We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
How We Make Money.
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
Best homeowners insurance companies for August 2022
June Sham is an insurance writer for Bankrate. Before joining the team, she worked for nearly three years as a licensed producer writing auto, property, umbrella and earthquake policies.
Angelica Leicht is an insurance editor on the Bankrate team. She is truly passionate about helping readers make well-informed decisions for their wallets, whether the goal is to find the right comprehensive auto policy or the best life insurance policy for their needs.
Reviewed by
Mark FriedlanderDirector of corporate communications, Insurance Information Institute
Mark Friedlander is director of corporate communications at III, a nonprofit organization focused on providing consumers with a better understanding of insurance.
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict
, this post may contain references to products from our partners. Here's an explanation for
.
Our content is backed by
Coverage.com, LLC, a licensed entity (NPN: 19966249). For more information, please see our
.
Why you can trust Bankrate
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices.
We’ve maintained this reputation for over four decades by demystifying the financial decision-making
process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy,
so you can trust that we’re putting your interests first. All of our content is authored by
highly qualified professionals and edited by
subject matter experts,
who ensure everything we publish is objective, accurate and trustworthy.
Our insurance team is composed of agents, data analysts, and customers like you. They focus on the points consumers care about most — price, customer service, policy features and savings opportunities — so you can feel confident about which provider is right for you.
We guide you throughout your search and help you understand your coverage options.
We provide up-to-date, reliable market information to help you make confident decisions.
We reduce industry jargon so you get the clearest form of information possible.
All providers discussed on our site are vetted based on the value they provide. And we constantly review our criteria to ensure we’re putting accuracy first.
Editorial integrity
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
Key Priniciples
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
Insurance Disclosure
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
On This Page
On This Page
On This Page
With so many home insurance companies on the market, it can be tricky to know which one is best for you. To help you make a decision, Bankrate’s insurance editorial team researched over 50 home insurance companies. We compared carriers based on average annual premiums, policy features, financial strength and customer service rankings, and more to build a curated list of the best home insurance companies.
Based on our findings, USAA and State Farm tied for best overall home insurance company, while Lemonade might be the ideal choice for tech-enabled low-cost home insurance. But it’s important to find a home insurance carrier that fits your needs and coverage requirements, so if these carriers don’t work for you, check out our full list of property insurers that may be great options for the majority of homeowners across the U.S.
This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions.
Compare home insurance rates
Answer a few questions to see personalized rates from top carriers.
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions.
Compare home insurance rates
Answer a few questions to see personalized rates from top carriers.
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
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 premium. It ranked as one of the best home insurance companies overall in our 2022 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.
*Not officially ranked with J.D. Power due to eligibility restrictions
Perks
Low average premiums
Military-focused coverage options
Drawbacks
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*
$978
$82
State Farm
$1,359
$113
Erie
$969
$81
NJM
$373
$31
Amica
$2,851
$238
Nationwide
$1,076
$90
Allstate
$1,300
$108
National average
$1,383
$115
How to get started: You can get a USAA home insurance quote by calling 800-531-8722 or visiting one of its few office locations. Online quotes are also available for home insurance.
Why State Farm may be best overall: State Farm is a highly rated, financially strong insurer with more than 19,000 local exclusive agents throughout the U.S. It tied with USAA for best home insurance companies overall in our 2022 Bankrate Awards. 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.
Availability: Coverage is available in all states except Massachusetts and Rhode Island.
Perks
“Superior” financial strength rating
Higher-than-average J.D. Power overall satisfaction scores
Drawbacks
Higher-than-average premiums
Lower-than-average J.D. Power claims satisfaction scores
Average annual rate
Average monthly rate
State Farm
$1,360
$113
USAA*
$978
$82
Erie
$969
$81
NJM
$373
$31
Amica
$2,851
$238
Nationwide
$1,075
$90
Allstate
$1,300
$108
National average
$1,383
$115
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.
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 super-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 numerous 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.
Perks
Low average premiums
Higher-than-average J.D. Power overall satisfaction scores
Drawbacks
Limited mobile app accessibility and usability compared to other insurance carriers
Lower-than-average J.D. Power claims satisfaction scores
Average annual rate
Average monthly rate
Erie
$969
$81
USAA*
$978
$82
State Farm
$1,359
$113
NJM
$373
$31
Amica
$2,851
$238
Nationwide
$1,076
$90
Allstate
$1,300
$108
National average
$1,383
$115
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.
Why NJM may be best for unique discounts: New Jersey Manufacturers, or NJM, is a regional property and casualty insurer, but may be one of the best home insurance companies for homeowners who want a host of savings opportunities. 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: Coverage available in Connecticut, Maryland, New Jersey, Ohio and Pennsylvania.
Perks
Low average rates
Numerous discounts
Drawbacks
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
$373
$31
USAA*
$978
$82
State Farm
$1,360
$113
Erie
$969
$81
Amica
$2,851
$238
Nationwide
$1,076
$90
Allstate
$1,300
$108
National average
$1,383
$115
How to get started: You can get an NJM quote by calling 800-232-6600 or using the online quote tool.
Best home insurance company for digital experience
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 three seconds.
Availability: Coverage available in Arizona, California, 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.
Perks
Innovative use of technology
Fast claims service
Top renters insurance provider
Drawbacks
Limited third-party rankings
No physical agency locations
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.
*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.
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.
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. The company earned the top spot in the 2022 J.D. Power Property Claims Study, which it has held for ten consecutive years since 2012. Its 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.
Perks
Highly rated claims service
Dividend policies may allow you to recoup some of your premium
Drawbacks
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
$2,851
$238
USAA*
$978
$82
State Farm
$1,359
$113
Erie
$969
$81
NJM
$373
$31
Nationwide
$1,076
$90
Allstate
$1,300
$108
National average
$1,383
$115
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.
Best home insurance company for high-value home coverage
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 2022 quoted annual premiums. Compared to the national average premium for homes that carry $750,000 in dwelling coverage, which averages $3,414 per year, Nationwide’s rates average $2,884 per year — a difference of $530.
Availability: Coverage is available in all states except Alaska, New Mexico, Louisiana, Florida, New Jersey and Massachusetts.
Perks
Competitive premiums for high-value homes
Numerous optional coverage types help you personalize your policy
Drawbacks
Poorer-than-average customer satisfaction scores from J.D. Power and the NAIC
Above-average NAIC complaint index indicates that Nationwide receives more complaints compared to similar insurers in the market
Average annual rate
Average monthly rate
Nationwide
$1,076
$90
USAA*
$978
$82
State Farm
$1,359
$113
Erie
$969
$81
NJM
$373
$31
Amica
$2,851
$238
Allstate
$1,300
$108
National average
$1,383
$115
How to get started: You can get a homeowners insurance quote from Nationwide in a few ways, such as by using the online quote feature, calling 877-669-6877 or by working with a local independent agent that represents the company.
Best home insurance company for educational insurance 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: Coverage is available in all states.
Perks
Educational insurance information available online
Common and Costly Claims tool could help you prepare for and mitigate home damage
“Superior” financial strength rating
Drawbacks
Below-industry-average J.D. Power customer satisfaction score
Default coverage amount for personal property is lower than some competitors
Average annual rate
Average monthly rate
Allstate
$1,300
$108
USAA*
$978
$82
State Farm
$1,359
$113
Erie
$969
$81
NJM
$373
$31
Amica
$2,851
$238
Nationwide
$1,076
$90
National average
$1,383
$115
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.
This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions.
Compare home insurance rates
Answer a few questions to see personalized rates from top carriers.
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions.
Compare home insurance rates
Answer a few questions to see personalized rates from top carriers.
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
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.
Perks
Coverage can be tailored for luxury homes
HomeScan tool may help identify issues before they cause claims
Drawbacks
Lower-than-average overall customer satisfaction from J.D. Power
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.
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: Coverage is available in all states except Delaware, Hawaii and Washington, D.C.
Perks
Home warranty option can help cover expenses not covered by standard insurance
Numerous endorsements allow you to customize your insurance policy
Drawbacks
Below-average J.D. Power scores for overall and claims satisfaction
Policies can be quoted online but must be purchased through a local independent agent
Not available in Delaware, Hawaii or the District of Columbia. How to get started: Safeco allows you to start quotes online, but policies must be purchased from an independent agent.
How to get started: Safeco allows you to start quotes online, but policies must be purchased from an independent agent.
How Bankrate picked the best homeowners insurance companies
To find the best homeowners insurance companies, Bankrate’s insurance experts first looked at each carrier’s market share percentages, customer satisfaction ratings from the 2021 J.D. Power U.S. Home Insurance Study and 2021 J.D. Power U.S. Property Claims Satisfaction Study, and financial strength ratings from major credit rating agencies. We also reviewed average premium information to assess each carrier’s affordability, as well as discount opportunities to maximize further savings. Our final list of the best homeowners insurance companies includes carriers that feature a variety of coverage options, a combination of competitive rates and discount options, plus unique options that allow you to personalize your policy to your needs.
Bankrate utilizes Quadrant Information Services to analyze 2022 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.
Bankrate Scores are calculated on a five-point scale and 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.
How to compare the best home insurance companies
Each of the home insurance companies listed here have unique strengths, but not all of them will be the best fit for your needs. Before comparing the carriers, first consider your priorities. Whether that includes diverse policy options, discounts or quality customer service, knowing what your expectations are helps narrow down the list of companies from which to request a quote. During the quoting process, you’ll be able to get an estimate of how much your homeowners insurance policy might cost. You can also ask any questions about a carrier’s coverage details so that you can make the most informed choice about your policy’s inclusions.
What is the best homeowners insurance company for bundling home and auto?
Bundling home and auto insurance means you are buying both policies from the same company. Most companies offer a discount on both auto and home policies (and sometimes other policies as well) as an incentive to policyholders. This has the potential to make both policies cheaper than if you were to purchase the policies from two separate insurance companies. To help give you an idea of how much you could potentially save by bundling policies, we checked each carrier’s website or contacted them to see how significant each company’s bundling discount could be.
Keep in mind that the best carrier for you will depend on your individual needs and preferences. One way to find the right fit for your needs is to make a list of the features you are looking for in both your home and auto insurance policies. Then you can get quotes from several carriers who might match your needs.
Home insurance company
Potential typical bundle discount*
USAA
Up to 10%
State Farm
Up to $1,127 annually
Erie
Up to 20%
NJM
Not stated
Lemonade
Not stated
Amica
Up to 30%
Nationwide
Up to 20%
Allstate
Up to 25%
*Note that potential discount amounts for bundling are taken directly from the carrier website and are subject to change. Additionally, there is no guarantee that you would receive the discount advertised by the insurance company. If you want more information about bundling discounts from your insurance company, contact your insurance agent.
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 by a covered loss.
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 coverage types:
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, vandalism 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, gazebos, detached garages and in-ground swimming pools.
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.
Types of homeowners insurance policies
Given the wide variety of homes, there are many different types of homeowners insurance policies for every situation. While the standard HO-3 policy is what we typically refer to when discussing homeowners insurance, there are actually eight different policy types, each one best suited for a different type of home or insurance need:
HO-1: As the most basic type of home insurance, an HO-1 policy provides coverage for the structure of your home for named perils only. There is no coverage for your personal belongings, additional living expenses or liability. Insurers rarely use this policy form.
HO-2: This policy type offers expanded coverage for personal property, liability and additional living expenses, but for named perils only.
HO-3: Widely considered the standard home insurance policy, this policy type comes with all the coverage options in the HO-2 plus medical payments coverage. Unlike the first two types of home insurance policies, the dwelling in an HO-3 is covered on an open perils basis.
HO-4: An HO-4 is intended for renters as a solution to insure their personal belongings and provide liability coverage. As renters are not homeowners, this policy does not insure the structure of their home.
HO-5: As an open-peril policy, an HO-5 expands coverage for dwelling and personal belongings to all perils except those specifically excluded.
HO-6: A condominium owner’s policy insures the interior of their unit, as the exterior and shared spaces may be covered by the master condominium policy. It also insures the owner’s personal belongings and provides liability coverage.
HO-7: An HO-7 insurance policy is for mobile homes and manufactured homes, such as RVs, trailers, modular homes and sectional homes. It insures both the structure of the home, as well as personal belongings and liability, medical expenses and additional living expenses.
HO-8: The HO-8 policy type is a named peril policy that only covers 10 perils. It is intended for homes where the repair or replacement cost may be higher than its resale value, such as older or historical homes, or architecturally significant homes.
Types of home insurance discounts
Most major home insurance companies offer home insurance discounts that could help lower your premium. Some common categories include:
Protective devices and home monitoring discounts: Home insurance companies often offer this type of discount as an incentive for homeowners to be proactive about protecting their home with smoke alarms, security devices or a professional monitoring service.
Claims-free discount: Some home insurance companies offer an additional discount If you have been claims-free for a set number of years.
Restoration discount: These discounts are often earnable if you have recently done qualifying renovations or restorations on your home. Some companies may also offer a discount if you rebuild your home using green materials.
Billing discounts: Whether you enroll in paperless billing, automatic payments, or pay-in-full, you could earn an additional discount on your home insurance.
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, insurance costs 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 coverage 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.
How to find the best homeowners insurance policy in five common scenarios
As a first-time homebuyer, buying home insurance can be an overwhelming and exciting experience. Typically, finding home insurance comes after your offer has been accepted by the buyer, but you can request quotes earlier to see if there might be any concerns about the home. This could include wildfire or flood risks, or if the age or features of the home might pose an insurance risk. The policy won’t go into effect until the closing date and the title company will most likely issue the first year’s payment to your home insurance company.
Living in a high-risk area that is prone to natural disasters such as hurricanes, tornadoes or wildfires can make finding home insurance more tricky. To find which carriers are writing policies for properties in your ZIP code, you might consider starting off by asking your neighbors where they purchased their home insurance. You can also work with a local independent insurance agent to find the best home insurance companies in your area. Depending on your situation, you may be able to obtain insurance with your state’s FAIR plan if you can’t secure coverage, although these are meant as temporary solutions while you look for permanent home insurance.
Many home insurance companies have restrictions on dog breeds and dogs with a history of violence or prior claims. When shopping for home insurance, it’s always best to be transparent about your situation so that you know what your home insurance policy will cover. Working with an insurance agent could also help you identify home insurance options with useful coverage for your circumstance.
Home insurance personal property coverage typically has a limit on valuable items like jewelry and antiques. Some carriers may offer an increased blanket coverage to increase the base limit, or you could add a scheduled personal property endorsement for specific items. This endorsement allows you to ensure valuables for their appraised value, which is determined by the receipt, appraisal or other certified document.
Depending on how old your home is and whether it has a historical designation, some insurance companies may not accept it under their standard HO-3 policy, which is the most common type of home insurance policy. Instead, they may offer a dwelling fire policy or other policy type with limited coverage and more exclusions. In this situation, working with an insurance agent who has experience finding the best home insurance for older homes could be a great way to find coverage tailored to your needs.
Estimate what you need to be insured. Starting with your home, consider the square footage, remodels or renovation and any external structures like a swimming pool or detached garage that needs to be insured. Also take inventory of personal belongings, especially if you have any high-value items that might need a separate endorsement.
Calculate how much coverage you need. After thinking about what and how much you own, you can start to determine your dwelling, personal property and liability coverage amounts. An insurance agent can also 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.
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 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.
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 you have your new policy start immediately. If that’s 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.
How much does home insurance usually cost?
Nationally, the average cost of homeowners insurance is $1,383 per year for $250,000 in dwelling coverage. This is up about $70 from 2021. While this is useful for comparison, the typical cost of homeowners insurance will vary widely depending on personal rating factors, such as the location of your home, the year it was built and square footage. Requesting quotes from multiple carriers will give you a range of how much your home insurance is expected to cost.
Why location matters when choosing the best home insurance for you
Home insurance companies use multiple rating factors to determine your annual 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 home insurance coverage. Nationally, the average cost of homeowners insurance is $1,383 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.
This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions.
Compare home insurance rates
Answer a few questions to see personalized rates from top carriers.
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
Leaving so soon? Your custom quotes are just minutes away.
Frequently asked questions
Homeowners insurance is not a legal requirement like car insurance is in most states. However, if you have a mortgage on your home, having home insurance is likely required by your lender. Even if your home is fully paid off, it’s still a good idea to keep an active home insurance policy as part of your financial plan. Insuring what might be one of your largest assets means that there’s protection for your finances in the event of a covered loss, especially if it’s catastrophic, so that you won’t have to pay out-of-pocket for a full rebuild of your home.
The amount of home insurance coverage needed will be different for every home. You can consider some factors of your home to get started, like square footage, any detached structures and interior updates. To make this easier, home insurance companies have their own methods for calculating coverage amounts based on features of the home and costs of labor and materials in your area. They will use their rating algorithms to help you determine your dwelling coverage amount, which can affect the other coverage limits listed on your policy. You can then finetune your coverage amounts, select your liability limit and deductible amount before finalizing your policy so that you get the coverage you need at the best price for your budget. It might be best to speak with a licensed agent to help determine how much coverage is right for you.
Your homeowners insurance policy covers damage caused by many natural disasters and weather-related incidents, but not everything is covered — at least not by default. Common homeowners insurance exclusions include damage caused by floods, earthquakes, landslides, mudslides and mudflows, according to the Triple-I. If you live in a high-fire-risk area, wildfire coverage may also be excluded. You may need to purchase endorsements to secure this valuable coverage, or you might need to purchase a separate policy altogether, as is the case with flood insurance. If you aren’t sure what your policy covers and what is excluded, you can find these details in your policy documentation or you can review your coverage with your agent or insurance company.
This depends on the company you are with. Many carriers have a claims center that you can call to file a claim 24/7, and many offer online claim-filing tools. If your company has a mobile app, you might be able to file a home insurance claim via your smartphone as well. If your insurance policy is handled by a local agency, you’ll likely also be able to call the agency to file a claim. When reporting a claim, you will need to have your policy number and some information about the loss. You’ll likely need to describe what happened, when it happened and the scope of damage sustained. Capturing photos of the damage and keeping all receipts for any out-of-pocket expenses incurred related to the loss is also a good idea, as your claim representative will likely need this information.
Based on Bankrate’s analysis of average annual premiums, Erie and USAA offer some of the cheapest average home insurance rates nationwide. Other affordable carriers also include Auto-Owners, ASI Progressive, Nationwide and Travelers. Although these carriers can be great places to start looking for home insurance quotes, keep in mind that your actual premium may vary depending on where you live, the size and build quality of your home, coverage options and more. After you’ve found the home insurance that fits your budget and coverage needs, it may be helpful to consider these other ways to help save money on home insurance.
June Sham is an insurance writer for Bankrate. Before joining the team, she worked for nearly three years as a licensed producer writing auto, property, umbrella and earthquake policies.
Angelica Leicht is an insurance editor on the Bankrate team. She is truly passionate about helping readers make well-informed decisions for their wallets, whether the goal is to find the right comprehensive auto policy or the best life insurance policy for their needs.
Reviewed by
Mark FriedlanderDirector of corporate communications, Insurance Information Institute
Mark Friedlander is director of corporate communications at III, a nonprofit organization focused on providing consumers with a better understanding of insurance.