Buying a home is an exciting experience, and it’s probably the single biggest investment you’ll make in a lifetime. Homeowners insurance protects that investment. It protects the physical structure of your home, but it also covers your personal items, liability, medical expenses and loss of use.
You might be tempted to choose the cheapest home insurance policy you can find, but it’s not recommended. “Many homeowners assume that if they’ve been a loyal insurance customer, they must be getting the best insurance rate. Since insurers evaluate you differently and even offer different discounts, it’s critical to shop and compare rates,” says insurance expert Laura Adams.
Before you buy a policy, there are other important things to consider, like a company’s financial strength and customer service reviews. But if price is your main concern, you’re in luck—there are ways to lower your premium so it fits within your budget. We found the cheapest home insurance companies that offer comprehensive coverage, financial stability and top-notch customer support.
Using resources such as J.D. Power and the Insurance Information Institute, these are our top picks for the best cheap home insurance companies of 2020.
Our top picks for cheap home insurance companies
|Company||Overall satisfaction: J.D. Power Home Insurance Study||J.D. Power Property Claims Satisfaction Study||AM Best financial rating|
|Amica||5 out of 5||5 out of 5||A+|
|Allstate||3 out of 5||3 out of 5||A+|
|State Farm||4 out of 5||3 out of 5||A++|
|USAA||5 out of 5||5 out of 5||A++|
|Nationwide||2 out of 5||3 out of 5||A+|
Amica offers competitive rates and is one of the highest-rated insurers for customer satisfaction, scoring in the number one place with both J.D. Power and Consumer Reports.
Amica offers a handful of discounts that will bring your premium even lower, including:
- Multi-line discount
- Safety discounts for alarm or monitoring systems
- New/remodeled home credit
Because Amica is member-owned, it pays out an annual dividend to policyholders rather than stockholders. You can choose to receive the dividend as a check or apply it to your premium.
Allstate is one of the most reputable insurance companies, and overall, it gets good customer ratings. Allstate was rated three out of five stars for overall satisfaction and claims satisfaction by J.D. Power. It also has excellent financial strength, with an A+ rating from AM Best.
Allstate offers great coverage, including a few unique options, like HostAdvantage® for Airbnb hosts, flood insurance, identity theft restoration, sports equipment coverage and green improvement reimbursement.
When it comes to discounts, we were impressed at the savings Allstate offers. Some of Allstate’s home insurance discounts include:
- Policy bundling
- Auto pay
- Protective devices
- Early signing bonus
- Retiree discount
- Smoke-free homes
State Farm has more than 19,000 agents across the country, so you should find one near you. As the largest insurer in the U.S., it’s able to offer competitive pricing and policy add-ons that let you customize your coverage.
State Farm has an excellent website with an educational blog and a detailed quote tool that can give you an initial price within minutes. It’s a good idea to follow up with a call to an agent, in case there are additional discounts available to you.
State Farm’s discounts include:
- Multiple line discount
- Home alert (fire, smoke, burglar alarms or monitors) discount
- Roofing discount, for impact-resistant roofing products
USAA features top-of-the-line service and low-end pricing for current and former members of the military and their families. It consistently ranks at the top of J.D. Power surveys, and if you are eligible, it should be your first stop when looking for cheap home insurance.
USAA doesn’t have a ton of discounts, but it still may be the cheapest option. It does have discounts for bundling policies, claims-free and security systems.
Nationwide doesn’t have the greatest reputation for customer service, but its rates are among the lowest. It’s worth getting a quote to see what it can do for you.
Nationwide’s basic policy covers additional elements that many companies don’t, unless as a paid add-on. These include ordinance or law insurance, which helps pay to rebuild your home to current building codes, and credit card coverage, which protects against identity theft.
Nationwide also has a nice handful of discounts, including:
- Protective device (smoke detectors, fire alarms, burglar alarms)
- Home renovation discount
- Roofing discount
- Home purchase (bought in the last 12 months)
- Loyalty to previous company
- Gated community
Home insurance discounts
|Multi-policy||Home safety||Loyalty||Auto pay||Claims-free||New Home|
Frequently asked questions
How can I save on homeowners insurance?
There are many things you can do to save on homeowners insurance. Here are some suggestions from the Insurance Information Institute:
- Shop around and receive quotes from at least three companies.
- Raise your deductible.
- Add safety features such as a home security or fire protection system.
- Maintain a good credit rating.
- Review your policy often for additional discounts.
Bundling your policies is another great way to save money on your insurance. According to Adams, “If you have other insurance policies, such as auto, life, and personal umbrella liability, find out if bundling them with the same insurer could save money. Make sure your insurer knows if you make any significant improvements, such as installing new doors and windows, replacing your roof, upgrading your plumbing or electrical systems, or installing security systems.”
Does homeowners insurance cover me in a flood or earthquake?
Damage caused by floods and earthquakes is not covered by homeowners insurance. However, flood insurance and earthquake insurance is available. If you live in a flood zone or an earthquake-prone area, it may be worth it to add on 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 all covered under your homeowners insurance policy. However, if you are a professional photographer or musician with a lot of expensive equipment, you may want to insure it for its replacement value, especially if you use it to make a living.
What is the average premium for homeowners insurance?
The National Association of Insurance Commissioners (NAIC) reports the average premium for homeowners insurance is $1,192. However, the cost of homeowners insurance varies by state.
Who offers the best homeowners insurance?
We have several top picks for the best homeowners insurance companies, but the best company for you will depend on your needs. Where you live and the kind of coverage you need will help determine the total price of your homeowner insurance policy.