Best cheap homeowners insurance in Detroit
As the largest city in Michigan, Detroit is home to over 670,031 people, of which 47.2 percent own their homes. Detroit’s population has been on a decline for the last several years, making it one of the fastest shrinking cities in the United States, and along with it, the economy has also witnessed a slump. This is best demonstrated by the median property value in Detroit, which was around $49,000 in 2019, far less than other large cities.
Home insurance in Detroit costs an average of $2,237 per year for dwelling coverage of $250,000, several times more expensive than the national average of $1,312 per year. The geographic location of Michigan makes it susceptible to storms and severe winters, and homeowners insurance could be necessary for coverage. Nearly all major insurance companies are available in this city and our analysis of the top home insurers should make it easy for you to pick the most affordable option.
Best cheap home insurance companies Detroit
Taking your pick in this crowded insurance market is often difficult. Detroit has no shortage of home insurers, but not all of them offer cheap home insurance. To come up with the five best home insurance companies offering cheap home insurance for Detroit residents, Bankrate compared some of the major insurers in the city based on market share, average annual premiums and third-party ratings from J.D. Power. We also compared coverage options, discounts, accessibility, and overall customer service.
|Home insurance company||Average annual premium for $250k dwelling coverage||J.D. Power score|
|AAA||$1,383||825 / 1,000|
|Allstate||$2,951||829 / 1,000|
|Auto-Owners||$326||843 / 1,000|
|State Farm||$1,834||829 / 1,000|
|*USAA||$1,166||*889 / 1,000|
*Due to membership eligibility restrictions, USAA is considered rank-ineligible by J.D. Power.
The American Automobile Association (AAA) sells home insurance through different agencies around the country, but you will need to be a member of an AAA auto club to qualify. This may be an inconvenience for new customers, but those who are already members stand to enjoy coverage for liability, dwelling and personal property coverage for an average of $1,383 a year in Detroit.
Extra coverages include earthquake insurance, valuables, umbrella insurance and additional living expenses. Depending on which auto club you are a member of, you can get discounts for a new home, safety devices, being claims-free, and weather-resistant roof.
Learn more: AAA Insurance review
In Detroit, Allstate home insurance is on the more expensive side at an average of $2,951 per year. But this long-standing company has several additional features on offer, besides the usual dwelling, liability and personal property coverage. Some of those are water backup, identity theft protection, scheduled personal property, sports equipment and musical instruments coverage.
The savings options are also plentiful, including discounts for paying the annual premium in full, bundling multiple policies, buying a new house, being a long-time customer and renovating your house with sustainable materials.
Learn more: Allstate Insurance review
For exceptional customer satisfaction and a variety of coverage options, consider adding Auto-Owners to your own list. Its home insurance policy is the cheapest in Detroit on average, at only $326 a year for $250,000 dwelling coverage. Besides the regular features, Auto-Owners offers add-ons such as guaranteed replacement cost, water and sewer backup, equipment breakdown and appliance insurance.
To maximize savings, you may apply available discounts for bundling insurance policies, paying your annual premium in full and having none or few claims in your insurance history. Auto-Owners has one of the lowest complaint rates in the industry and has consistently fared well in J.D. Power studies.
Learn more: Auto-Owners Insurance review
Although more popular for its auto insurance, State Farm also has decent home insurance policies that cost around $1,834 per year in Detroit. Some coverages include options for accident and weather damage protection, coverage for keepsakes and valuables and insurance for appliances and electronics. Discounts are limited, but customers could save some money with an upgraded roof, safety devices or bundling home and auto insurance. State Farm is widely recognized for its large network of local agents, which make the service more personalized.
Learn more: State Farm Insurance review
If you are part of the military, USAA seems a natural choice for home insurance because of its excellent third-party scores, the competitive rates, and the perks offered to active or retired members of the armed forces. However, due to membership restrictions, USAA does not receive official rankings from J.D. Power. A standard policy averages at $1,166 a year in Detroit and you can add endorsements such as home sharing coverage, earthquake insurance or valuable property coverage to your basic policy. USAA home insurance also has a good number of discounts, including those for home safety devices, policy bundling and being claims-free.
Learn more: USAA Insurance review
Home insurance coverage options in Detroit
Unlike auto insurance, home insurance is not mandated by law and depends largely upon the homeowner’s choice. Keep in mind that you will likely be required to purchase home insurance if you have a mortgage. It may also be worth considering because Detroit is a city that experiences weather perils regularly and owning a home here typically makes insurance indispensable. Although the basic coverage is often enough for most, the following additional options help bring greater peace of mind.
- Flood insurance: Most standard home insurance policies do not include flood insurance, but it can be purchased through the National Flood Insurance Program (NFIP). Consider asking your insurance provider about more information on available flood insurance policies in your region
- Water and sewer backup: Since plumbing damages can be sudden and costly, water and sewer backup is often a recommended coverage for Detroit homeowners. It is usually available from most insurers.
- Loss of use: If your house becomes unlivable because of a covered peril, loss of use coverage helps pay for additional living expenses while your home is being repaired or rebuilt.
All of these coverages may be useful to add to your home insurance policy in Detroit since the city’s climate make it vulnerable to storms, flooding and icy winters that could cause roof damage and burst pipes. Your insurance agent should be able to provide you with details about each optional coverage.
Home insurance discounts in Detroit
Regardless of how much you pay for home insurance, it could be good to save some money on annual premiums. Home insurers in Detroit offer various discounts that may reduce your insurance cost by a few hundred dollars a year, and although certain discounts may differ from one company to another, there are some that are typically available from most providers. These include:
- Policy bundling: There is usually a discount for combining your home insurance policy with auto insurance from the same insurer.
- Safety devices: You could earn a discount for having fire and burglar alarms and sprinklers installed in your house.
- Higher deductible: By increasing your deductible to a comfortable amount that you pay when making a claim before your insurer steps in, you could save money.
- Paid in full: Insurers usually offer a discount for paying your premium in full.
- Claims-free: You might save by having a claimless history for three or more years.
Frequently asked questions
What is the best home insurance company?
Every person’s insurance needs are different and major home insurers are equipped to provide for most requirements. You could review different home insurance companies to analyze some of the highest rated providers in the market today and take your pick based on coverage options, pricing and discounts, third-party ratings and overall customer service.
How much does home insurance cost in Detroit?
For a dwelling coverage of $250,000, home insurance costs an average of $2,237 in Detroit, which is on the steeper side. But the rate can be higher or lower depending upon your exact location, house size and the coverages you choose.
How much home insurance do I need in Detroit?
At the least, your home insurance coverage should be able to pay for repair and rebuilding of your house if damaged in a covered peril. This amount is based on the market value of your property and the cost of rebuilding it. Additional coverage for personal possessions can add to this amount. An insurance agent is usually the best person to help you choose the right coverage within your budget.
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.