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 homeowners insurance policy that provides you with the protection you need may be a priority.
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 home insurance companies of 2021.
- Getting quotes from several companies could help you find a cheaper premium.
- Price is not the only factor to review when shopping for home insurance.
- Discounts can help you significantly lower your premium.
In this article:
- The cheapest home insurance companies
- The cheapest home insurance companies by state
- Finding the cheapest home insurance
The cheapest home insurance companies
Although finding a cheap premium 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.
After analyzing average annual premiums for a $250,000 dwelling, Bankrate’s insurance editorial team also reviewed each company’s J.D. Power customer satisfaction scores and AM Best financial strength ratings. We also looked at available coverage and discounts.
Based on our research, if you are looking for the best cheap home 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.
With the cheapest average premium on our list, Erie may be a good choice for those on a strict budget. Although the average premium is far below the national average, Erie does not cut corners regarding coverage. Adding endorsements like water backup coverage, service line coverage and identity theft coverage will increase your premium but will also help personalize your coverage.
There are also ways to save on your Erie premium, like multi-policy discounts, alarm system discounts and advanced quote discounts. And if you like handling your insurance in person, Erie has over 13,000 agents nationwide.
Learn more: Erie Insurance review
USAA sells insurance to active and retired military members and their immediate families. Because of this, the company is not eligible for official ranking with J.D. Power but consistently receives high scores. If you are eligible, you may have access to low average rates and military-focused coverage options, like uniform coverage.
Although its average premiums are low, you may still be able to save on your USAA premium. You might lower your premium by bundling your home and auto coverage with USAA, having a home security system or being claims-free.
Learn more: USAA Insurance review
Progressive’s home insurance is underwritten by American Strategic Insurance (ASI), but the company maintains its reputation for providing low-cost coverage. If you need to find a policy quickly, Progressive may be able to help. The company offers a tool called HomeQuote Explorer, which lets you compare rates from several companies right from Progressive’s website, which might save you time on your insurance search.
Progressive offers numerous discounts. You may be able to save money if you are a new homebuyer, sign up for paperless statements or have an alarm system. However, Progressive’s home insurance coverage is relatively basic; not many optional coverages are offered.
Learn more: Progressive Insurance review
Nationwide offers numerous coverage options and discounts. You may have the option to add water backup coverage, earthquake coverage and Brand New Belongings coverage, which is designed to pay you the replacement cost for your damaged or stolen personal property.
Nationwide also offers numerous discounts that might help you save money. Savings opportunities include living in a gated community, having prior insurance, updating your roof and being claims-free.
Learn more: Nationwide Insurance review
Although its average premium is the highest on our list, Travelers’ average premium is still below the national average. If you are looking for a wide array of coverage options, Travelers may be a good option. The policies are highly customizable, with endorsements like jewelry and valuable items coverage, water backup coverage and green home coverage.
You may also be able to lower your Travelers’ premium by taking advantage of the company’s discounts. You may save for being a new homebuyer, having a green home, having a home alarm system or bundling your policies.
Learn more: Travelers Insurance review
The cheapest home insurance companies by state
Although some companies are known for offering cheap coverage nationwide, 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 likely require you to maintain a policy. Even if you own your home without a loan, homeowners 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.
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 company, you may be able to narrow down your choices.
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 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.
Consider your liability exposure
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 limit or even an umbrella policy. Although this will likely increase your premium, it could provide valuable protection against lawsuits if someone is injured.
Getting quotes from several 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.
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.
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, 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
How can I save on homeowners insurance?
Insurance companies use several factors when determining your home insurance premiums, which means there are often many ways to save. Shopping around and comparing quotes from multiple providers can be helpful, as can taking advantage of discounts. Your credit can also impact your premium, so maintaining a high credit score may keep your premiums lower. You can also review your deductible and coverage levels and adjust them as necessary. Just be sure to review your changes with a licensed agent before you process them to make sure they align with your financial plan.
Does homeowners insurance cover me in a flood or earthquake?
Damage caused by floods and earthquakes is not typically covered by homeowners insurance. However, flood insurance and earthquake insurance can often be obtained as a separate policy from a private or government provider. If you live in a flood zone or an earthquake-prone area, you may want to consider adding this coverage to protect yourself in the future.
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.
What is the average premium for homeowners insurance?
The average cost of homeowners insurance is $1,312 annually. However, the cost of homeowners insurance varies by state and largely depends on your personal rating factors, like age, marital status, the age of your home, your property’s rebuilding cost and the levels of coverage that you choose to purchase.
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.