Shopping for the right home insurance policy on your own isn’t a simple or fun process. It is however something that everyone needs to safeguard their home. For that reason, we wanted to show you how to pick the best home insurance and the most important things to consider when searching for a provider and policy.
After compiling research from dozens of reviews and independent-rating agencies, as well as interviewing an agent with over 15 years of experience, I found that there’s no one-size-fits-all option. The one national company that separates itself from the other big dogs in the pack is State Farm with its plethora of well-trained agents, excellent financial standing, and a top-tier customer experience. However, even with a company as strong as State Farm, many people felt that the personal connection was lackluster compared to more regional outfits.
Overall, with something as individualized and geographical as home insurance, selecting a sole winner seemed impractical. Thus, I decided to mention some of my favorite regional picks alongside State Farm. I found that Amica Mutual, Erie Insurance, and individual Farm Bureaus were often preferable to a large company like State Farm because of their region-specific knowledge.
How I chose the best homeowners insurance
I chewed on dozens of home-insurance reviews and ratings from around the web for over 45 hours to determine where customers were consistently satisfied. I compared various quotes and reviews from 10 of the top-rated national companies, as well as 15 of the highest-ranked regional companies, and referred to J.D. Power to single out the companies that are the best to deal with. I also chatted with an insurance agent of over 15 years to get a firsthand look into the expectations of consumers.
Deciding who will pay the bills in the event of a catastrophe is no small task. Everyone wants to work with a company that they can trust to have their back when they call. I decided to put most of the weight on customer-service ratings. Any company can trumpet cheap prices and discounts, but whether or not they’ll be willing to uphold their end of the deal when push comes to shove is what really counts.
Other home insurance companies to consider
While I felt it was unfair to call any major company the best overall in this field, I did find that certain ones stood out in a number of subcategories. Here are a few of my suggestions:
Best cheap home insurance
Travelers
Everyone loves a good discount. Even a ballooning premium can be offset with smart discount shopping. Travelers is a great hub for diversified discount options, including multi-policy, new homebuyer and LEED (Leadership in Energy and Environmental Design) discounts. With some education on available discounts, Travelers can be a great option to save some big bucks.
Best renters insurance
Allstate
While the protection of your dwelling will fall on your landlord, renters’ insurance will protect your personal property within the building that you rent. Otherwise known as an HO4, Allstate’s renters’ insurance boasts coverage of reimbursed living expenses, liability protection, and guest medical protection. Also, you can tack it on to your bill for around $4 if you insure your vehicle with them.
Best military home insurance
USAA
The undisputed champ of customer service, this powerhouse has been serving military members for over 90 years. Although USAA is only available to past and present service members, it is often considered to be the paramount insurance company in both home and auto. Offering an unprecedented level of personal-property coverage, paired with unmatched customer loyalty, USAA is the clear choice for all who are eligible.
Best flood insurance
State Farm
Flood insurance is almost always sold separately from the main policy. If you live in a high-risk area, this is one of the most important purchases you can make. Like most insurers, State Farm writes their flood insurance through the National Flood Insurance Program (NFIP). They are lauded for their customer service, speedy payouts, and top-rated agents who are ready to help in the event of a flood. It’s smart to consult a local, preferably independent, agent that can help determine the level of flood protection you need where you live.
Best old home insurance
State Farm
Insuring an old home is trickier than any other home. Many companies won’t even take them on because of the potential liability. State Farm, however, shines with affordable rates, thousands of helpful agents, and a great HO8 policy. There is no better place to insure your rustic abode than State Farm.
A full review of the best national home insurance company
Everyone needs his or her own “fortress of solitude” after a stressful day, and your domicile is truly the last great refuge. A good home-insurance company should provide the same safety, security, shelter, and peace of mind that your home does.
While no national company had a clear leg up on regional competition, State Farm is unsurpassed when it comes to agent availability and customer satisfaction. By holding the largest market share and one of the strongest financial rankings in the nation, any fear that it won’t have the cash to back you up in the future is unwarranted. One big financial advantage it holds is being a mutual company, meaning its policyholders own it outright. By not trading publicly on a stock market, the pressure to adjust prices according to the whims of Wall Street isn’t an issue.
A pivotal factor that makes State Farm the most attractive large-scale insurer is the sheer breadth of personal agents it has at the ready. When shopping for your policy, an open dialogue with a real human being who is located in your region can save you from pointless money-sinks, and point out some critical policy add-ons that you may overlook to save a quick buck. State Farm has agents in just about every major region of the United States, making it much easier to connect and meet with the one for you.
State Farm also offers flood insurance through the National Flood Insurance Program (NFIP). Getting your home and flood insurance from the same company could lead to meaningful savings. First, it’s smart to assess whether or not you even need to buy flood insurance. Depending on your flood zone, you may be required to get full flood coverage on a mortgaged home.
The company also raises the bar with their online features, including an excellent quote tool, unmatched informational resources, and the applauded “Pocket Agent” mobile app. Its online capabilities paired with its legions of dedicated agents make State Farm an excellent option for those in State Farm’s coverage areas.
Who is it best for?
As mentioned earlier, there is no “one-size-fits-all” option for home insurance. With factors such as geography, your house’s age, and flood zones playing a pivotal role in determining your policy, it’s best to look local for counsel. Overall, State Farm is as strong as any major home insurer can be, but no company can appeal to the people of every region. Above all, I encourage you to find a local agent to help guide you toward the right coverages for your specific home in your region.
Who should skip it?
You may be asking, “Why not just crown State Farm?” To put it simply, State Farm fell short in some of the areas where only small companies could excel. With 20 percent of the market share, it’s impossible to please everyone, but State Farm faltered in some areas of importance when compared to local insurers.
For example, having such a large area of coverage prevents it from delivering some geo-specific discounts and coverage that customers may expect. Notably, they do not offer landslide insurance, which covers damages caused by landslides and land movements caused by flooding, snowmelt, or tectonic activity. This is of no concern to those who live in a flat area, but those who live in hilly or mountainous areas should consider finding a local company to pick up this coverage.
A full review of the best regional home insurance companies
What if you live in an area where State Farm’s coverage is insufficient, or simply doesn’t offer the precise coverages you need? If you own oceanfront property, reside in Tornado Alley, or have a home that’s on a known fault line, it’s possible that State Farm won’t offer the level of coverage you need to protect your home. In cases like these, regional insurers may offer a more complete portfolio of add-ons to address region-specific concerns. My top picks are outlined below, but I’d encourage you do a bit of research in your local market with an agent to determine which outfit is best suited for you.
Amica Mutual
Amica Mutual is considered to be one of the preeminent insurers in the United States. Holding an impressively high customer service and financial rating, as well as being J.D. Power’s overall top pick for 2014, I found that Amica is one of the finest insurance companies in the nation. Boasting a claims service that pays out within 24 hours of an accident and a home repair assistance program that connects you to over 2,000 contractors to ensure a speedy cleanup, Amica is well equipped to come to your aid. The only reservation I had about putting it in the winner’s circle is that they serve less than one percent of the market and are not available in every state.
For all the good, even a great insurer is bound to fall short somewhere. Amica is lacking in a few key coverage areas that would limit their overall reach. You won’t find mobile home, farm, or ranch coverage at Amica, and those who reside in older homes are sure to walk away empty-handed as well. There is also a dearth of payment plan flexibility, as you are required to either pay one full payment or 10 monthly payments.
Despite a few downsides, Amica is considered to be one of the pinnacles of regional home insurance. If Amica is available in your area and you fit into its coverage options, it is definitely worth reaching out and getting a quote.
Erie Insurance – Midwest to Atlantic coastal states
Erie Insurance is cut from the same cloth as Amica Mutual. This company is held in high esteem by its clients and prides itself in bringing more personalized policies to its clients by staying focused on the 12 states it serves from the Midwest to the Atlantic Ocean (including the District of Columbia). Boasting a 4-star J.D. Power ranking and consistently impressive customer-experience ratings, Erie offers some of the most all-encompassing coverage in the field for the greatest value.
Comprehensive discounts are what give Erie the financial edge over larger companies. It offers a wide variety of discounts from new home and multiple policies to a price break for policyholders of 45 years of age and older, which is a unique discount option. Through discounts, Erie can save you as much money as anyone.
Although Erie is only available to a small portion of America and doesn’t offer much in the way of learning material or mobile accessibility, it is an excellent option to check into if you live in their area.
Farm Bureau – state by state
Another great option is your state’s Farm Bureau insurance. Some states offer this independently and some offer it through an existent agency. I am insured under North Carolina Farm Bureau and have found their service and loyalty to customers to be exemplary. Not only are state bureaus more focused on their clients, but also they hold unparalleled knowledge of area-specific pitfalls and advices. I highly recommend checking at your state’s Farm Bureau to see if you are eligible for insurance.
To sum it up, there is no way to define a single “best” home insurance provider. The beauty of owning your home is that it’s an extension of yourself, making it just as individual as you are. One company that works perfectly for one house very well may not be a good fit for yours. This is why finding a trusted local agent is worth more than any research you can do on your own.
Choosing the right type of home insurance for you
For the most part, I found that local and regional agencies are the best option for most home owners. I’d highly recommend finding a local agent and letting him or her help guide you through the twists and turns of your individual policy. In my interview with G.K. Pippin, an agent of a regional insurance company, he also asserted that local is better:
“I would recommend that any new customer connect with a local agent before buying. Local agents are better equipped to handle your policy with their insightful knowledge of the potential risks in the area.”
— G.K. Pippin, Insurance Agent
Being mostly geographically determinate, regional companies tend to be preferable when it comes to home insurance. While the major national companies archetypally deliver excellent coverage, the significance of a personal connection to your area can’t be overstated.
In the automotive world, highways are highways regardless of your location. When it comes to insuring homes, regional outfits are best equipped to understand the nuances of weather, crime rates, reconstruction costs, fire and police protection, etc. All of these factors play a major role in determining one’s premium and coverage level. For example: in coastal North Carolina, local insurers offer far more wind and hail coverage options than a national carrier, which could come in handy if a hurricane rolls through.
In my interview with G.K. Pippin, I asked him to walk me through some of the policy tips he’s given his clients. He responded:
“I always recommend water- and sewage-damage coverage. Most policies don’t include [these], and [they are] usually skipped over. It’s an inexpensive add-on and the damage, especially on a wooden floor, can be financially [disastrous].”
— G.K. Pippin, Insurance Agent
Understanding coverage
Starting to feel overwhelmed by all of the insurance jargon? I get it. Understanding the types of coverage that exist is the first step in choosing your policy. While there are dozens of optional coverage add-ons, let’s go over the basics to help simplify things.
Dwelling coverage – This coverage safeguards from you from financial harm if your home or attached buildings are damaged by disasters like a windstorm, lightning, or vehicles. You can purchase however much you want, but it is recommended that you buy enough to rebuild your abode in the event of an accident.
Other structures protection – This simply protects disconnected structures from your house such as a barn or a carport. This typically starts around 10 percent of your dwelling coverage, but you can adjust it as you see fit.
Additional living expense coverage – Finding a place to live while your home is being repaired can be a headache. This coverage helps you pay for the cost of relocating while damage to your home is being repaired. Most states allow coverage up to 12 months, but some allow it for 24 months.
Water-backup coverage – Different than flood insurance, this covers damages from water that flows from the ground up . This is a coverage that some skip on, but could be a huge money saver.
Personal-property insurance – Most base-level insurance policies only cover damages done to the structure of your dwelling. Personal-property insurance protects your belongings in your home. It is imperative that you get the right amount of coverage for this, and specify how much coverage you want to go toward certain items. Take the time to detail everything you would want replaced and adjust your policy to match that figure.
Family liability protection – Helps to cover the liability if disregard and negligence lead to the damage of others to property. This also can assist in paying for any required legal defense.
Guest medical protection – This helps to pay for the medical expenses of anyone injured on your own property. Typically covers up to $5,000.
Fire department charges coverage – Covers the costs that a fire department would charge to put out a fire at your home. Typically covers up to $5,500.
Picking a policy
Picking the right policy to protect your home is no menial chore. Home insurance is arguably the most complex to shop for. While we all have the DIY spirit deep inside of us, it’s recommended that you seek the counsel of an agent to help guide you through the pool of policy and coverage options. An agent will not only help you find the best policy for you, but will also ensure that you don’t pay extra for unneeded coverage.
A continued dialogue with your agent can help eradicate a plethora of misunderstandings when it comes time to choose a policy. Even after you pick your policy, it’s imperative that you continue to communicate with your insurer to verify that no changes have been made to your policy, unbeknownst to you. G.K. Pippin agreed that most of the customer complaints he has heard stem from a lack of communication between parties.
“The biggest issue I see is clients not staying in contact with their agent. You should check with your company annually to verify that no changes have been made to your policy.”
— G.K. Pippin, Insurance Agent
If you are an exceptionally cautious person, or have many personal items you would like to protect, be prepared to pay a heftier premium every month. With all insurance, you get the level of protection that you pay for. The significance of thoroughly going through your policy options with your agent can’t be overstated.
Another nugget to keep in your mind is that there are many factors that can affect the cost of your policy. Here are some to consider:
- Owning certain items that have higher potential for risk — such as a swimming pool or trampoline — can drive your premiums up quickly.
- Owning a more aggressive breed of dog can escalate pricing.
- Your home’s distance from a fire station or hospital plays greatly into how much you’ll pay; if you live too far away from either, some insurers won’t even write a policy for you.
- Anything than can be perceived as a danger by your insurance company, will be. Thankfully, there are discounts you can acquire to counteract this, such as installing a security system.
- The more risk you can eliminate, the more likely you are to save money on your policy.
Common policy options
As complicated and overwhelming as the nuts and bolts of home insurance can be, there is a silver lining: Due to regulations from the Insurance Services Office, all insurers must provide the same types of coverage and call them by the same name. This will wholly expedite comparing policies amongst multiple competitors. To make it even simpler for you, I have put together a list of common home insurance policy options that most companies will carry.
HO0 – Dwelling & fire
The base level of insurance policies, HO0 is limited protection that covers damage caused by fire, smoke, explosions, lightning, windstorms, hail, civil unrest, and vehicles. It should be noted that there is nothing but dwelling coverage in this policy; personal property and liability are unprotected.
HO1 – Basic form
Not available in every state, this policy protects your abode against 11 perils: Theft, vandalism, hail, lightning, windstorm, fire, aircraft damage, vehicle damage, volcanic eruption, civil commotion, and glass breakage. This coverage covers your dwelling, and you can add coverage of your personal items, as well.
HO2 – Broad form
Broad form is a comprehensive form of “named perils” coverage. Any peril that is unnamed will not be covered. All in all, this policy covers the 11 perils in an HO1 policy, plus falling objects, weight of snow and rain, and malfunctioning electrical or household equipment.
HO3 – Special form
If you are looking for an extensive policy plan, look no further. This policy is best for single-family homes and uses a different formula than the previous policies to determine the perils it covers. HO3 covers all perils except for those that are specifically excluded.
HO4 – Tenant’s form
Colloquially known as “renters’ insurance,” this form protects people who are renting their residence. While the responsibility of dwelling coverage will fall on your landlord, an HO4 will provide personal property and liability coverage.
HO5 – Premier
This is the most extensive policy available. It is essential an extended HO3 policy. It takes the open-peril basis of an HO3 and applies it to your personal property, in addition to your dwelling. Barring its exclusion, any damage caused by a peril to your structure or personal contents will be covered.
HO6 – Condo insurance
Much like HO4, this protects the personal property and personal liability of someone living in a condo. The perils covered are the same as an HO2.
HO7 – Mobile-home insurance
This policy is the same as an HO3 with protection for mobile and manufactured homes.
HO8 – Older-home insurance
Insuring an older home is a greater risk for any company, because the cost of repair would be more than market value of the home. Therefore, not every company provides this type of policy. An HO8 is similar to HO3 with additional provisions relevant to older homes.
What makes a good homeowners insurance company?
There’s no magic formula to create the perfect insurance company, but these are the features I devoted my attention to when determining my recommendations for the best home-insurance companies:
- Financial standing – The ability to pay back claims, in full, in a prompt manner
- Customer satisfaction – Treating customers like real people, not numbers
- Available, local agents – Having someone to call on goes a long way when your home is damaged.
- User and market research reviews – Compiling and distilling reviews from professionals around the industry.
- Available discounts – Much like auto insurance, discounts are plentiful if you know where to look
- History of claims handling – History says a lot about a company; you want a company that has been around for generations
- Online capabilities – Efficiency is key when it comes to handling claims, and a company’s digital prowess is important in today’s smartphone-driven culture
Final thoughts
Choosing the right home insurance is similar to choosing a home. In both instances, you are aiming to invest in stability. The right home-insurance company should be as trustworthy and unshakeable as the very foundation your home rests on. Even though you hope to never use your policy, it’s worth choosing an insurer based on how they’d react if you needed to.
Home insurance is among the most complicated and individualized forms of insurance you’ll have to buy. Realizing that there will never be a “one-size-fits-all” solution to home insurance, it’s impossible to make a uniform recommendation. In my research, I found State Farm, Amica Mutual, Erie Insurance, and Farm Bureau to be the best bets, but your location may yield an entirely different result. With the help of a personal agent to help sift through the jargon, you can find a company that you feel comfortable entrusting your safe haven to.
Have any thoughts, personal stories or questions you’d like to share? I’d love to hear what you have to say, so please, comment below!
Sources:
Interview – G.K. Pippin, Insurance Agent
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“The Best Renters Insurance for 2015,” The Simple Dollar, February 2015
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“Homeowner,” Flood Smart
“Types of Homeowners Insurance Policies,” Expert Insurance Reviews, August 2013
“Home Insurance – Personal Property Coverage,” Expert Insurance Reviews, August 2013
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“Do You Need Landslide Insurance?,” Insurance Quotes, August 2013
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“HO4 Renter Insurance Policy,” Insurance Education Group
“HO 8 Home Policy,” American Insurance Services
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