Best homeowners insurance companies of April 2024 (2024)

If you’re a homeowner, your house is probably your biggest asset, and you want to protect your investment against the unexpected. That’s where homeowners insurance kicks in.
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With a sea of insurers in the market, finding the right one for you can feel overwhelming. So, we’ve researched the best homeowners insurance companies based on affordability, quality policyholder service and coverage options to help you make your decision.

Why do you need homeowners insurance?

• Avoid financial strain: If your primary home, detached structures or personal belongings sustain damages from a covered loss, homeowners insurance can help reduce your likelihood of withdrawing funds from a retirement account or taking out a loan to rebuild or replace your property.
• Decrease your liability: Your liability coverage can pay for damages or injuries you, your family members or your pet cause to third parties on or off your property.
• Meet financing requirements: Your mortgage company will likely require you to purchase homeowners insurance as part of your loan agreement.

How does homeowners insurance work?

Homeowners insurance helps provide financial protection when you experience a loss to your home or personal property or cause a loss to a third party (such as breaking your neighbor’s window or a guest slipping on your sidewalk). When a covered incident occurs, you file a claim with your insurer.

A standard homeowners insurance policy typically offers the following coverages:

• Dwelling coverage: This coverage pays to repair, replace or rebuild the structure of your home — such as its foundation, roof and walls — when it’s damaged in a covered loss.
• Other structures coverage: This coverage protects separate structures on your property, like fences or detached garages.
• Personal property coverage: This insurance covers your personal belongings like furniture, clothing or electronics. For high-value items like jewelry and antiques, you may need to purchase additional or separate coverage.
• Loss of use coverage: If you have to repair or rebuild your home after a covered loss, your insurer will reimburse you for additional costs associated with being away from home, like eating out or staying at a hotel. This is also called additional living expense (ALE) coverage.
• Personal liability coverage: If you, a family member or your pet unintentionally cause bodily injury or property damage to a third party, this coverage can help pay for legal fees, the cost of repairs or medical care and any other expenses you’re held legally responsible for. Personal liability insurance can protect you anywhere in the world.
• Medical payments coverage: This coverage pays for your guest’s medical expenses if they get injured on your property. It may help avoid a full liability claim.

Actual cash value (ACV) vs. replacement cost coverage

The amount you’ll receive to repair, rebuild or replace your property will vary by coverage level. Actual cash value (ACV) coverage covers the costs minus depreciation. Replacement cost coverage pays for rebuilding or repairing damaged property without deducting depreciation — up to the policy’s limits. Your dwelling and personal property will each have its own settlement option.

Extended replacement cost vs. guaranteed replacement cost

Extended and guaranteed replacement cost coverages can extend your dwelling coverage beyond the limits of your policy to help complete necessary repairs or construction when the initial coverage amount is insufficient.

Extended replacement cost coverage typically provides 20% to 25% more than your coverage limit in the event of a covered loss. For example, if your policy has a dwelling coverage of $250,000 and a 20% extended replacement cost endorsem*nt, you will have an additional $50,000 (for a total of $300,000) if a covered claim exceeds your initial $250,000 of coverage.

On the other hand, guaranteed replacement cost covers the entire amount needed to rebuild your home, even if it’s over your policy limit. So following the same example as above, if you have guaranteed replacement cost and it will cost $320,000 to completely rebuild your home after a covered loss, your insurer will cover the extra expenses, even though your policy’s dwelling coverage limit is $250,000.

With guaranteed replacement cost, your policy may have specific requirements to qualify for coverage, such as reporting improvements or renovations over a specific amount within a certain time frame to ensure your initial dwelling coverage limit is as accurate as possible.

How much homeowners insurance do I need?

The dwelling coverage under your homeowners insurance policy is based on how much it would cost to rebuild your home if it were completely destroyed in a loss —not its market value, which also takes factors like location and neighboring home values into consideration. Therefore, determining appropriate coverage limits can be tricky, especially with persisting inflation, growing rates of natural disasters and fluctuating costs for construction materials and labor.

Over the past year, the average cost across the US to reconstruct a home after a fire increased by 6.4% — with average labor costs for electricians, plumbers and HVAC installers further increasing by 8.6% —according to research from property data analyst CoreLogic. Homeowners insurance fire claims involving full damage to a home’s structure are generally $100,000 or more.

CoreLogic also found that repair costs for wind and/or hail damage, which includes replacing the roof and siding, grew by 14.4%; the price for new cabinetry and drywall rose 15.8% and 8.2%, respectively; and the rates for general laborers and painters averaged 10.1% and 8.7% higher, respectively, compared to last year.

So how do you know how much homeowners insurance is appropriate for your family? It may be beneficial to work with an insurance agent since they often have access to tools and resources to help estimate your home’s replacement cost, but these questions can help guide you as you consider each type of homeowners coverage. Keep in mind that you’ll need to carry replacement cost coverage for your home and personal property if you don’t want depreciation factored into your claim settlement. And, you may want to review your coverage annually to make sure it’s still sufficient.

Dwelling and other structures coverage

• How much are current construction costs in your area?
• What’s your home’s square footage?
• How old is your home (i.e., is it up to code? Are there original features or materials you want to preserve)?
• What’s the style of your home (e.g., ranch, split-level, cape cod, Victorian, etc.)?
• What’s the exterior construction of your home (e.g., frame, veneer or masonry)?
• What type of roof is on your home?
• Is your basem*nt finished?
• Are there any structures attached to your home (e.g., garage, deck, porch, etc.)?
• How many bathrooms does your home have?
• Does your home have any custom or special features (e.g., stained glass windows, fireplaces, top-of-the-line kitchen cabinets, etc.)?
• Have you made any renovations to your home?

Most of these questions can also apply to other structures on your property, such as detached garages, fences, sheds or pole barns.

Personal property coverage

• How much would it cost to replace your items if they were completely destroyed in a loss? Creating and maintaining a home inventory can help with this.
• Do you have any expensive items that may require specific coverage (e.g., jewelry, artwork, firearms, furs, etc.)?
• Do you keep any items off premises like in a storage unit?
• If you have boats or recreational vehicles, can you insure them on your homeowners policy?

In general, your personal property coverage limit will be a set percentage of your dwelling coverage limit, such as 50% or 70%, but you can always purchase more coverage.

Loss of use coverage

• If you can’t live in your home after a fire or other covered loss, how much could you afford to pay for a hotel?
• How much could you afford to pay to eat at restaurants?

Similar to personal property coverage, loss of use coverage (or additional living expense coverage) is usually a set amount of your dwelling coverage, generally ranging from 10% to 30%. Also, it only covers expenses above what you typically pay for — it wouldn’t reimburse you for your weekly groceries, for example.

Personal liability coverage

• What’s your net worth?
• How many assets, investments and financial accounts do you have?
• Do you have a dog or children?
• Do you have a pool, hot tub, trampoline or other outdoor equipment that could cause damage or injury?

Depending on your needs, you may want to consider adding an umbrella insurance policy to provide greater liability protection over your homeowners insurance, car insurance and other insurance policies.

Is homeowners insurance required?

No state legally requires you to purchase homeowners insurance, but most mortgage lenders do. If you’re financing your home, your mortgage company may require insurance to protect its investment from unexpected losses. Your lender may also mandate flood or earthquake insurance if you live in a high-risk flood or earthquake zone.

Even if you don’t have a mortgage, homeowners insurance may still be worth the cost. Natural disasters, theft and other unanticipated risks can result in thousands of dollars in repairs, replacements and even lawsuits. Homeowners insurance helps offset those costs, greatly reducing what you’d pay out of pocket.

Types of homeowners insurance policies

There are different types of homeowners policies that cover different types of losses. For standard single-family homes, there are two common policy forms: HO-3s and HO-5s.

For your dwelling, HO-3 policies generally cover all risks not specifically excluded in your policy at replacement cost. On the other hand, your personal property will only be insured against perils that are explicitly listed in your policy —and at actual cash value, unless you carry personal property replacement cost. An HO-3 is the standard homeowners policy type.

HO-5 insurance offers more comprehensive coverage: Both your dwelling and personal property are insured against all perils except for those that are specifically excluded. Replacement cost coverage is typically included as well for both types of losses. This type of policy is often used to cover homes and personal property with high values.

What does homeowners insurance cover?

Most homeowners insurance policies are written on an HO-3 form, meaning you’ll receive dwelling coverage on an open peril basis. Unless a loss is specifically excluded in the policy, you will likely have coverage for it.

However, HO-3s offer personal property coverage on a named peril basis, meaning you’ll only receive compensation for damages resulting from perils listed in the policy. There are typically 16 perils covered by an HO-3, according to the Insurance Information Institute:

• Fire or lightning
• Windstorm or hail
• Explosion
• Riot or civil commotion
• Damage caused by aircraft
• Damage caused by vehicles
• Smoke
• Vandalism or malicious mischief
• Theft
• Volcanic eruption
• Falling object
• Weight of ice, snow or sleet
• Accidental discharge or overflow of water or steam from an appliance or qualifying system, such as air conditioning, plumbing or heating
• Sudden and accidental tearing apart, cracking, burning or bulging from a qualifying system, such as hot water heating or air conditioning
• Freezing of a heating, air conditioning or plumbing system or of a qualifying sprinkler system or appliance
• Sudden and accidental damage from an electrical current that is artificially generated

What isn’t covered by homeowners insurance?

Homeowners insurance typically excludes coverage for damages caused by floods or earthquakes, so you must purchase separate coverage for these types of losses. It also doesn’t cover damages caused by wear and tear or poor maintenance.

The cost of homeowners insurance by state

Your home’s age and location, your policy’s coverage limits, your claims history and other factors will determine your homeowners insurance premium.

How to choose the best homeowners insurance

Finding the best homeowners insurance for you will help ensure you’re sufficiently covered against losses, all while protecting your monthly budget. You can start by evaluating your needs. Consider the following:

• How much will it cost to rebuild your home?
• How much will it cost to replace your personal property?
• Do you have expensive personal property you want to protect?
• What assets do you want to protect in the event of a lawsuit?
• What types of coverage do you need? Do you need any add-ons?
• Do you have other insurance needs you can bundle together?
• Can you afford a higher deductible in exchange for a lower premium?

If you have a trusted insurance agent or other financial professional, they can help you calculate appropriate coverage limits and explore the various types of homeowners insurance coverage available.

Once you have an idea of what you’re looking for, gather and compare home insurance quotes. You can get online quotes from several different companies, or you can work with an independent insurance agent or broker that can provide multiple quotes for your review at once. Check with family and friends to see if they have any suggestions on whom to work with based on their experiences. When comparing the results, make sure you’re looking at the coverage limits, deductibles and additional options included to get an accurate feel for pricing versus the coverage provided.

After narrowing down your choices, check the insurance company’s reputation by looking at its financial stability ratings from credit agencies like AM Best, complaint history with the National Association of Insurance Commissioners (NAIC) and customer satisfaction ratings from J.D. Power.

Bundling homeowners and auto insurance

One of the best ways to save money on your insurance policies is to bundle your homeowners and auto insurance together. Most insurers offer a multi-policy discount for purchasing two or more policies, which can significantly reduce your premiums in some cases. The discount can range from 7% to 25%, according to our study of the best auto and home insurance bundles.

Additionally, choosing one insurer can help you manage your insurance more easily. You’ll only have one company or agent to contact when you have a claim, billing issue or questions about your account. And if you prefer managing your policies online, you’ll only need to keep track of one online account or download one mobile app.

How can I pay less for homeowners insurance?

Besides bundling, there are other ways you can save on your homeowners insurance. This includes:

• Reviewing your coverages annually: While you may find that you need more dwelling coverage to keep up with rising construction costs, you may also find that you no longer need an add-on you’re paying extra for.
• Comparing multiple homeowners insurance quotes: The Insurance Information Institute recommends starting with quotes from a minimum of three insurers. Make sure you’re carefully reviewing the coverage limits, deductibles, add-ons and conditions to understand pricing and eligibility requirements.
• Increasing your deductible: Increasing your deductible can generally help you save on your premiums. This is because you’re responsible for a greater amount of a claim before your coverage takes over. However, if you have a mortgage, your lender may put a limit on how high your deductible can be.
• Looking for additional discounts: Contact your agent or company directly to see if you qualify for any additional discounts, especially if you’ve recently installed new security devices, installed an automatic generator or made disaster-resistant renovations. Also ask if there’s a loyalty discount if you’ve been with the same insurer for multiple years.

Methodology

To find the best homeowners insurance companies, we started by examining 174 leading insurers and then narrowed it down to the top-rated 14 companies.

For each insurer, we analyzed eight crucial categories, leveraging rate data from Quadrant Information Services, complaint data from the National Association of Insurance Commissioners (NAIC) and study data from customer-research firm J.D. Power.

To identify the winning companies, we worked with more than 200 data points across the 14 companies and eight categories. The following sections describe the category we scored and the weight we gave that category in our scoring model.

Average annual rate (30%)

For the average annual rates, we used data from Quadrant Information Services. With access to insurance rates across the country, Quadrant provided us average homeowners insurance costs for various dwelling coverage amounts: $200,000, $350,000, $500,000 and $750,000. We then calculated the total average for each insurance company.

Rate difference between deductibles (19%)

In general, choosing a higher deductible helps lower your premiums. Using the rate data provided by Quadrant Information Services, we calculated the rate difference between a homeowners policy with a $500 deductible and one with a $2,000 deductible.

State availability (15%)

Not all insurance companies operate in all states — and we are seeing this increasingly become an issue for homeowners as severe weather and natural disasters affect state availability. Some policyholders prefer working with national insurers, while others prefer working with ones that only work in their regions. Having access to adequate coverage is an important first step when analyzing insurance companies. For this category, we researched how many states each insurer operates in. Companies that offered policies in 15 states or fewer or have specific membership requirements received a scoring penalty.

AM Best (10%)

AM Best is a well-respected independent credit rating agency that evaluates insurance companies’ financial strength. By analyzing insurers’ balance sheets, risk management, operating performance and other factors, AM Best assigns a financial strength rating (FSR) based on the insurers’ abilities to pay out on claims and cover other obligations.

J.D. Power scores (10%)

We looked at the 2022 U.S. Home Insurance Study for overall customer satisfaction. J.D. Power scores homeowners insurance providers based on five factors that are a key part of the policyholder experience: interaction, policy offerings, price, billing process and policy information and claims. We included J.D. Power’s ratings in our scoring because they help you gauge what an insurer’s typical policyholder experience is like.

Extended replacement cost (5.5%)

With high rates of inflation and increases in construction costs, having an appropriate dwelling coverage amount is more important than ever. Offering extended replacement cost coverage can help policyholders protect their homes in the event of a total loss. For this category, we looked to see if this coverage is available with each insurer.

Guaranteed replacement cost (5.5%)

With high rates of inflation and increases in construction costs, having an appropriate dwelling coverage amount is more important than ever. Offering guaranteed replacement cost coverage can help policyholders protect their homes in the event of a total loss. For this category, we looked to see if this coverage is available with each insurer.

NAIC 3-year average complaint index (5%)

The National Association of Insurance Commissioners (NAIC) calculates an index for insurance companies based on the company’s share of premiums and complaints filed with the NAIC. An index of 1.00 indicates the insurer received the expected number of complaints for a company of its size. An index below 1.00 means the company received fewer complaints than expected for a company of its size, and vice versa. We took the average index for each company from the past three years.

What didn’t make the cut

Of the 14 homeowners insurance companies we analyzed for our final rankings, five did not win a category: Westfield, Country Financial, Farmers, Shelter and Travelers. Farmers’ overall score met our criteria for selection, but it didn’t make our final list because it didn’t stand out in any area we studied.

All five companies had superior or excellent financial strength, but each received low scores elsewhere, including in rate difference between deductibles, J.D. Power scores and state availability. For example, Country Financial, Farmers, Shelter and Travelers all had above-average rates, which made up 30% of our scoring model.

Frequently asked questions (FAQs)