of May 2023, State Farm is no longer accepting new home insurance policy applications in California. 

How to get started: State Farm makes getting a homeowners insurance quote easy. You can get a quote online, call 800-782-8332 or visit a State Farm agency in your area.

Pros

• “Superior” financial strength rating per AM Best
• Higher-than-average J.D. Power overall satisfaction score

Cons

• Fewer discounts than some competitors
• Not currently available nationwide

	Average annual rate	Average monthly rate
State Farm	$1,462	$122
Auto-Owners	$1,049	$87
NJM	$371	$31
Travelers	$1,249	$104
Amica	$2,996	$250
Chubb	$1,775	$148
Allstate	$1,340	$112
USAA	$969	$81
Lemonade	Not available	Not available
Erie	$957	$80
National average	$1,428	$119

In conjunction with its vast network of local agents, State Farm offers a healthy amount of policy add-ons to choose from to help you shape your perfect policy:

• Home systems coverage: This offers financial protection if items like an AC unit or refrigerator need to be repaired or replaced.
• Dwelling foundation coverage: This coverage can help pay for repairs if the foundation of your home cracks, settles or is otherwise damaged.
• Premier Service Program: This is not a coverage add-on as much as it is an optional service. With State Farm’s Premier Service Program, you can work with insurer-approved contractors and repairs are covered for up to five years for a covered loss. This program is not available in every state.

Erie

Best for robust coverage

Rating: 3.1 stars out of 5

3.1 Bankrate Score

JD Power: 827/1,000 AM Best: A+

Average annual premium

^$ 957 for $250k dwelling coverage

Erie Review Get a personalized quote

Average annual premium

^$ 957 for $250k dwelling coverage

Erie Review Get a personalized quote

• Overview
• Pros and cons
• Compare rates
• Additional Coverage

Why Erie may be best for robust coverage: Erie offers numerous coverage options, from water backup to guaranteed home replacement coverage, to help you personalize a policy that fits your specific coverage needs. Erie is a regional insurer, so it is only an option for homeowners in 12 states and Washington, D.C. But if you live in an area that Erie services, you may find the insurer appealing for its array of optional coverage types, high overall customer satisfaction scores and strong financial standing.

 

Availability: Coverage is available in Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, Washington, D.C., West Virginia and Wisconsin.

 

How to get started: Erie only provides quotes through its distribution network of local independent agents. The company’s website has a tool that could help you find an agent and even select a preferred language.

Pros

• Low average premiums
• Higher-than-average J.D. Power overall satisfaction score

Cons

• Limited mobile app accessibility and usability compared to other insurance carriers
• Not available nationwide

	Average annual rate	Average monthly rate
Erie	$957	$80
State Farm	$1,462	$122
Auto-Owners	$1,049	$87
NJM	$371	$31
Travelers	$1,249	$104
Amica	$2,996	$250
Chubb	$1,775	$148
Allstate	$1,340	$112
USAA	$969	$81
Lemonade	Not available	Not available
National average	$1,428	$119

Erie offers its policyholders three ErieSecure home insurance bundle packages standard from its baseline home insurance policy: Advantage, Plus and Select. Each bundle has its own standard, pre-included coverage, as well as add-on options:

• Advantage: As Erie’s entry bundle, this has heightened coverage limits on theft and lost valuables, and includes identity protection coverage.
• Plus: This includes the same as the Advantage bundle, but with more coverage for your home’s roof and siding. There is up to $10,000 of service line coverage (for cable lines, electric wires and more), with optional sewer backup coverage.
• Select: This is Erie’s most robust home insurance plan. It incorporates everything from the Advantage and Plus bundle tiers with even higher limits. It also offers the option to add equipment breakdown coverage.

If you want to take some of the guesswork out of structuring a home insurance policy, choosing one of Erie’s pre-selected plans could be a smart choice.

• See home insurance rates by state

  State	Average annual premium	Average monthly premium
  Alabama	$1,631	$136
  Alaska	$1,056	$88
  Arizona	$1,268	$106
  Arkansas	$2,123	$177
  California	$1,225	$102
  Colorado	$2,152	$179
  Connecticut	$1,244	$104
  Delaware	$679	$57
  Florida	$1,981	$165
  Georgia	$1,394	$116
  Hawaii	$382	$32
  Idaho	$905	$75
  Illinois	$1,410	$117
  Indiana	$1,225	$102
  Iowa	$1,318	$110
  Kansas	$3,083	$257
  Kentucky	$2,009	$167
  Louisiana	$1,992	$166
  Maine	$947	$79
  Maryland	$1,164	$97
  Massachusetts	$1,199	$100
  Michigan	$1,527	$127
  Minnesota	$1,930	$161
  Mississippi	$1,900	$158
  Missouri	$1,769	$147
  Montana	$1,736	$145
  Nebraska	$2,951	$246
  Nevada	$889	$74
  New Hampshire	$736	$61
  New Jersey	$775	$65
  New Mexico	$1,789	$149
  New York	$1,506	$126
  North Carolina	$1,294	$108
  North Dakota	$1,900	$158
  Ohio	$1,140	$95
  Oklahoma	$3,659	$305
  Oregon	$723	$60
  Pennsylvania	$760	$63
  Rhode Island	$1,223	$103
  South Carolina	$1,172	$98
  South Dakota	$2,105	$175
  Tennessee	$1,755	$146
  Texas	$1,967	$164
  Utah	$696	$58
  Vermont	$658	$55
  Virginia	$887	$74
  Washington	$948	$79
  Washington, D.C.	$893	$74
  West Virginia	$1,125	$94
  Wisconsin	$890	$74
  Wyoming	$954	$79

• 1. Understand how much coverage you need.

  Dwelling coverage is usually the first to be established on a home policy since the coverage limits for other structures, personal property and loss of use are based on percentages of the dwelling's insured value. Most homeowners insurance policies cover the home's replacement cost value, which considers the cost of labor and building materials needed to repair the home — not the market value. Using a replacement cost estimator that calculates factors like square footage and building materials will give you a good idea of how much home insurance you need.

• 2. Estimate what you need insured.

  Once you know how much you need for dwelling coverage, consider any other structures on your property, such as a fence, detached garage or inground swimming pool. Create a home inventory of your personal property, taking into account any high-value items that might benefit from a scheduled personal property endorsement. If you are concerned that your structures or personal property need additional coverage,  an insurance agent can help review the coverage limits to ensure you have the right amount of insurance. Depending on where your home is located, you may also need flood or earthquake insurance, which is purchased separately.

• 3. Choose which insurance companies to request a quote from.

  Researching the top home insurance companies can reveal financial strength ratings and customer service reviews, which can help you narrow down your options. Requesting home insurance quotes will give you a better picture of policy offerings, estimated premiums and discount opportunities. Requesting quotes from more than one carrier will give you the best chance to see which company offers the best coverage for your needs and budget. Additionally, depending on how you want to manage your policy, this can be a great way to familiarize yourself with the company’s online services or connect with local insurance agents.

• 4. Finalize the policy.

  Once you have made a decision, you’ll need to make a payment to bind, or finalize, the policy. If you are switching carriers, you can choose to have your new policy begin when the old one ends or to have your new policy start immediately. If the latter is the case, you’ll need to issue a request to your old insurance company to cancel the policy and request a refund for any unused premium.

• What is homeowners insurance and how does it work?

  Homeowners insurance is an agreement between you, the homeowner, and an insurance company. You agree to pay a certain amount — the policy premium — in exchange for the coverage outlined in your policy. Your policy is broken down into individual coverage types, including dwelling coverage (for the structure of your home), personal property coverage (for your belongings) and liability coverage (for your liability exposures).

  If you have an HO-3 or HO-5 policy, which are the most common types of policies, your policy covers the structure of your home for any type of damage that isn’t specifically excluded, like floods or earthquakes. HO-3 policies provide personal property coverage for certain insurance perils, or types of damage, while HO-5 policies also cover your property for anything that isn’t excluded. If you are faced with a sudden and unexpected expense, such as a fire, damage from a windstorm or lawsuit over injuries sustained on your property, your home insurance may step in to help you cover the financial fallout.

• Do I need home insurance?

  Unlike car insurance, homeowners insurance is not a legal requirement in any state. However, if you have a mortgage or any other home loan, your lender will almost certainly require you to maintain coverage (at least until your home is fully paid for). However, owning your home outright doesn’t necessarily mean you don’t need homeowners insurance. After all, your home may be the most significant investment you make in your lifetime, and an uninsured loss could potentially have devastating consequences.

   

  Additionally, homeowners insurance typically provides financial protection if someone hurts themselves on your property and sues you. This coverage may help shield you from out-of-pocket expenses, wage garnishment or retirement liquidation if you don’t have the cash to pay a court-ordered settlement. Although homeowners insurance is a personal choice if you fully own your home, most insurance and finance professionals agree that it's typically a good idea to have.

• Which home insurance company has the highest customer satisfaction?

  To measure customer satisfaction, we looked at ratings from J.D. Power and the NAIC complaint index. By those two metrics, Amica and American Family receive the highest marks for customer satisfaction. Amica took the top spot in the 2022 J.D. Power Home Insurance Study for customer satisfaction, scoring 849 out of a possible 1,000 points. American Family trailed closely behind with a score of 842. Coincidentally, both home insurance providers received the same NAIC complaint index of 0.13. 

  Reviewing third-party ratings can be an effective way to determine how good a provider’s customer service is, but it does not have to stop there. If your co-worker, neighbor, in-laws or friends use a particular insurance company, it can be helpful to get their opinions, as well.

• How are home insurance claims paid?

  The exact home insurance payout process may differ from provider to provider, but it generally follows an established pattern. After you file a claim, your insurance provider will typically send a claims adjuster to your home to assess the damage. From there, if there are multiple categories of damage, your insurer will usually send you different checks for different categories of damage. Insurers tend to pay out settlements in multiple installments. To receive the final check, you may need to pass a home inspection once all the repairs are finished. 

  If you have a mortgage on your home, the checks from your insurer usually are made out to both you and your financial lender — with the exception of additional living expenses, which tend to be paid directly to you. It’s important to note that your insurer may require your mortgage lender to endorse any claims checks before you are able to cash them. In other cases, the contractor you hire may request that you sign a direction to pay form that allows them to be paid by your insurer directly. 

• How do I file a home insurance claim?

  The exact steps of filing a home insurance claim may vary depending on your carrier, but in general, these are the steps you can expect to follow after an accident when filing a home insurance claim: 

  1. File a police report, if needed. Depending on the type of incident that has occurred, you may want to file a police report. If you’ve done this already, your insurance company may ask for the police report number as well.
  2. Notify your insurance company. Many insurance companies now offer the option to file a claim online or through their mobile app, but you can also call the claims hotline or reach out to your insurance agent.
  3. Document the damages. Take as many pictures as you can of the incident. You may also want to obtain security camera footage, if available, as well as speak to others who could serve as witnesses. 
  4. Minimize future damage. Depending on the severity of the incident, take appropriate actions to prevent further loss. Temporary repairs — such as boarding up windows, covering roofs and openings with plastic sheeting and moving items to a more secure location — are usually reimbursed by your insurer since it saves them money in the long run.