Best cheap homeowners insurance in Chicago
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Home insurance in Chicago can be pricey, with an average cost of $1,570 for $250,000 in dwelling coverage. This is above the national average, which is $1,428 for the same amount of coverage. If you’re looking for cheap home insurance rates, you’ve come to the right place. Bankrate’s insurance editorial team, which includes licensed property and casualty agents with decades of combined experience, took a close look at home insurance in Chicago to find the best carriers.
We reviewed average rates, third-party reviews and more to determine the best cheap homeowners insurance in the Windy City. Based on our analysis, the top companies include USAA, Allstate, Travelers, State Farm and American Family.
Best cheap home insurance companies in Chicago
After reviewing dozens of carriers, the Bankrate insurance editorial team found five that offer some of the best home insurance in Chicago, Illinois. These providers stand out for below-average rates, generous discounts, comprehensive coverage options, good J.D. Power customer satisfaction ratings and strong financial stability.
To help customers quickly evaluate carriers, we assigned each company a Bankrate Score out of 5 points, which takes into account the various rating factors above and others like digital tools and local agent availability.
| Home insurance company | Bankrate Score | Average annual premium for $250K dwelling coverage | J.D. Power score |
|---|---|---|---|
| USAA | 3.7 | $784 | 884/1,000* |
| Allstate | 3.5 | $976 | 815/1,000 |
| Travelers | 3.3 | $969 | 794/1,000 |
| State Farm | 3.2 | $1,125 | 829/1,000 |
| American Family | 3.1 | $1,179 | 842/1,000 |
*USAA does not qualify for official ranking with J.D. Power due to eligibility restrictions
USAA
As one of our 2023 Bankrate Award winners for Best Home Insurance Company Overall, USAA is known for offering exceptional customer service and affordable rates. The catch is that USAA only sells insurance to active duty and retired military personnel, as well as eligible family members. Nearly every policy comes with identity theft coverage, contents replacement cost coverage and military uniform coverage. USAA offers potential discounts for bundling, customer loyalty and safety features.
Learn more: USAA Insurance review
Allstate
Our other 2023 Bankrate Award winner for Best Home Insurance Company Overall, Allstate offers robust coverage options and extensive digital tools for mobile policy management. In addition to standard home insurance coverage types, homeowners may be able to build a more comprehensive policy with endorsements for water backup, business property, musical instruments, sports equipment and electronic data recovery. Allstate’s J.D. Power score for customer satisfaction is slightly below average, but it has a National Association of Insurance Commissioners (NAIC) Complaint Index below the industry baseline, indicating it receives fewer complaints than expected for its home insurance product.
Learn more: Allstate Insurance review
Travelers
If you are looking for cheap home insurance in Chicago, you may want to request a quote from Travelers. The company’s average rate for Chicago residents is far lower than the city average, and the carrier offers a handful of discounts to potentially lower your rate even further. Savings opportunities may include a bundling discount, a loss-free discount and an innovative discount for those who live in LEED-certified green homes. It also has a green home endorsement that would allow you to rebuild with environmentally-safe materials after a covered loss. Travelers has one of the lowest customer satisfaction scores in the J.D. Power study, so potential customers may want to speak with existing policyholders about their customer service experience.
Learn more: Travelers Insurance review
State Farm
State Farm is the largest home insurance company in the country and may be a good choice for shoppers who want a balance of low rates, diverse coverage options and strong customer service. The carrier scored above average in J.D. Power’s customer satisfaction study, which may be in part because of its robust digital tools and local agent availability for in-person service. Policyholders may appreciate the carrier’s Premier Service Program, which may help connect you with reputable contractors after a covered loss. Although State Farm does not have as many home discounts as some competitors, it does offer potential savings for bundling and weather-resistant roofs.
Learn more: State Farm Insurance review
American Family
Although American Family’s average home insurance premium isn’t the cheapest on our list, it is still less than the Chicago average. American Family, also known as AmFam, stands out for excellent customer service with the third-highest customer satisfaction score from J.D. Power in 2022. Endorsement options from the carrier include matching siding protection, hidden water damage coverage and equipment breakdown coverage. In terms of discounts, AmFam offers potential savings for customer loyalty, renovated homes and paid-in-full. Homeowners whose parents carry a home or auto policy with AmFam may be interested in the carrier’s generational discount.
Learn more: American Family Insurance review
Home insurance coverage options in Chicago
Illinois homeowners are not required by law to have homeowners insurance. However, your mortgage lender may require you to purchase a policy to protect their financial stake in your property.
Even if you don’t have a mortgage, most insurance professionals recommend considering homeowners insurance. Without a robust policy, you might have to pay substantial out-of-pocket costs if your home is damaged or destroyed.
Here are some endorsements and additional standalone policies Chicago homeowners might consider:
- Flood insurance: Because Chicago is located on Lake Michigan, many homes in the city may be at risk of flooding. Standard home insurance policies do not include flood coverage, so you may want to consider a standalone policy through a private insurer or the National Flood Insurance Program.
- Scheduled personal property coverage: Homeowners insurance covers valuable items, but the coverage limits tend to be low. If you keep expensive items in your home, like collections, fine art, jewelry or electronics, purchasing scheduled personal property coverage may be a good idea.
- Identity theft coverage: The Insurance Information Institutes (Triple-I) reports that more than 442 million Americans were impacted by identity theft in 2022. Many home insurance companies sell identity theft and fraud coverage, which may pay for identity restoration services, like credit monitoring.
Home insurance discounts in Chicago
Many insurance companies in Chicago offer discounts, which may help you get a lower homeowners insurance premium. If you are looking for affordable home insurance in Chicago, you may want to look for providers that offer multiple discounts that you are eligible for.
Here are some common discounts that may help you get cheap home insurance in Chicago:
- Claims-free discount: Homeowners who have no prior insurance claims on their record within the last several years can usually qualify for a premium discount.
- Multi-policy discount: Multi-policy discounts, which usually involve purchasing a home and auto insurance policy from the same company, can be significant.
- Pay-in-full discount: If your annual premium is paid in one lump sum, many insurance companies will lower your rate.
- Security system discount: Homes with a security system usually have a lower risk of theft, which means you may get discounted homeowners insurance.
- New home discounts: If your home is a new build, you may be eligible for savings on your premium.
- Updated roof discounts: An updated roof is less likely to be the cause of costly claims, so your insurer may reward you with a discount when your roof is replaced or updated.
The amount you can save with discounts varies greatly from insurer to insurer. Many discounts are small— 5 or 10 percent off — but if you are able to qualify for more than one, the savings may add up. Bundling is typically one of the largest potential savings opportunities.
Frequently asked questions
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Every shopper is looking for something different in their homeowners insurance company. Some people are willing to pay a little extra for top-notch customer service. Others may be on a tight budget, so affordability is their number one priority. As such, the best homeowners insurance company will be different for everyone. Before requesting quotes, you may want to make a list of your priorities to use as a guide while you shop.
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According to proprietary data sourced from Quadrant Information Services, the average cost of homeowners insurance in Chicago is $1,570 per year for $250,000 in dwelling coverage. This is above the Illinois state average of $1,410. However, you may pay more or less than average, depending on your rating factors. Insurance is highly individualized, and your claims history, location and home value are just some of the many data points an insurance company may use to calculate your premium.
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As a general rule, most insurance professionals recommend you have enough dwelling insurance to cover your home’s rebuild value and enough personal property insurance to cover the value of your personal items, like clothing, furniture and appliances. Your liability coverage limit may be based on your personal assets, such as your income, savings and retirement accounts. When in doubt, you may find it helpful to consult with a licensed agent to determine if you have sufficient coverage.
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You may, depending on where you live. Since much of the region is close to Lake Michigan, many homes may be at risk of flooding. Homeowners with properties near smaller bodies of water, such as the Des Plaines River, might consider it as well. Inputting your address in FEMA’s Flood Map Service Center website may allow you to see how at-risk your home could be for flooding.
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Bankrate utilizes Quadrant Information Services to analyze 2023 current rates for ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. 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: $150,000, $250,000, $350,000, $450,000, $750,000
- Coverage B, Other Structures: $15,000, $25,000, $35,000, $45,000, $75,000
- Coverage C, Personal Property: $75,000, $125,000, $175,000, $225,000, $375,000
- Coverage D, Loss of Use: $30,000, $50,000, $70,000, $90,000, $150,000
- Coverage E, Liability: $300,000, $300,000, $300,000, $300,000, $500,000
- 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.
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