Best Homeowners Insurance for 2020

Best Homeowners Insurance for 2020

Choosing the best home insurance may be one of the most complicated insurance decisions youll make. Part of the reason is that home insurance is something of a quiet corner of the insurance universe.

Everyone talks about health insurance, life insurance is hot all over the Internet, and auto insurance is a staple of television. But far less is ever discussed about home insurance, and more specifically, who the best homeowners insurance companies are.

But if youve been looking for the best home insurance companies, youve come to the right place. In this guide, well be highlighting what we believe to be the best homeowners insurance companies available as well as the reasons for including each.best homeowners insurance companies

Best Homeowners Insurance Companies

These are the top 12 homeowners insurance companies in 2020:

1. State Farm

Best for: Low Rates

Of course, State Farm wont be the lowest cost provider in every state. And exactly how much youll pay will be determined by the coverage you need and the discounts available for your personal situation. The company has a good reputation and is top-of-the-line in financial strength.

State Farm Homeowners Policy Features:

Coverage options include full replacement cost coverage based on the actual cost to rebuild your home, umbrella coverage for excessive claims, up to $10,000 to replace damaged utility lines, identity theft protection and even damage resulting from mold. One unique policy provision is coverage for adult day care providers in your home. Available discounts include bundling with other policies, claim free for several years, and for alert systems, like fire and smoke detectors, burglar alarms, or a fire extinguisher.

  • J.D. Power Customer Satisfaction Rating: 831/1,000
  • A.M. Best Rating (company financial strength): A++

2. Amica Mutual

Best For: Customer Service

Amica takes top honors for customer service, as evidenced by its top ranking in the J.D. Power 2019 U.S. Home Insurance Rankings Study (see screenshot table toward the end of this guide). And its been sitting at the top of that list for all of 18 years!

Amica Homeowners Policy Features:

Policy provisions include up to $5,000 in reimbursement for fraudulent credit card charges, home business coverage, coverage for damage due to water backups or sump pump overflows and extended coverage for high-value possessions, like jewelry. Discounts are offered for bundling with other policies, going claim-free for at least three years, having homeowners insurance with any company for a minimum of two years, safety equipment (like alarms and monitoring devices for gas leaks, etc.), and even for electronic billing and communications.

  • J.D. Power Customer Satisfaction Rating: 845/1,000
  • A.M. Best Rating: A+

3. Allstate

Best For: Seniors

We like Allstate for seniors because its a large company with plenty of customer support which is just what seniors need. They also offer plenty of discounts to keep the annual premium as low as possible. But they offer specific discounts for those 55 and older and retired.

Allstate Homeowners Policy Features:

Allstate offers its Claim RateGuard (for an additional premium fee) that will keep your rate from going up after filing a claim. Youll have to measure the cost of the add-on versus the likelihood of filing a claim at all. Other policy provisions include coverage for identity theft, water backup, business property, landscaping, and even electronic data recovery. On the discounts front, you can save up to 25% when you bundle homeowners with auto insurance. Theyll also give you 5% just for having your premium payment auto drafted. And you can get a discount of up to 20% if you switch to Allstate and have no recent claims.

  • J.D. Power Customer Satisfaction Rating: 814/1,000
  • A.M. Best Rating: A+

Allstate Homeowners Insurance Allstate allows you to bundle your renters insurance with your car insurance and save money each month! Get Started Allstate Homeowners Insurance

4. Farmers

Best For: Special Discounts

Farmers offers the usual list of policy discounts, including bundling and security systems. But they have a couple that are unique in the industry. For example, they provide discounts for certain professions, like teachers and medical professionals. They also offer decreasing deductibles when you go claim-free. That may not lower your premium, but it will reduce your out-of-pocket in the event of a claim.

Farmers Homeowners Policy Features:

Options includes extended replacement that enables you to rebuild your home at current price levels, Eco-Rebuild providing up to $25,000 if you reconstruct your home using environmentally friendly components, and even provisions for complying with updated building codes if your home has to be rebuilt.

  • J.D. Power Customer Satisfaction Rating: 808/1,000
  • A.M. Best Rating: A

5. Lemonade Insurance

Best For: Paying Claims Fast

No list of the best homeowners insurance companies would be complete without at least a quick mention of a new competitor in the field, known as Lemonade. The company is unique from those listed above, in that it operates as a peer-to-peer provider, rather than as a traditional insurance company.

Lemonade uses technology to both simplify the process of obtaining homeowners insurance, as well as making it less expensive. Rather than using the traditional insurance company model, participants in the group pool their money through the payment of insurance premiums, making the funds available when claims are needed by any individual. If youre familiar with the concept of Christian health sharing ministries, Lemonade is similar, except that it operates as a web platform and its not faith-based.

They offer both homeowners and renters insurance, with policies based on the value of the property youre insuring, as well as other factors normally considered by insurance companies. But because they take a non-traditional approach, premiums are typically lower than they are for traditional insurance companies, starting as low as $25 per month for homeowners insurance.

They provide the usual types of coverage, including replacement value of your home and the contents, as well as hazards such as theft and vandalism, fire and smoke damage, and weather-related damage caused by rain, snow, and hail. Policies also include both liability insurance and medical payments.

Lemonade Homeowners Policy Features:

One big advantage with Lemonade is that you can get a policy with no deductible. Meanwhile, you can incur two claims with no rate increases.

Yet another benefit of Lemonade is instant claim payments. Since the company operates as a peer-to-peer group, you only need to send a list of whats been stolen or destroyed, along with a video explaining the situation. Your claim will then be paid almost instantly, which is quicker than youll get with most insurance companies.

Just in case it sounds as if Lemonade is the perfect alternative to traditional homeowners insurance providers, there are a few drawbacks. First, the service is only available in about half the states. Second, the low premiums and the fast (and easy-to-document) claims payouts could spell higher premiums in the future, or even any year in which they dont cover payouts. Third, Lemonades policy provisions arent as generous as traditional insurance companies. Benefit limits may be lower, and there are no discounts available since they dont provide other types of coverage.

But if youre looking for a fairly basic level of homeowners insurance at a low rate, Lemonade is certainly worth taking a look at. And who knows it may be the future of homeowners insurance.

  • J.D. Power Customer Satisfaction Rating: Not rated
  • A.M. Best Rating: N/A

Lemonade Lemonade Insurance offers a new approach to homeowners insurance. They even give back up to 40% of unclaimed money to the nonprofit of your choice. Get A Quote Lemonade

6. USAA

Best For: U.S. Military & Their Families

USAA is virtually the go-to company for US military members, veterans and their families. In fact, the company is a full-service financial provider, offering banking, investing, and loan services, in addition to auto and homeowners insurance. Whats more, the company offers its policies in all 50 states. They share an A++ financial strength rating from A.M. Best with State Farm and Geico, as well as the highest customer service rating from J.D. Power.

One major limitation is that USAA is not available to the general public. Its available only US military active members and veterans, and their families.

USAA Homeowners Policy Features:

USAA offers all the standard policy options available from their competitors. But they also offer both flood and earthquake insurance, as well as business insurance for home business equipment, and personal umbrella coverage for high claims. Discounts are available for up to 10% when you bundle with an auto insurance policy, another 10% if you go claim free for at least five years, good payment history, membership loyalty, and lower rates for newer homes, particularly those that include certain safety equipment.

  • J.D. Power Customer Satisfaction Rating: 878/1,000
  • A.M. Best Rating: A++

7. Erie Insurance

Best For: Landlords

If your home is also is a source of rental income, Erie Insurance offers income protection if your tenants are forced to vacate the unit due to hazards like fire. But theres a lot more to this little-known company than rental income coverage. It ranks second only to Amica in customer satisfaction, and has a strong rating from A.M. Best. If the company has a disadvantage, its that its not available in all states.

Erie Homeowners Policy Features:

Erie offers guaranteed replacement cost coverage, which typically provides higher reimbursement than a fixed limit policy. They also offer home business protection, and service line coverage in case you damage a buried utility line on your property. Homeowners insurance comes with discounts for bundling policies, safety systems (like fire alarms and sprinkler systems) and even an advance quote discount to new customers. The company also provides earthquake and flood insurance However, they only offer coverage in about a dozen states.

  • J.D. Power Customer Satisfaction Rating: 838/1,000
  • A.M. Best Rating: A+

8. The Hartford

Best For: Retirees

Allstate may be the best company for seniors, but The Hartford offers discounts specifically targeting retirees. For example, youll get a discount if youre a member of AARP. But youll also get a retiree credit. Youll be eligible for the credit if you work less than 24 hours per week. Those two features, in combination with an auto insurance bundling discount that can lower your premium by as much as 20%, can represent serious savings for retirees.

The Hartford Homeowners Policy Features:

The Hartford offers a disappearing property deductible, enabling your deductible to decline as you go claim-free. They also provide full replacement cost if you need to rebuild your home, the ability to replace personal items at current value, rather than depreciated value, protection from water backup or sump pump failure, waiver of certain deductibles, identity fraud coverage of up to $50,000, and assisted living care coverage for liability and personal property of a relative living in an assisted living facility.

  • J.D. Power Customer Satisfaction Rating: 806/1,000
  • A.M. Best Rating: A+

9. Liberty Mutual

Best For: Inflation Protection

Liberty Mutual automatically adjusts your coverage amounts upon policy renewal to make sure that your coverage limits reflect current price levels.

Liberty Mutual Homeowners Policy Features:

They also include policy riders for water backup and sump pump overflow, and identity fraud expenses. Separate policies are available for both flood and earthquake insurance. Discounts include multi-policy bundling, a claim-free discount if you go at least five years without filing a claim and switch to a Liberty Mutual policy, new home purchase, installation of protective devices, a new or recently renovated home and a military discount for active members.

  • J.D. Power Customer Satisfaction Rating: 792/1,000
  • A.M. Best Rating: A

10. Nationwide

Best For: Recent Home Renovations

Nationwide provides you with a credit if you upgrade your home with new components, like heating, air-conditioning, and plumbing and electrical systems. That will give you a discount on your policy premium. But they also offer a discount if youve purchased your home within the past year.

Nationwide Homeowners Policy Features:

Nationwide property replacement cost, but rather replacement cost plus in which standard coverage is increased by 20% if you need to rebuild your house. They also provide coverage for identity theft up to $25,000, water backup, and replacing a damaged roof with superior materials. Discounts are available for bundling with other coverages, protective devices, going claims-free for at least three years, or switching from another insurance carrier.

  • J.D. Power Customer Satisfaction Rating: 796/1,000
  • A.M. Best Rating: A

11. MetLife

Best For: Replacement Cost Policies

Many companies offer a specific dollar limit on a homeowners insurance policy. But MetLife offers guaranteed replacement cost in most regions of the country. Under this type of provision, youll be covered for the full cost to rebuild your home. This can be a major advantage because inflation has caused the cost of rebuilding a home completely to rise above the market value of homes in many market areas.

MetLife Homeowners Policy Features:

Options include a single deductible for both your home and auto policies, so you wont be hit for deductibles for both policies in the same year. They also offer identity theft protection coverage at no additional cost. Discounts are available for homeowners who are 55 years old and older and also retired. You can also get discounts for protective devices, if your home is been constructed within the past year, or if you bundle with other MetLife policies.

  • J.D. Power Customer Satisfaction Rating: 791/1,000
  • A.M. Best Rating: A+

12. Geico

Best For: Financial Strength

This is a title Geico shares with USAA and State Farm, with each having an A++ rating for financial strength from A.M. Best. Many consumers may overlook this quality, but the strength of an insurance company can indicate 1) the likelihood that the company will remain in business, and 2) the probability theyll pay your claim. A lack of financial strength could interfere with either.

But apart from financial strength, Geico is also one of the lowest-cost providers in many markets. Theyre also aggressive on the bundling front, offering large discounts when you pair your homeowners insurance with one of their well-known auto insurance policies, which are also usually one of the lowest-cost plans in most markets.

Geico Homeowners Policy Features

The major disadvantage with Geico is that the company doesnt have a customer satisfaction rating from J.D. Power. Much like its major auto insurance competitor, Progressive, Geico doesnt offer their homeowners policies directly. This may be the reason why the company doesnt have a customer service satisfaction rating for homeowners insurance policies (neither does Progressive). Instead, their homeowners insurance is provided by third-party companies. But the bundling discount will usually make this a non-issue. And because of the use of third-party providers, no information is readily available on special policy provisions or discounts. Those will vary based on the third-party provider Geico sets you up with.

  • J.D. Power Customer Satisfaction Rating: Not rated
  • A.M. Best Rating: A++

What You Should Know About the Best Homeowner Insurance Companies

Here are the most important factors to consider when evaluating the best homeowners insurance companies.

Customer Service and Satisfaction

Were basing the customer service and satisfaction of each company on the J.D. Power 2019 U.S. Home Insurance Rankings Study which provides overall customer satisfaction index rankings for major homeowners insurance providers:

Which Homeowners Insurance Company Has the Best Customer Service?

Based on the table above, three companies stand out above the rest in overall customer service and satisfaction:

  • Amica
  • Erie
  • State Farm

This was a major reason for each of these three companies placing so well on our list of the best homeowners insurance companies.

Claims Services

Though many consumers are understandably concerned primarily with getting a low-cost homeowners insurance policy, a critically important criterion is company reputation on claim services. After all, thats the whole reason you have any type of insurance policy at all. The more likely a company is to pay claims with a minimum of hassles the better the end product is.

Which Homeowners Insurance Provider Has the Best Claims Reputation?

We werent able to come up with any specific list of homeowners insurance companies that are the strongest in this category. However, since claims services are a major part of the J.D. Power Home Insurance Rankings Study above, the top three contenders once again are:

  • Amica
  • Erie
  • State Farm

Financial Strength Ratings

For consumers purchasing insurance of all types, financial strength ratings are often overlooked. Thats because consumers tend to favor specific coverage options at the lowest price. But financial strength ratings should never be overlooked!

We obtained our financial strength ratings from the insurance industry rating service, A.M. Best. Youve probably noticed that every one of the companies weve included in this guide have a rating of A or better. Thats not an accident. We consider financial strength ratings to be a critical component of the value of any company you might purchase insurance from.

Financial strength ratings are important because they indicate a companys ability to continue as a going concern, as well as having the financial ability to pay claims.

Which Homeowners Insurance Companies are the Strongest Financially?

While all companies on this list have good ratings, three stand out with each having top level ratings of A++:

  • State Farm
  • USAA
  • Geico

That doesnt mean those companies are automatically better than the others. But it is an indication that they are at the top of the food chain when it comes to overall financial strength. If the decision between one company and another is roughly equal, you should lean toward the one with the higher financial strength rating.

Price and Policy Value

This is the most subjective part of rating the best homeowners insurance companies. We attempted to include companies that tend to be on the lower end of the premium scale in many markets, but that evaluation is hardly scientific.

The reality of insurance of all types is that price varies based on a large number of factors including, but not limited to, the following:

  • The amount of insurance coverage you need.
  • Specific policy provisions that will be required for your personal situation.
  • Your claim history, if any.
  • The particular market where your property is located (premiums can vary dramatically from one market area to another).
  • Your personal financial profile.
  • Available discounts, based on the features of your property, your ability to bundle homeowners insurance with other policies with the same company, and any specific personal factors that might entitle you to other discounts, like your occupation, education, professional associations, etc.
  • Specific risk factors in your profile or property, such as the type of dog breed you own, any tenants you may have on your property, operating a business from home, owning certain high value possessions, or additional structures on the property, like outbuildings.

What this all means is that a company that will be particularly inexpensive for one person may not be so cheap for another. All premiums are determined by a matrix of factors, which will affect the outcome of how much youll pay.

This is also why strongly recommend you make an application with multiple homeowners insurance providers to ensure youre getting the lowest possible premium. Just make sure the policy provisions between competing companies are identical. Thats the only way to know if youre truly paying a lower price for the policy.

The post Best Homeowners Insurance for 2020 appeared first on Millennial Money.

Related Posts

Back to blog