Best homeowners insurance companies for October 2021

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Homeowners insurance can provide financial protection for you and your family against unexpected events that damage or destroy your home, or if injuries to others occur on the premises. Having a policy tailored to your needs can give you peace of mind that a costly claim will not cause you financial distress. To help you find the best option for your unique circumstances, Bankrate analyzed the top homeowners insurance companies in the U.S. for 2021. We found that USAA and State Farm may be great choices for many homeowners, while Lemonade topped our list for providing tech-savvy and low-cost home insurance.

Bankrate’s insurance editorial team reviewed dozens of homeowners insurance companies across the nation, paying particular attention to those that rank highly by third parties in key market areas. Using 2021 average annual premiums from Quadrant Information Services, available coverage options, discounts, overall customer satisfaction and financial strength as measures — along with our proprietary Bankrate Score — we identified property insurers that may be great options for the majority of homeowners across the U.S.

Comparing the best home insurance companies

When buying a homeowners insurance policy, several attributes of each company may be important to consider, including average annual premiums, available coverage options, ability to handle claims, customer satisfaction and financial stability. Bankrate utilized market share percentages, customer satisfaction ratings from the 2021 J.D. Power U.S. Home Insurance Study and the 2021 U.S. Property Claims Satisfaction study, financial strength ratings from major credit rating agencies, as well as 2021 average quoted premiums from Quadrant Information Services to search for the best homeowners insurance companies.

The rates below are based on a homeowner having $250,000 in dwelling coverage, the primary coverage component of any standard home insurance policy that helps pay to repair or rebuild your home after a covered loss. The property insurance companies we chose to feature offer a variety of coverage options, a combination of competitive rates and discount options, plus unique features that allow you to customize your policy to your needs.

Home insurance company Best for Bankrate Score Average annual premium for $250K dwelling coverage
USAA* Overall 4.8 $992
State Farm Overall 4.7 $1,503
Erie Robust coverage 4.6 $897
NJM Unique discounts 4.6 $355
Lemonade Digital experience 4.2 **Unavailable
Amica Customer service 4.2 $2,644
Nationwide High-value home coverage 4.0 $1,042
Allstate Insurance educational resources 3.8 $1,458

*Overall standing affected by limited data availability in the states where coverage is offered.

USAA: Best overall

Why USAA may be best overall: Although USAA only offers coverage to active-duty military members, veterans and their immediate families, the company’s consistently high customer service scores, robust coverage options and low average premium across the country make it a great option overall to consider for those who qualify.

In addition to its average premium being lower than the national average, USAA offers a few homeowners insurance discounts, including savings for being claims-free for five years, purchasing multiple policies (bundling home and auto insurance) and having a protective device like a home security system. Unique add-ons, such as coverage for military uniforms for active duty or deployed policyholders, are also offered.

  • Availability: All 50 states and the District of Columbia
  • J.D. Power: 882/1,000 points
  • AM Best: A++ (Superior)

*Not officially ranked due to eligibility restrictions

Learn more: USAA Insurance review

State Farm: Best overall

Why State Farm may be best overall: State Farm is a highly rated, financially strong insurer with more than 19,000 local agents throughout the U.S. For homeowners looking for a top-rated insurer, State Farm has a major presence in the industry.

State Farm is the largest home insurance company in the country based on direct premiums written, with over 17%of the total market share. The carrier provides multiple insurance products in addition to its other financial service offerings. The company’s agency footprint is abundant, which might be attractive if you like handling your insurance needs locally and in person. State Farm is not currently writing new homeowners policies in Massachusetts or Rhode Island, although existing home policies are still serviced in those two New England states.

  • Availability: 48 states and the District of Columbia (for new business)
  • J.D. Power: 835/1,000 points
  • AM Best: A++ (Superior)

Learn more: State Farm Insurance review

Erie: Best for robust 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 customize a policy that fits your specific coverage needs.

Erie is a super-regional insurer, so it is only an option for homeowners in select locations. But if you live in an area that Erie services, you may find the insurer appealing for its numerous optional coverage types, high overall customer satisfaction scores and strong financial standing.

  • Availability: 12 states and the District of Columbia
  • J.D. Power: 835/1,000 points
  • AM Best: A+ (Superior)

Learn more: Erie Insurance review

NJM: Best for unique discounts

Why NJM may be best for unique discounts: New Jersey Manufacturers, or NJM, is a super-regional property and casualty insurer that offers a host of savings opportunities for its home insurance policyholders.

Although its availability is limited, NJM may be a great choice for customers living in Connecticut, Maryland, New Jersey, Ohio or Pennsylvania who are looking for ways to save on their home insurance. The company’s premiums are far below the national average, and plenty of discounts are available — like savings for having a backup generator, a home alarm system or storm shutters (in some states). However, keep in mind that the specific type of generator, alarm system or storm shutters may affect the savings you receive.

  • Availability: 5 states
  • J.D. Power: N/A
  • AM Best: A+ (Superior)

Lemonade: Best for digital experience

Why Lemonade may be best for digital experience: Lemonade’s artificial intelligence and digital-first approach to 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 an advanced mobile app, which earned a 4.4 out of 5.0 rating from Android users and a 4.9 out of 5.0 rating for its iOS interface. Claims are filed through the app and most are settled using Lemonade’s AI technology. The interface can process simple claims incredibly quickly; the fastest claim time recorded was just three seconds!

Lemonade’s home insurance is not yet rated by J.D. Power for customer service, but the carrier earned the top ranking for renters insurance in the 2021 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.

  • Availability: 23 states and the District of Columbia
  • Demotech: A (Exceptional)*

*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 awards Lemonade the top position for renters insurance in its 2021 Home Insurance Study.

Learn more: Lemonade Insurance review

Amica: Best for customer service

Why Amica may be best for customer service: Amica’s consistently highly rated claims service may be ideal for policyholders seeking a positive customer service experience. Amica earned the highest official ranking in the 2021 J.D. Power U.S. Home Insurance Study for national insurers. In addition, Amica earned the top spot in J.D. Power’s annual Property Claims Study for nine consecutive years between 2012 and 2020 before sliding to fourth place in the 2021 study. High customer satisfaction is coupled with a “Superior” AM Best rating for financial strength.

  • Availability: 48 states and the District of Columbia
  • J.D. Power: 854/1,000
  • AM Best: A+ (Superior)

Nationwide: Best for cheap rates for high-value homes

Why Nationwide may be best for cheap rates for high-value homes: Offered through its Nationwide Private Client subsidiary, the company’s rates are particularly competitive for high-value homes, based on Bankrate’s study of 2021 quoted annual premiums.

Compared to the national average premium for homes that carry $750,000 in dwelling coverage, which averages $2,568 per year, Nationwide’s rates average $1,969 per year — a difference of about $600. Among national property insurers, Nationwide’s rates for high-value homes are highly competitive. In addition, Nationwide also earns a higher-than-average claims satisfaction score from J.D. Power and offers a variety of coverage options for added financial protection.

  • Availability: 43 states and the District of Columbia
  • J.D. Power: 812/1,000
  • AM Best: A+ (Superior)

Learn more: Nationwide Insurance review

Allstate: Best for educational resources

Why Allstate may be best for educational resources: Abundant informational resources can help policyholders better understand their home insurance policy and make informed choices about coverage.

Allstate offers numerous educational resources on its website to help first-time buyers navigate the homeowners insurance buying process. For example, Allstate’s Common and Costly Claims tool provides information about the most common and expensive insurance claims by ZIP code, which can help you assess the need for specific coverage options on your policy.

  • Availability: All 50 states and the District of Columbia
  • J.D. Power: 829/1,000
  • AM Best: A+ (Superior)

Learn more: Allstate Insurance review

Additional home insurance providers to consider

Chubb: Best for luxury home coverage

Why Chubb may be best for luxury home coverage: Policies are tailored specifically to the needs of luxury homeowners and its personalized risk consulting services may reassure policyholders that their financial protection is suited to their exact circumstances.

If you own a luxury home, Chubb’s specialized homeowners insurance policies may be a good fit. To ensure you have adequate financial protection for your home and family, Chubb offers risk consulting, which involves a trained risk consultant evaluating your home’s features to determine your home’s rebuilding cost. Chubb policyholders also have access to the company’s HomeScan tool, which may help them identify potential issues in their homes before they cause damage claims.

  • Availability: All 50 states and the District of Columbia
  • J.D. Power: 801/1,000
  • AM Best: A++ (Superior)

Learn more: Chubb Insurance review

Safeco: Best for home warranties

Why Safeco may be best for home warranties: Home insurance isn’t designed to cover normal wear and tear, but Safeco offers homeowners the added perk of a home warranty, in partnership with American Home Shield, that can help with various types of unexpected expenses.

A Liberty Mutual company, Safeco offers numerous home insurance endorsements that could allow customers to tailor their coverage to their unique needs, including equipment breakdown coverage, service line coverage and identity theft coverage. You can even round out your coverage with a home warranty that could help pay for damage that standard property insurance typically doesn’t cover, like normal deterioration.

  • Availability: 48 states
  • J.D. Power: 810/1,000
  • AM Best: A (Excellent)

Learn more: Safeco Insurance review

What is homeowners insurance?

Homeowners insurance protects your finances if your home is damaged or destroyed by a covered peril. Your policy will likely also include liability coverage, which provides you with essential financial protection if someone is hurt on your property or their belongings are damaged and you are found at fault.

Home insurance isn’t required by law, but if you have a mortgage or home loan, your lender will likely require you to have a policy. Even if your home is paid off, industry experts strongly recommend you consider purchasing home insurance coverage. A home insurance policy is designed to help you avoid financial stress or devastation if your home is extensively damaged.

What does homeowners insurance cover?

Home insurance covers damage to your home, detached structures and personal property from the losses indicated in your policy. Your liability exposure is likely also covered. Standard policies typically contain these coverages:

  • Dwelling coverage: This is the main coverage in homeowners insurance and covers your home and any attached structures from certain types of damage, like fire, theft and wind.
  • Other structures coverage: Also called “detached structures coverage,” this is usually 10-20% of your dwelling amount and covers things like fences, sheds and gazebos.
  • Personal property coverage: This part of your policy covers your belongings, like your furniture, clothing and decor. Your personal property coverage is generally 50-75% of your dwelling amount, although you might be able to increase it if necessary.
  • Liability coverage: If you damage someone’s belongings or if someone is hurt on your property and you are found at fault, your liability coverage may pay the damages and your legal fees.
  • Additional living expenses: Additional living expenses (ALE), also known as loss of use, pays the costs of living while away from your home if it’s uninhabitable due to damage caused by a covered property claim.

Most standard home insurance policies also include medical payments to others coverage, which pays for guest injuries regardless of fault, up to the coverage limit. Keep in mind too that all policies are different; you can often add endorsements to bolster your policy with more coverage. And home insurance comes in several different types, all of which cover different types of losses.

How to choose the best homeowners insurance policy

Dozens of home insurance companies might be available in your area, so how do you choose the right provider for you? Here’s a few steps you can take:

  • Understand your needs. Do you live in an area where wind damage is common? How much would your home cost to rebuild? Do you have specialty belongings that might need additional coverage? Understanding what you need from a home insurance company is often the first step to choosing the best carrier for your circumstances.
  • Determine what matters to you. Would you feel more comfortable with a local agent who knows the area and can help you navigate the insurance buying process? Or do you like to handle your policies digitally? Is customer service important to you? Analyzing third-party reviews might help you decide if a company will be a good fit.
  • Shop around. Once you know what you are looking for in a policy, you can get quotes from several different property insurers. Most companies offer a different combination of optional coverage types and discounts, so getting a minimum of three quotes helps you compare, according to the Insurance Information Institute (Triple-I). Also, rates can vary significantly between companies, even for the same level of coverage.
  • Reevaluate your coverage occasionally. Life changes, and your insurance should change with it. If you experience a life event — maybe you get married, have a child or suffer a home insurance loss — you should talk to your insurance company or agent to evaluate your needs. This helps to ensure you have the coverage and policy features that work best for you. The Triple-I recommends conducting an annual insurance review with your agent to ensure you have the right amounts and types of coverage.

Working with a licensed insurance agent can be very helpful during the process of purchasing homeowners coverage. An agent can assess your needs and help you choose the options that are best for you.

Why location matters when choosing home insurance

Home insurers use multiple rating factors to determine your premium, and location — including state, city, ZIP code, claims history and proximity to a fire station and fire hydrants — can have a substantial impact on the cost of coverage. Nationally, the average cost of homeowners insurance is $1,312 per year for $250,000 in dwelling coverage. However, different areas of the country come with distinct risk factors, which affect premiums. For example, a homeowner living along the coastline may need to consider how hurricanes might affect their property, while someone in the Rocky Mountain region may need to consider the impacts of heavy snow and wildfires.

Becoming familiar with your state’s risks and common causes of loss could help you make a more educated decision regarding your homeowners insurance coverage. Links to Bankrate’s picks for the best homeowners insurers in your state are included in the table below.

Frequently asked questions

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on 40-year-old male and female homeowners with a clean claim history, good credit and the following coverage limits:

  • Coverage A, Dwelling: $250,000
  • Coverage B, Other Structures: $25,000
  • Coverage C, Personal Property: $125,000
  • Coverage D, Loss of Use: $50,000
  • Coverage E, Liability: $300,000
  • Coverage F, Medical Payments: $1,000

The homeowners also have a $1,000 deductible and a separate wind and hail deductible (if required).

These are sample rates and should be used for comparative purposes only. Your quotes will differ.

Credit-Based Insurance Scores: Rates were calculated based on the following insurance credit tiers assigned to our homeowners: “poor, average, good (base), and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. The following states do not allow credit to be a factor in determining home insurance rates: California, Maryland, Massachusetts, Michigan, Washington.

Alarm discount:
Rates were calculated based on applying a discount for having a Central Station home alarm system monitored by a third-party service.

Bankrate Scores

Bankrate Scores primarily reflect a weighted rank of industry-standard ratings for financial strength and customer experience in addition to analysis of quoted annual premiums from Quadrant Information Services, spanning all 50 states and Washington, D.C. We know it is important for homeowners to be confident their financial protection covers the likeliest risks, is priced competitively and provided by a financially strong property insurer with a history of positive customer support and exceptional claims-paying ability. In our evaluation, third-party ratings from J.D. Power, AM Best, Standards & Poor’s, National Association of Insurance Commissioners and Moodys had a significant impact on the companies’ Bankrate Scores.

Our top picks for “best for” reflect a combination of Bankrate Scores and availability of coverage to homeowners across the country, in addition to the specific qualities associated with each insurer.

Written by
Cate Deventer
Insurance Writer & Editor
Cate Deventer is a writer, editor and insurance professional with nearly a decade of experience in the insurance industry as a licensed insurance agent.
Edited by
Insurance Editor
Reviewed by
Director of corporate communications, Insurance Information Institute