Best Homeowners Insurance Companies of 2021

 

Our homes are the most expensive things most of us will ever own, so it stands to reason we should protect them. That's where homeowners insurance comes in. With home insurance, if you ever experience a burglary, fire, hurricane, or some other disaster, you can rest assured that any damage to your home and possessions – along with your garage, backyard fence, and any other outbuildings and structures on your property – will be paid for. You'll also have personal liability coverage if a visitor is injured, plus your extra living expenses will be reimbursed if your home is so damaged that you have to move out.

Similar to how some landlords require you to have renters insurance, your mortgage lender may require you to have homeowners insurance. However, even if you're not required to buy a homeowners insurance policy it's a good idea to do so. A homeowners insurance policy protects you from huge out-of-pocket costs in the event of a disaster. While you may not think damage from a weather-related event would affect you or a thief would target your home, home insurance is one of the best ways to protect your assets from unforeseen incidents. It’s important to note that home insurance is different from a home warranty, which will pay to replace major household systems and appliances that break or wear out.

Below, We list Best Homeowners Insurance Companies of 2021 to help you choose the one that's right for you. We also introduce you to what homeowners insurance provides, how much it costs, how to buy it, and other things a homeowner needs to know to find the most appropriate insurance policy for your needs.

Best Homeowners Insurance Rating

#1 Lemonade
#2 USAA
#3 Amica
#4 Allstate
#4 State Farm
#6 Nationwide
#6 American Family
#8 Erie Insurance
#9 Liberty Mutual
#10 Chubb
#10 Progressive
#10 Farmers Insurance

How to Choose the Best Homeowners Insurance Policy for You

While home insurance may seem complicated and overwhelming, it's actually fairly straightforward to choose the best home insurance company and the right insurance policy for you. First, you’ll need to determine the value of your home and its contents, and then select a company and policy that provides the coverage options you need at a reasonable price.

Take the following steps to purchase homeowners insurance:

1. Decide what you want to insure. A standard homeowners insurance policy may not cover valuable jewelry, artwork, or other collectibles. Likewise, if you have a trampoline, pool, or something else on your property that raises your liability risk because it poses an increased risk of injury or death to others, you may need additional coverage. And if your area is flood-prone, you'll probably need a separate policy for flood insurance from your home insurance company or the National Flood Insurance Program. Similarly, if you live in an earthquake-prone region, you will need additional insurance to cover related damage. Use the U.S. Geological Survey’s fault map to find out how close you live to a fault line and better understand your risk of an earthquake.

2. Determine how much home insurance you need. Take an inventory of all of your personal belongings. If you have receipts, file them away. Use this information to decide how much coverage you need for your property. For your home and other structures on your property, get an estimate from your insurance company or a realtor for the average rebuilding cost in your area per square foot. Determine how much you might spend on a hotel, meals out, and other living expenses if your home was destroyed or became uninhabitable after a loss. The Insurance Information Institute can help walk you through the process, as can a licensed insurance agent or realtor.

3. Choose an insurance company. To choose the right homeowners insurance company, you will want to find an insurer that sells policies with the coverage and other features you need at an affordable price. In addition, look for a company that has a high financial strength rating from AM Best or another rating agency, gets good consumer and professional reviews, and allows you to file a claim or seek assistance 24/7.

4. Choose a policy. The right home insurance policy will provide sufficient coverage, have terms that are easy to understand, and may even offer discounts. Consider purchasing a replacement cost policy that will reimburse you for the cost of replacing your property with new items, rather than a cash value policy that only pays the depreciated value.

Bundling Homeowners and Auto Insurance

Many insurance companies will give you a discount if you buy more than one type of insurance policy from them – for example, home insurance and auto insurance. This is called insurance bundling or a multi-policy discount. Most insurance companies will offer discounts if you bundle two or more policies together compared to paying for each policy individually. This is worth it to the insurance company because it generates more revenue per customer and helps promote customer loyalty.

However, insurance bundling doesn't always save money. In some cases, an insurance company that for example offers only auto insurance may offer lower rates than companies that sell several different types of policies, according to Amy Bach of the consumer advocacy group United Policyholders. Bach says that a company that offers only auto insurance may also offer benefits not available in an insurance bundle from another insurer, such as ticket forgiveness or claims-free discounts.

How to Buy Homeowners Insurance

The first step to buying homeowners insurance is to determine how much insurance coverage you need. To estimate the coverage you need, you should take a home inventory, or an inventory of all of your personal property both inside and outside your home; calculate the cost to rebuild your home after a disaster (ask a real estate agent for building costs in your area); and determine if you need additional coverage for earthquakes, floods, or a high-risk item like a swimming pool. If you have trouble determining how much home insurance you need, the Insurance Information Institute can help walk you through the process, as can a licensed insurance agent or realtor.

Next, decide if you want replacement cost coverage or actual cash value coverage. A replacement cost policy will pay to replace your personal property with new equivalent items, whereas an actual cash value policy factors in depreciation – in other words, what your personal belongings are worth used. For things like electronics that depreciate quickly, an actual cash value policy could leave you well short when it comes to buying new items. In addition, a replacement cost policy will provide enough insurance money to rebuild your home even if building costs rise. As a result, most insurance experts recommend a replacement cost policy, even though premiums are somewhat higher.

Then narrow down your search to several home insurance providers. Once you have chosen a few companies, use the estimate tool on their websites to get an idea of how much it will cost for the coverage you need. It can be helpful to talk to an agent in person or over the phone at this point for additional help. Get quotes from several companies, but be sure to compare policies that offer similar coverages. When you are ready to purchase your homeowners insurance, depending on the company, you can buy a policy through the insurers' website, over the phone, or through an independent or dedicated local insurance agent.

Some home insurance companies may require a home inspection to confirm the condition of your home and ensure you have adequate coverage. If a home inspection is required, the insurance company will send an inspector to your home. Due to COVID-19, many insurance companies have updated their inspection process to follow safety precautions, including wearing PPE and social distancing. Some inspections will not require you to be present and the inspector will focus on the exterior of your home, including the roof, and any potential hazards in your yard that could cause damage to your home in the case of a severe storm. However, some companies are still completing interior inspections focusing on the condition of your home’s electrical systems, ventilation, fireplace, plumbing, heating, and air conditioning systems. When purchasing home insurance, check the requirements of the insurer you are considering to determine their home inspection practices.

How to File a Homeowners Insurance Claim

To file a homeowners insurance claim:

1. File a police report if needed. If there's been a crime, you will need to file a police report promptly and note who you speak with.

2. Notify your insurance company. Your insurer needs to be notified promptly as well, either online or over the phone, depending on company policy. This will facilitate your claim and help ensure that you're compensated promptly.

3. Make any urgent repairs. Make any repairs to your home that are urgent, assuming you can do so safely. Photograph the damage before you start, and keep receipts for any materials you purchase.

4. Document the claim. Document all damage, stolen items, and anything else that will form the basis of the claim. Take lots of photos or a video detailing the damage, going room to room if necessary. If you have security cameras, collect and share all footage with your insurance provider.