Having a home insurance policy is an integral part of your financial plan as a homeowner. But with the average cost of homeowners insurance at $1,312 per year for $250,000 in dwelling coverage, finding a cheap home insurance policy is a priority for some homeowners. Based on Bankrate’s research, the cheapest homeowners insurance comes from Erie and costs $897 per year for $250,000 in dwelling coverage.
Bankrate obtained 2021 premium information for the largest insurance companies by market share from Quadrant Information Services. Using this information in conjunction with J.D. Power’s customer satisfaction scores and AM Best’s financial strength ratings, we were able to identify some of the cheapest home insurance companies on the market.
- Erie offers the cheapest homeowners insurance annual policy premium on our list at $897 for $250,000 in dwelling coverage.
- The average national cost for a home insurance policy with $250,000 in dwelling coverage is $1,312 per year.
- Cincinnati Insurance, Universal and USAA offer some of the cheapest average homeowners insurance rates by state, although USAA is only available to military and qualifying members.
The cheapest home insurance companies
Based on our research, Erie and USAA offer the cheapest average home insurance rates. However, Erie is a regional provider only available in 12 states, and USAA only serves military members. If neither company is an option for you, you might want to get quotes from Progressive, Nationwide or the other carriers on our list. 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 most affordable homeowners insurance options, you may want to start your search by getting quotes from these companies:
|Home insurance company||Average annual premium for $250,000 dwelling coverage||J.D. Power customer satisfaction score||AM Best financial stability rating|
*Not officially ranked by J.D. Power due to eligibility restrictions.
Erie may be a good choice for first-time homebuyers on a strict budget.
Erie offers the cheapest rates of the companies we analyzed, making it a top choice for customers looking for cheap homeowners insurance. The company provides plenty of coverage options, like service line protection and water backup coverage, to help you tailor your coverage to your needs. Over 13,000 local agents across the country can help you get a quote and buy a policy. The company also ranks highly in customer satisfaction, which may give first-time homebuyers both peace of mind and financial breathing room.
Learn more: Erie Insurance review
USAA might be best for active-duty military service members, veterans and their immediate families.
USAA is widely considered one of the best insurance companies for exceptional customer service, but coverage is only available to military members, veterans and immediate family members. If you qualify for coverage, USAA offers some of the best cheap homeowners insurance on the market, with top-notch service, a wide range of coverage options and consistently low premiums.
Learn more: USAA Insurance review
A good choice for comparing rates and saving time.
Progressive is the third-largest insurer by market share and might be appealing if you like handling your insurance needs online or via a mobile app. The company maintains robust online and mobile tools that generate quick and easy quotes that tech-savvy customers may appreciate. However, Progressive’s underwriting company, American Strategic Insurance, receives low customer satisfaction scores.
Learn more: Progressive Insurance review
A good choice for consolidating insurance and banking products.
Nationwide offers diverse coverage options for homes, farms, pets, vehicles, investment products and much more. For homeowners looking to consolidate their insurance and financial products with one company, Nationwide might be a good choice. Nationwide’s average premium is not the cheapest on our list but it is still well below the national average. Additionally, the company offers several discounts that could help you lower your rate.
Learn more: Nationwide Insurance review
A good option for flexible coverage.
Auto-Owners is a regional carrier that sells coverage in 26 states. Its home insurance policies are highly flexible, with coverage options like guaranteed home replacement, equipment breakdown and identity theft coverage. Although Auto-Owners’ average premium isn’t the cheapest of the companies we reviewed, the carrier does offer several discounts, including multi-policy, water shut-off system and mortgage-free.
Learn more: Auto-Owners Insurance review
A good choice for customizable coverage.
Travelers’ average premium is only just below the national average, but the available coverage choices might make up for the average rate. Travelers offers a wide range of coverage options, including options for jewelry and valuable items, identity fraud and green homes. The company also offers several discounts, including savings for bundling policies, having an environmentally-friendly home certification and being loss-free. However, Travelers did receive a below-average customer satisfaction score from J.D. Power.
Learn more: Travelers Insurance review
The cheapest home insurance companies by state
State-specific factors, like the likelihood of natural disasters and the cost of building materials, can affect your home insurance premiums. Through our research, we determined the cheapest home insurance carrier in each state. If you’re looking for cheap coverage, you could start with a quote from these carriers.
|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 isn’t legally mandated, your mortgage lender will probably 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 in a covered incident. But there are things you can do to find the most affordable home insurance policy that fits your needs.
- Evaluate your needs
Before you start shopping for coverage, figure out what matters to you. Are you just looking for cheap home insurance? Do you need access to specialty coverage, digital tools or outstanding customer service? Once you know what you need from a home insurance company, you might be able to narrow down your choices.
- Determine your home’s replacement cost
Although each insurance company will have its own valuation tool, knowing how much home insurance you need before you start shopping could be helpful. 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. There are online tools you can use to determine your home’s rebuilding cost.
- Consider your liability exposure
Most standard home insurance policies come with an average of $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. A higher limit will probably increase your rates a bit, but it provides valuable protection against lawsuits if someone is injured on your property.
- Shop around
Getting insurance quotes from several home insurance providers allows you to compare rates, coverage, discounts and additional features of each company to find high-quality and cheap homeowners insurance. Getting several quotes could help you determine if a company fits your budget and coverage needs.
- 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, so insurance companies charge higher premiums to compensate for this increased risk. Improving or at least maintaining your credit score might help you keep your home premium lower.
- 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, home safety features, loyalty, new homebuyer and claims-free.
The best way to see if you are taking advantage of your company’s discount programs is to talk to an agent. Discount availability varies, and an insurance professional should be able to help you find the discounts you qualify for.
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 claims. Before filing, you might want to get an estimate for the damages. Damages that are not significantly above your deductible might be better handled out of pocket. If you have suffered a significant loss, though, filing a claim could be the best option. You carry homeowners insurance to protect yourself against financial devastation; if repairing moderate or severe damages to your home would be difficult for you financially, homeowners insurance could 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.
Is it cheaper to bundle my insurance policies?
It might be. Bundling discounts, also called multi-policy or multi-line discounts, are often some of the biggest savings opportunities that insurance companies offer. Bundling your policies is easier than you might think — it just means insuring more than one type of policy, usually your home and auto insurance, with the same company. While there might be some scenarios where it makes more sense to have your policies with different companies, you could benefit from getting quotes for bundled policies. You might save money and make your insurance easier to manage, all at once.
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.