Home insurance saves the day when bad luck strikes: A tornado tears off the roof. A fire destroys the kitchen. A visitor slips and falls and then sues you.

Any number of catastrophes can hit home and turn life upside-down. Home insurance helps you pick up the pieces, turn things right side up again and sleep easy, knowing your biggest investment is safe.

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Home insurance covers the house structure as well as your personal belongings. It also provides liability protection in case someone sues you, and money to cover additional living expenses if you have to live somewhere else while your home is undergoing repair after a covered loss.

Best home insurance companies for 2021

Insure.com surveyed more than 300 customers to find out what they thought of their provider’s customer service, claims handling, and offerings to rank the best homeowners insurance companies. Additionally, our team of experts, with more than 35 years of combined industry experience, also identified who has the best home insurance for various homeowner profiles and those looking for specific customer service features. Here are the top home insurance companies:

Compare best home insurance quotes side by side

You can compare homeowners insurance quotes for a policy with $300,000 in dwelling and liability insurance with a $1,000 deductible in the table below. The rate is an average field for nearly every ZIP code in the country. Additionally, you can compare homeowners insurance companies on how well they scored on customer service, their market share, their financial strength rating, and the number of complaints filed with regulators.

Here you can compare the best homeowners insurance companies side by side:

CompanyBest forMarket shareInsureScore (out of 5)J.D. Power Customer Satisfaction (out of 1,000)Complaint ratio (under 1 is best)A.M. Best ratingAverage rate
State FarmOverall17.84% (largest)48290.87A++$1,157
American FamilyCustomer satisfaction4.02% (7th largest)48210.28A$2,485
Liberty Mutual-6.33% (4th largest)48050.61A$2,209
AllstateSpecialty coverages8.84% (second largest)48290.6A++$1,156
AIG-1% (15th largest)48090.1AN/A
Safeco-N/A48020.44A$1,504
Erie-1.64% (12th largest)48390.24A+$1,590
Auto-Owners-1.66% (11th largest)48430.19A++$1,552
TravelersPrice4.4% (6th largest)48030.35A++$1,064
NationwideHome/auto bundle3.03% (8th largest)48080.33A+$1,768
Progressive-1.72% (1oth largest)3.57970.76A+N/A
FarmersDiscounts5.48% (5th largest)3.58140.26A$1,767
Hartford-0.84% (19th largest)3.58321.02A+$1,475
ChubbHigh-value home coverages2.82% (9th largest)37780.17A++$1,357
USAAMilitary6.66% (3rd largest)4.58890.23A++$2,091

 

Sources:

Home insurance basics

Home insurance protects your house, your belongings and shields you from financial disaster if you’re sued because someone is injured on your property. Here we’ll explain in detail how homeowners insurance works.

What is home insurance?

Home insurance is a contract between you and your home insurance company that outlines how much money you get to repair or replace your home and belongings when damaged under certain conditions. It also pays for the medical bills of those injured in your home and for legal expenses if you are sued by an injured guest and you’re legally responsible for the incidents. In some cases, it covers you if you damage others’ property or injures someone else.

What does home insurance cover?

Home insurance is comprised of several types of coverages that work together to protect you, your home and your belongings.

Here is the overview of what does home insurance cover with coverage limits for each:

Coverage typeWhat it doesCoverage exampleTypical amount
DwellingCovers damage to your homeDamages caused by fire, smoke, storms, lightning, hail, vandalism.Enough to pay to rebuild your home
Other structuresCovers stand-alone structures on your propertyDamage caused to the fence, detached garage, etc.10% of dwelling coverage
Personal propertyPays to repair or replace belongings that are stolen or damaged in a covered eventClothing, furniture, electronics and appliances.50% to 70% of dwelling coverage
Additional living expenses (ALE)Help pay temporary living expenses while your home is being repairedHotel and restaurant bills and other living expenses.20% of dwelling coverage
LiabilityPays if you injure someone or cause property damage, and for legal expenses, if you're suedProperty damage and bodily injuries to another person, Legal costs.$100,000 to $500,000
Medical paymentsPays for medical bills of those injured on your property, regardless of faultReimbursement of Medical bills of guests.$1,000 to $5,000

Read more about what does home insurance cover

What is not covered by home insurance?

Flood and earthquake damage are not covered by homeowners insurance. You have to get a separate policy.

Floods

Your homeowners insurance coverage applies to water damage that occurs from burst pipes or severe rain, but it doesn’t cover damage if your house is flooded by water that comes in from the ground. For that, you need flood insurance.

How to get flood insurance: The National Flood Insurance Program (NFIP) sells flood insurance under the oversight and management of the Federal Emergency Management Agency (FEMA). Though these policies are administered by the NFIP, you would still buy one from a standard home insurance company. The NFIP website allows you to enter your state to get a list of providers in your area.

You can also buy flood insurance from a private company. Private flood insurance policies cost more but offer more protection.

Earthquakes

You also need a separate policy to cover your home from damage caused by earthquakes.

How to get earthquake insurance: You can buy earthquake coverage from most major carriers as either a separate policy or as an add-on to your standard home policy. In California, it is available from the California Earthquake Authority (CEA).

Other things homeowners insurance does not cover

There are other types of damage that aren’t covered by your homeowners insurance. These include damage from:

  • Mold
  • Termites
  • Rodents
  • Normal wear and tear or negligence
  • Sewer backups

Additionally, some insurance companies don’t pay for injuries caused by certain breeds of dogs.

There is also a limit to how much a standard policy will payout for damaged or stolen belongings. That means you should get add-on coverage to boost protection if you have valuable possessions, such as jewelry or collectible art.

Read more about home insurance exclusions

Types of home insurance

There are several different types of home insurance policies. Some offer more coverage than others, and some are for various types of structures, for instance, mobile homes, condos or historic houses. The type of home insurance that’s best for you will depend on how much coverage you want and what type of house you own. The exact terms and numbers below may vary from one insurance company to another, but in general, the coverage will be similar.

  • H0-1: Bare-bones policy that is rarely offered that covers just the house and attached structures, like garages.
  • H0-2: Sometimes called a broad form policy, this covers more instances of damage than an H0-1 and also covers personal belongings.
  • HO-3: The most common type of policy that includes coverage for your home, your personal possessions, garages and sheds, liability insurance and additional living expenses.
  • H0-4: Coverage for renters.
  • H0-5: The most comprehensive home insurance policy with coverages beyond an H0-3.
  • HO-6: Coverage for condo owners.
  • HO-7: Coverage for mobile homes and manufactured homes.
  • HO-8: Coverage designed for homes in which the replacement cost exceeds the actual cash value and is commonly used for historic and older houses.

Get an estimate of home insurance cost

Insure.com’s analysis of rates from top insurers for nearly every ZIP code in the country found the average cost of homeowners insurance to be $2,285 a year, or $190 per month. That’s for a home insurance policy with $300,000 in dwelling coverage and $100,000 in liability insurance. If you bump up liability to $300,000, the national average cost is $2,305.

Average home insurance rates by coverage levels:

 

Average annual rateDwelling / Liability Coverage
$1,806$200,000/$100,000
$1,824$200,000/$300,000
$2,285$300,000/$100,000
$2,305$300,000/$300,000
$2,694$400,000/$100,000
$2,709$400,000/$300,000
$3,046$500,000/$100,000
$3,056$500,000/$300,000
$3,304$600,000/$100,000
$3,323$600,000/$300,000

How much is home insurance in your state

Home insurance rates can vary depending on where you live. Select your state from the below list to get an estimate of home insurance cost and how does home insurance work in your location.

States with the most expensive rates for home insurance

Oklahoma, Kansas, Arkansas, Florida and Texas top the list for states where homeowners pay the most for insurance. These states are prone to severe weather, which is part of the reason why rates are high compared to the rest of the country.

StateAvg. annual rate
Oklahoma$4,418
Kansas$3,920
Arkansas$3,422
Florida$3,418
Texas$3,412
Mississippi$3,318
Louisiana$3,249
South Dakota$3,149
Nebraska$3,112
Missouri$3,093

States with the cheapest home insurance rates for home insurance

Hawaii, California, Vermont, Utah and New Hampshire top the list of states where home insurance costs the least, compared to the rest of the nation.

StateAvg. annual rate
Hawaii$477
California$1,144
Vermont$1,194
Utah$1,356
New Hampshire$1,436
Nevada$1,457
DC$1,462
Washington$1,494
Maryland$1,503
Delaware$1,504

Home insurance advisor

By answering questions about your current policy, the Home Insurance Advisor will assess your needs and make recommendations for changes you should make to ensure sufficient coverage. The tool assesses the amount your insurer will currently payout for damages and injuries and tells you if you have enough coverage to protect your assets or not.

How to save money home insurance discounts

There are many types of home insurance discounts you can earn to get the cheapest home insurance rates for your particular homeowner profile. Some discounts are based on the materials and age of your home, some on how and when you pay your bill and others on upgrades or the types of security and safety features you have.  If you buy a new policy, look through your insurer's information for any discounts for which you might be eligible. Don't be afraid to ask your insurance company if you're not sure if you're eligible for a discount. Common discounts you can receive when you purchase coverage include a home and auto bundle and new home discount.

Here are the top 10 types of home insurance discounts that save you the most, based on a rate analysis by Insure.com:

  • New home construction – 40%
  • Age of home (five years or less) – 26%
  • Home and auto bundle – 18%
  • Series of upgrades (electrical, heating, plumbing) – 13%
  • Age of home (10 years or less) – 13%
  • Construction type (fire-resistive, superior) – 11%
  • Roof upgrade – 11%
  • Advance purchase – 9%
  • Loyalty (10 years or more) – 8%

How to shop for homeowners insurance

When shopping for home insurance, you want to be sure you get the coverage you need from a company with great customer service at a price that is reasonable.

Here’s how to buy home insurance:

  1. Learn the basics of how home insurance works: Make sure you know how the different parts of a home insurance policy work to protect you and your home and belongings.
  2. Make sure you have enough coverage: You want to have enough dwelling coverage to rebuild your home. You can ask your home insurance company for help in determining this amount, hire an appraiser or use online tools that help calculate rebuilding costs. Experts recommend $300,000 of liability insurance.
  3. Research homeowners insurance companies customer satisfaction ratings: Check listings of the best homeowners insurance companies to see how providers rank on customer service.
  4. Create a list of four or five companies based on your research: Compare home insurance quotes from at least three companies, more is better, to be sure you find the most affordable rate. Be sure you get quotes for the exact same coverage amounts. Whether you decide to buy homeowners insurance online or through an agent, you’ll typically need to have the rebuild cost of your home, prior inspection reports, insurance history and your financing details and lender requirements for coverage, if any.
  5. Check discounts: Once you have a quote from several companies, research the discounts offered. One company may have more that match your homeowner profile, which means a lower rate compared to others. If you decide to buy homeowners insurance online, you can find out about discounts while perusing insurance company websites.
  6. Compare quotes and choose a company: Once you’ve compiled a list of companies with their quotes and service ratings, check for discounts, decide which one suits your needs best, buy the policy and choose a start date for it. Cancel your old policy once the new one is in effect if you’re switching carriers.

Read more about how to buy home insurance in 6 easy steps

FAQs about home insurance

What is home warranty insurance?

A home warranty is a service contract that you pay a monthly fee for that allows you to pay a set amount to repair major appliances and household systems. You pay a service call fee and a discounted amount for the repairs or replacement. Exactly what’s covered depends on your contract, but typically home warranties cover HVAC and electrical systems and water heaters. Some also include refrigerators, washers and dryers and you can add on coverage for septic systems, pools and hot tub and more.

A home warranty is a separate service contract. It is not home insurance but rather supplements it. If your home and appliances are relatively new, it’s not worth it to pay for a home warranty. The systems and appliances are likely covered by manufacturer warranties if they do fail, which is unlikely. However, if your home and appliances are old, it may be worthwhile in some cases. While you do pay a discounted rate and don’t have to find qualified repair businesses, most contracts don’t cover repairs needed due to normal wear and tear or improper maintenance. It may be likely that your definition of proper maintenance differs from the home warranty provider’s. That means in many cases you have to prove that you’ve done proper maintenance to get the home warranty company to do the work.

How much home insurance do I need?

You should select a dwelling coverage amount that covers the cost to repair damage to your home or rebuild it completely at the equal quality — at current prices.

Does home insurance go up every year? 

In general, home insurance costs are trending upward, though what you pay will depend on your particular situation, your insurer, where you live and the type of home you have, among other things.

Here are common reasons why home insurance rates increase:

  • Your insurer raised rates to cover its cost of doing business
  • You filed a claim or live an area where many others have
  • You added a pool, trampoline, woodstove
  • You’ve added a certain breed of dog to the family
  • You built an addition or did a major renovation
  • Inflation
  • Construction costs in your area increased
  • Your credit score changed for the worse
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