Purchasing homeowners insurance may feel like a necessary evil — yes, it’s another bill, but it does protect your most valuable asset in the event of calamity.
How to Chose the Best Cheap Homeowners Insurance Companies
We’d never recommend picking an insurance company based on price alone. The entire point of carrying insurance is to be taken care of in rough times. When that time comes, a super cheap policy with paper-thin protection won’t be worth even the tiny premiums you paid for it. Plus, rates aren’t one-size-fits-all. A ton of factors impact your home insurance quote: everything from the age of your house and its neighborhood statistics to your geographic area and its natural disaster risk. We already surfaced a collection of great companies in our review of the best homeowners insurance companies. Here, we identify which among them offer the greatest value by isolating customers’ satisfaction with pricing relative to their coverage.
When building your insurance policy, companies will offer discounts on your premium if you take measures that make you a lower-risk investment. For example, many companies give you a break for taking certain safety measures, like installing deadbolts or a security system. Most will knock their prices even lower if you don’t have a long claims history or if you sign up for autopay. We took into account the number and type of discounts offered to help maximize your chance at an affordable policy.
Independent agencies like A.M. Best, S&P Global, and Moody’s provide ratings on the financial strength of insurance companies. These agencies assess the ability of an insurance company to remain solvent in the event of major crisis or difficult economic times. While companies of such status seem invulnerable to failure, not even these have limitless funds. One notable example: American International Group (AIG) needed a government bailout during the 2008 recession. While many circumstances can influence the financial state of these corporations, their agency ratings are a valuable metric. A good rating is confirmation that an insurer can back your claim when it matters most.
J.D. Power’s annual U.S. Household Insurance Study and Consumer Reports’ customer experience survey measure communication, price satisfaction, claims process, and timely reimbursement. From J.D. Power, we required companies to have a score of three out of five or better, plus an above-average Reader Score from Consumer Reports. High scores reflect a company’s ability to handle claims and communication kindly, effectively, and without frustration.
We catalogued optional coverage additions that can fill gaps in your policy or cater to specific disaster-prone regions. Earthquakes, for example, aren’t covered in a standard policy, but for those living near fault lines, an endorsement that will cover damage resulting from an earthquake is wise. It’s important that insurance companies offer a variety of useful endorsements to help create a policy tailored to your home’s true risks.
The 7 Best Cheap Homeowners Insurance Companies
Amica – Best Customer Ratings
Allstate – Best for New Homeowners
State Farm – Most Personalized Quote
Liberty Mutual – Best for Inflation Protection
American Family – Most Ways to Save
Nationwide – Best for Replacement Coverage
USAA – Best for Military Members and Families