Cheapest homeowners insurance companies for 2021

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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.

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.

 

In this article:

Key takeaways
  • 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.

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.

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.

Erie

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 home insurance 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

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 homeowners insurance. 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

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 home insurance 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

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

Travelers

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
Alabama Cincinnati Insurance $740
Alaska USAA $692
Arizona USAA $610
Arkansas Travelers $1,511
California Armed Forces Insurance Exchange $507
Colorado State Auto $589
Connecticut NBIC Holdings Group $502
Delaware Cumberland Group $456
Florida Security First $325
Georgia Progressive $692
Hawaii Universal $252
Idaho Grange $564
Illinois USAA $843
Indiana Buckeye Insurance Group $467
Iowa West Bend $676
Kansas USAA $1,378
Kentucky Cincinnati Insurance $965
Louisiana United Insurance Holdings Group $597
Maine Vermont Mutual $455
Maryland Brethren Mutual $554
Massachusetts Quincy Mutual $731
Michigan Auto-Owners $204
Minnesota Auto-Owners $982
Mississippi Nationwide $659
Missouri USAA $1,190
Montana Chubb $959
Nebraska Nationwide $1,699
Nevada Universal $456
New Hampshire Main Street America Group $398
New Jersey NJM $355
New Mexico Allstate $1,456
New York NYCM $394
North Carolina Universal $785
North Dakota Farmers Union Mutual $1,070
Ohio Buckeye Insurance Group $371
Oklahoma Farmers $1,844
Oregon Mutual of Enumclaw $317
Pennsylvania Westfield $283
Rhode Island NBIC Holdings Group $551
South Carolina USAA $401
South Dakota North Star Mutual $1,345
Tennessee Erie $910
Texas Bankers Insurance Group $563
Utah Mutual of Enumclaw $446
Vermont Vermont Mutual $399
Virginia Cincinnati Insurance $443
Washington PEMCO $325
Washington, D.C. Chubb $769
West Virginia Westfield $618
Wisconsin West Bend $512
Wyoming USAA $380

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

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

Does homeowners insurance cover me in a flood or earthquake?

Damage caused by floods is not covered by standard homeowners insurance and will require a separate private or government-backed policy. Most companies offer an endorsement or rider for earthquake coverage. If you live in a flood zone, you may be required by your mortgage lender to purchase the appropriate flood coverage. If you are in an earthquake-prone area, earthquake coverage is often recommended by insurance experts.

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 home insurance varies by state and largely depends on your personal rating factors, like age, marital status, the age of your home, your property’s rebuild cost and the deductible that you choose to purchase.

Methodology

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.