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Homeowners usually need insurance to protect their financial interests since a home is usually one of the largest purchases people make. In Philadelphia, Pennsylvania, the average annual cost of home insurance is $1,132 for $250K in dwelling coverage. However, homeowners looking to save may want the best quality and affordability with their insurers.
Bankrate’s research found the best cheap home insurance options include Allstate, USAA, Penn National, Erie and Farmers. To determine which may be the best cheap homeowners companies, Bankrate evaluated several attributes, such as price, discount offerings, coverage options and third-party customer satisfaction scores and financial strength ratings. While rates may be a top priority for many, the cheapest insurer may not always be the best. In this case, we found the best cheap home insurance companies in Pennsylvania that may help you find well-rounded coverage at a price that suits your budget.
Best cheap home insurance companies in Philadelphia
Based on the carriers we reviewed, the three cheapest home insurance companies in Philadelphia include Allstate, USAA and Penn National. These companies can be compared based on Bankrate Scores, which provide a score on a five-point scale. The score reflects the company’s performance for aspects like rate affordability based on premium data provided by Quadrant Information Service, digital policy management options, coverage types offered and third-party agency ratings for financial strength and customer satisfaction.
|Home insurance company||Bankrate Score||Average annual premium for $250K dwelling coverage||J.D. Power score|
*Not officially ranked with J.D. Power due to eligibility restrictions
Based on our review of average annual rates among top insurers by market share in Philadelphia, the best cheap home insurer is Allstate, with an average premium of just $691 per year for $250K in dwelling coverage. Allstate has a few discounts you may be able to use to further lower rates, like the welcome and loyalty discounts, new homebuyer or new construction home, having active safety devices installed in your home and automatic payments. However, Allstate received a 3.8 Bankrate Score and ranks just below the industry average in the 2022 J.D. Power Property Claims Satisfaction Study.
Learn more: Allstate Insurance review
USAA’s homeowners insurance is value-packed for current and former members of the military and their immediate family members. In addition to rates landing it in the top five of cheap home insurance companies in Philadelphia, replacement cost coverage comes standard. If your home or its contents are damaged or destroyed, you can rebuild or replace items at the current market cost, without depreciation. The main drawback is the limited availability to the public. Direct military affiliation is a prerequisite to obtaining coverage.
Learn more: USAA Insurance review
Penn National is sold through independent agents in several states. To save more on your home insurance policy, consider taking advantage of Penn National’s unique discounts such as smoker-free household, retired daytime occupancy and smart home protective devices, including doorbell cameras, Wi-Fi sensors and water sensors. As a regional insurer, Penn National did not rank in the 2022 J.D. Power customer satisfaction study, and the carrier earned a 3.8 Bankrate Score.
Erie Insurance receives high ratings in the J.D. Power customer satisfaction study. Among our best cheap Philadelphia home insurance companies eligible for an official rank from J.D. Power, Erie comes in second to Farmers for customer satisfaction. The carrier provides low-cost insurance, which may be ideal for first-time homebuyers, with plenty of options to customize coverage. Service line, water backup and sump overflow coverage can be added for comprehensive home protection. Although Erie earned a high 4.6 Bankrate Score, it is the second-most expensive home insurer on this Philadelphia list. That said, its rates are still lower than the average for Philadelphia.
Learn more: Erie Insurance review
Although Farmers has the most expensive home insurance rates among companies on our list, it ranks highest among eligible insurers in the 2022 J.D. Power property claims satisfaction study. Homeowners can choose from customizable coverage packages through Farmers, which offers Standard, Enhanced and Premier options. Farmers also offers claims-free discounts and claim forgiveness. Its 3.8 Bankrate Score is not the strongest among insurers in this review.
Learn more: Farmers Insurance review
Home insurance coverage options in Philadelphia
Like any other state, homeowners insurance is not mandatory in Pennsylvania. However, coverage is typically considered well-worth the cost to financially protect yourself in the event of a catastrophic loss. If you have a home loan, your lender will generally require you to have coverage, although some coverage options may be up to your discretion. An HO-3 policy is the most common home insurance policy and generally includes coverage against various perils that affect Philadelphia residents, such as snow, wind and ice. Other coverage types that may be worth considering include:
- Jewelry endorsement: Homeowners insurance provides limited coverage for high-value items such as fine jewelry, watches and collectibles. Most Philadelphia insurers will provide the option to include specific coverage for these items under a scheduled personal property endorsement, which will ensure you get reimbursed the actual value, should you become a victim of theft or burglary.
- Flood insurance: Experts predict flooding will become more common in Philadelphia. Flood insurance will help to expand your homeowners coverage to protect you from devastating water damage. This particular type of insurance is sold as a separate policy since flood insurance is excluded from standard homeowners insurance coverage.
- Guaranteed replacement cost: Some home insurance policies only come with actual cash value, which means you are reimbursed for the depreciated value of damage to your home’s structure. With guaranteed replacement cost coverage, your policy will cover rebuilding your home at replacement cost.
Home insurance discounts in Philadelphia
Once you select a Philadelphia, Pennsylvania, home insurance company, there are a few ways to save on your home insurance. Nearly all carriers provide discounts to policyholders, which can help you save on your premium if you qualify:
- No claims history: Many homeowners have never experienced home-related damages or losses. You may be able to earn a discount with some insurers for having a history of no claims.
- Home security: Installing a professional or smart home security system can reduce the chances of burglary and loss. Some insurers may reward you with a discount for finding ways of reducing your risk of theft.
- Bundling: Buying homeowners and car insurance from the same insurance company may mean you earn discounts for both policies, which can be substantial.
- Home upgrades: New homes may qualify for discounts based on age, but an older home may also receive a discount if you upgrade systems such as the furnace, plumbing or electrical.
Frequently asked questions
The best home insurance company may be different for everyone. To find your best home insurance company, you should evaluate what is most important to you and find a company that aligns with those criteria, whether its price, coverage types, financial strength or customer satisfaction.
The average cost of home insurance in Philadelphia is $1,132 per year, for $250K in dwelling coverage. This is cheaper than the national average cost of home insurance at $1,383 for the same coverage. However, the average for Pennsylvania overall is cheaper than Philadelphia, at $786 per year for the same dwelling coverage amount.
To calculate how much home insurance you might need, insurance experts may suggest researching the cost of rebuilding in your area and multiplying it by your square footage for a rough estimate. While this may give you a ballpark idea, speaking with a licensed agent is the best way to get an accurate estimate of coverage limits that will provide the best financial protection for you.
Bankrate utilizes Quadrant Information Services to analyze 2022 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.
Bankrate Scores primarily reflect a weighted rank of industry-standard ratings for financial strength and customer experience in addition to analysis of quoted annual premiums from Quadrant Information Services, spanning all 50 states and Washington, D.C. We know it is important for homeowners to be confident their financial protection covers the likeliest risks, is priced competitively and is provided by a financially-sound company with a history of positive customer support.
To determine how well the best home insurance companies satisfy these priorities, third-party agency ratings from J.D. Power, AM Best, S&P, NAIC, and Moody’s had the most impact on the companies’ Bankrate Scores. As price is a common consideration for homeowners, we analyzed quoted premiums based on 40-year-old male and female homeowners with a home policy with $250,000 in dwelling coverage. This profile, assessed across nearly 35,000 ZIP codes in the U.S., provided a basis on which homeowners may compare each provider.
While coverage options, insurer availability, affordability and customer experience are often the top priorities, Bankrate also analyzed each insurer’s online and mobile resources for policy management and claims handling. Insurance is rapidly evolving to keep pace with our digital world, so these aspects also carried weight in determining Bankrate Scores.