Owning a home comes with numerous responsibilities. Purchasing, understanding and maintaining an insurance policy is an integral part of your financial plan as a homeowner. But with the average cost of homeowners insurance for a $250,000 dwelling at $1,312 per year, finding a cheap home insurance policy that provides you with the protection you need may be a priority. Based on our research, the cheapest homeowners insurance comes from Erie and costs $897 per year for $250,000 in dwelling coverage.
Bankrate obtained current premium information for the largest insurance companies by market share from Quadrant Information Services. Using this information in conjunction with J.D. Power customer satisfaction scores, AM Best financial strength ratings, available coverages and discounts offered, these are our top picks for the best cheap homeowners insurance companies of 2021.
- Erie offers the cheapest homeowners insurance annual policy premium on our list at $897 for $250,000 in dwelling coverage.
- $1,312 is the average national cost of a home insurance policy for $250,000 in dwelling coverage.
- Bankrate examined average annual premiums, J.D. Power scores and AM Best financial strength ratings to determine the best cheap home insurance companies.
In this article:
- The cheapest home insurance companies
- Finding the cheapest home insurance
The cheapest home insurance companies
Although finding cheap home insurance rates may be a priority, you probably also want to find a home insurance policy that provides the coverage you need. After all, your home may be your most significant investment; you likely want to protect your finances against the risk of a loss.
Based on our research, if you are looking for the best cheap homeowners insurance options, you may want to start your search with these companies:
|Home insurance company||Average annual premium for $250,000 dwelling coverage||J.D. Power customer satisfaction score||AM Best financial stability rating|
|Erie||$897||839 / 1,000||A+|
|USAA*||$992||889 / 1,000||A++|
|Progressive||$1,026||797 / 1,000||A+|
|Nationwide||$1,042||808 / 1,000||A+|
|Travelers||$1,269||803 / 1,000||A++|
*USAA is not officially ranked by J.D. Power due to eligibility restrictions.
A good choice for first-time homebuyers on a strict budget
- Cheapest homeowners insurance on our list
- Numerous optional coverages
- Local agents
Only available in 12 states
Learn more: Erie Insurance review
A good choice for active duty military service members, veterans and their immediate families
- Low average premiums
- Military-focused coverages
- High J.D. Power scores
- Excellent AM Best financial strength score
Learn more: USAA Insurance review
A good choice for comparing rates and saving time
- Can compare quote from numerous companies from Progressive’s website
- Long list of discounts to lower premiums
- Policies are underwritten by American Strategic Insurance (ASI), which receives low customer satisfaction scores
- Limited optional coverages available
Learn more: Progressive Insurance review
A good choice for consolidating insurance and banking productsPros:
- Offers numerous types of insurance and other financial products
- Several discounts to help reduce premium
- Free annual insurance assessments offered
- Below-industry average J.D. Power score
Learn more: Nationwide Insurance review
A good choice for customizable coverage
- Long list of optional coverages to help you build a customized policy
- Unique discounts might help you save money
- Includes skills for Alexa and Echo Show
- Highest premium on our list
- Below-industry-average J.D. Power score
Learn more: Travelers Insurance review
The cheapest home insurance companies by state
Home insurance premiums vary greatly based on your geographic location. State-specific factors like the likelihood of natural disasters and the cost of building materials can affect premiums. We broke down the cheapest carriers by state to help give you an idea of where you might be able to get a cheaper rate in your area.
|State||Cheapest home insurance company||Average annual premium for $250,000 dwelling coverage|
|California||Armed Forces Insurance Exchange||$507|
|Connecticut||NBIC Holdings Group||$502|
|Indiana||Buckeye Insurance Group||$467|
|Louisiana||United Insurance Holdings Group||$597|
|New Hampshire||Main Street America Group||$398|
|North Dakota||Farmers Union Mutual||$1,070|
|Ohio||Buckeye Insurance Group||$371|
|Oregon||Mutual of Enumclaw||$317|
|Rhode Island||NBIC Holdings Group||$551|
|South Dakota||North Star Mutual||$1,345|
|Texas||Bankers Insurance Group||$563|
|Utah||Mutual of Enumclaw||$446|
Finding the cheapest home insurance
Although home insurance is not legally mandated, your mortgage lender will require you to maintain a policy. Even if you own your home without a loan, home insurance is a smart purchase; it can protect you from financial devastation if your home is damaged or destroyed. But there are things you can do to find the cheapest policy that fits your needs.
1. Evaluate your needs
Before you start shopping for coverage, determine what matters to you. Are you just looking for the lowest price? Do you need access to specialty coverages, digital tools or outstanding customer service? Once you know what you need from a home insurance company, you may be able to narrow down your choices.
2. Determine your home’s replacement cost
Although each insurance company will have its own valuation tool, it may be helpful to have an idea of how much you should insure your home for before you start shopping. That way, you can work with each company to get a quote for an appropriate amount of dwelling coverage. Just remember that your home’s replacement cost is not the same as its market value. You may want to use an online tool to determine how much your home would cost to rebuild if it were destroyed.
3. Consider your liability exposure
Most standard home insurance policies come with $300,000 in liability coverage. However, if you have a pool, trampoline, playset or host guests frequently, you may want to consider a higher liability coverage limit or even an umbrella policy. Although this will increase your rates, it could provide valuable protection against lawsuits if someone is injured.
4. Shop around
Getting insurance quotes from several home insurance providers allows you to compare rates, coverage, discounts and additional features of each company. This could help you determine if a company fits your budget and coverage needs.
5. Improve or maintain your credit score
Most homeowners insurance companies use your credit score as a rating factor, although some states ban this practice. Statistically, homeowners with lower credit are more likely to file claims. Insurance companies charge higher premiums to make up for this increased risk. Improving or at least maintaining your credit score might help you keep your home premium lower.
6. Take advantage of home insurance discounts
Home insurance discounts might help you lower your premium. Although every company offers a different selection of discounts, some common discounts include:
- Multi-policy discounts: If you insure two or more policies with the same company, like a car insurance policy and a home insurance policy, you may get a discount on each policy.
- Home safety discounts: Home with safety features like smoke detectors, fire extinguishers and security alarms often qualify for discounts.
- Loyalty discounts: The longer you stay with a company, the more likely you are to qualify for a loyalty discount.
- Claims-free discounts: If you have not filed a home insurance claim in several years, you may save money on your premium.
- New homebuyer discounts: If you have purchased your home in the last 12 months, you might qualify for a discount.
The best way to see if you are taking advantage of your company’s discount programs is to talk to your agent or a representative from your company’s customer service department. It is not always easy to find all the available discounts from an insurance company on their website.
Frequently asked questions
Will my homeowners insurance go up if I file a claim?
Yes, your homeowners insurance will probably go up if you file a claim. This is because once you have filed a claim, insurance companies view you as more likely to file more. Before filing a claim, it may be helpful to get an estimate for the damages. It may be better for your finances to pay for small repairs out of pocket. If you have suffered a large loss though, filing a claim may be the best option. You carry homeowners insurance to protect yourself against financial devastation; if you do not have the funds to repair moderate or severe damages to your home, your insurance can help.
Why does my home insurance premium keep going up?
There are a number of reasons your premium may be increasing. Each year, insurance companies file new rates with Departments of Insurance in the states they do business in. If your policy has renewed and you have not made any other changes, the company may have increased its underlying rates. This could be due to an increased number of claims being filed or a higher likelihood of claims in the area. Your coverage may also be adjusted each year to account for inflation and increased cost of materials and labor, which can increase your premium. If you added any optional coverages, you will likely pay more for your policy. And if you filed a claim, you will likely see an increase in your premium when your policy renews.
I have a lot of expensive electronics. Do I need a rider for them?
Your laptop, TV and computers are typically all covered under the personal property portion of your homeowners insurance policy. However, there may be limits in your policy regarding the maximum payout you will receive. You can often increase these limits by endorsement. It is a good idea to create a home inventory of all your personal property if you do not already have one.
However, if you use any of your electronics in the course of a business or to make money, your items may be automatically excluded from coverage. Many companies offer an endorsement for business property, but you likely need to ask your insurance company to add this option to get coverage.
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.
Why trust us
Bankrate demystifies the insurance industry by making it easier to find insurance information. Regardless of where you are in your journey, Bankrate helps you make informed decisions.
We use two key sets of customer priorities to evaluate insurance carriers and help you decide what to consider:
First: we evaluated customer satisfaction and complaints, financial strength and stability and overall costs based on average rates quoted to real drivers.
Second: we evaluated customer experience by assessing each provider’s customer service options through online capabilities and agent accessibility.