Cheap Homeowners Insurance

The best home insurance companies offer more than just low rates

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If you’re like most people, your home is the largest single investment you’ll ever make. To protect that investment, you need a good home insurance policy. Homeowners insurance protects against losses if your home or personal property is damaged or destroyed by fire, weather, theft, or other covered disasters. It also covers your personal liability for injuries to other people or their property while they’re on your property.

Before you buy a policy, think about the coverage limits and deductible you want, as well as any optional coverages you will need for things such as flood insurance, collectibles, expensive electronics, and the like. In general, you can save money if you opt for less coverage and a higher deductible. The most expensive policies will provide better coverage and a lower deductible. Shop around to find a balance that works for you and your budget.

We compared more than 25 home insurance companies to find the best options for shoppers on a budget. While cost was a consideration, we also looked at nationwide availability, customer satisfaction from J.D. Power, financial stability from A.M. Best, grades from Consumer Reports, and ratings from the Better Business Bureau (BBB). Based on our findings, here are the top six cheap homeowners insurance companies for 2020.

Best Cheap Homeowners Insurance Companies of July 2020

  • Amica: Best Overall
  • Allstate: Best for Discounts
  • Farmers: Best for Mobile Homes
  • State Farm: Best for Local Agent Support
  • AARP Homeowners Insurance—The Hartford: Best for Seniors
  • USAA: Best for Military Families

Amica: Best Overall

Amica Mutual Insurance

Amica earned Best Overall due to its competitive rates, discounts, and high ratings for customer satisfaction, stability, and reputation.

Pros
  • High ratings and low consumer complaints

  • Platinum Choice Home package

  • Option to earn dividends 

Cons
  • Confusing policy options (i.e., traditional vs. dividend policy)

  • Rates set using credit-based insurance scoring

  • Bugs in the mobile app

COVID-19 Relief: Amica customers experiencing financial difficulties due to COVID-19 can request a repayment plan. Options may vary by state.

Amica Discounts

You can save up to 30% when you combine home with your auto, condo, renter’s, life, or umbrella policies.

  • Loyalty discount (after two years)
  • Claims history discount (when you’ve had no claims in the past three years)
  • Autopay discount
  • E-Discount (when you sign up to receive bills and information electronically)
  • Alarm system discount (for burglar alarms, sprinkler systems, and fire alarms)
  • Automatic detection device discount
  • New/remodeled home credit

Amica Coverage Options

In addition to standard home insurance coverage options, you can add these coverage options to your policy:

  • Dwelling replacement
  • Valuable items
  • Identity fraud expenses
  • Personal property replacement
  • Catastrophic coverage
  • Home business
  • Platinum Choice Home Package (includes standard coverage plus business, computer, credit card, and water backup coverage)

Allstate: Best for Discounts

Allstate

Allstate offers an above-average variety of discounts and savings opportunities, all of which can help you save big on your premiums.

Pros
  • Excellent options for discounts

  • Customizable policies

  • Claim forgiveness

Cons
  • Average customer satisfaction ratings

  • Discounts not available in all states

COVID-19 Relief: Allstate auto, home, and powersport insurance customers facing financial challenges due to COVID-19 can request a special payment plan to delay payments without penalty.

Allstate Discounts

  • Save up to 25% when you bundle home and auto policies
  • Save up to 20% when you switch to Allstate without a recent home insurance claim
  • Save up to 5% when you set up automatic payments
  • Save up to 10% for switching to Allstate, and save 10% every year after that
  • Homebuyer discount, if you buy a newly constructed home, or if you’re a recent homebuyer
  • 55 and retired discount
  • Additional discounts for smoke-free homes, homes with storm shutters, homes with hail-resistant roofs, and more

Allstate Coverage Options

In addition to standard home insurance coverage options, Allstate offers coverage for:

  • Identity theft restoration
  • Water backup
  • Scheduled personal property
  • Business property
  • Green improvement reimbursement
  • Yard and garden
  • Electronic data recovery
  • Musical instruments
  • Sports equipment

Farmers: Best for Mobile Homes

Farmers Insurance

Founded in 1928, Farmers is the fifth-largest home insurance company in the U.S. It offers home insurance policies for traditional and specialty homes, including mobile homes.

Pros
  • Claim forgiveness

  • Declining deductible

  • Eco-rebuild option

Cons
  • Coverage not available in every state

  • Online quote system insufficiently detailed 

COVID-19 Relief: Farmers home insurance customers can request an extension without any late fees.

Farmers Farmers Discounts

Depending on where you live, Farmers offers discounts to help you save, including:

  • Bundle discounts if you buy multiple policies from Farmers
  • Business/professional group discount
  • Nonsmoker discount
  • Discounts for deadbolts and strong locks
  • Discounts for security systems that connect to local police
  • Discounts for a fire alarm that automatically alerts the local fire department

Farmers Coverage Options

Farmers offers three customizable packages as a starting point:

  1. Standard—Designed for homeowners who are just starting out
  2. Enhanced—Higher policy limits and extra features
  3. Premier—Highest limits and coverage on personal property, with optional guaranteed replacement cost

The three packages are customizable, and you can raise or lower limits and add or change coverage. Additional coverage options for the packages include:

  • Eco-Rebuild (get up to $25,000 toward the extra cost of replacing materials and appliances with green alternatives)
  • Contents Replacement Cost Coverage
  • Identity Shield

State Farm: Best for Local Agent Support

State Farm

State Farm ranks 33rd on the Fortune 500 list of largest companies and holds 18% of the home insurance market. The company has more than 58,000 employees and more than 19,000 independent contractor agents who service 83 million policies and accounts nationwide.

Pros
  • An extensive network of agents

  • Robust mobile app

  • High customer satisfaction ratings

Cons
  • An online quote system that may not match you to the closest agent

  • No option for flood insurance

COVID-19 Relief: Customers are urged to contact State Farm via mobile app, phone, or local agent to discuss any financial difficulties related to COVID-19.

State Farm Discounts

State Farm offers fewer discounts compared with other companies on this list. Still, customers may be able to save on premiums with these discounts:

State Farm Coverage Options

In addition to standard home insurance coverage options, State Farm offers coverage for:

  • Expanded replacement cost
  • Inflation protection
  • Water backup
  • Scheduled personal property
  • Equipment breakdown coverage (for heating, electrical, and other major home systems)
  • Energy efficiency upgrades (to help pay for green replacements)
  • Identity theft

AARP Homeowners Insurance—The Hartford: Best for Seniors

The Hartford

Founded more than two centuries ago, the Hartford has the distinction of having insured Abraham Lincoln’s home—for a consideration of $24. The company has also been the AARP’s direct insurance for home and auto since 1984. AARP members can take advantage of savings and credits to lower home insurance rates.

Pros
  • An online quote system that automatically fills in home data based on address

  • Discounts for seniors through AARP program

  • Upgraded packages

Cons
  • Loss of use coverage potentially capped

  • Online quotes not available in all states

COVID-19 Relief: The Hartford waived late payment fees and cancellations for nonpayment through May 31, 2020. If you need further help, contact a Hartford representative.

The Hartford Discounts

  • Save up to 5% on your car insurance and 20% on your home insurance when you bundle
  • Discounts for deadbolts, smoke detectors, and other home security devices
  • Renewal credit when you renew your home policy for four years
  • Retiree credit if you and your spouse are retired or work less than 24 hours a week

The Hartford Coverage Options

The Hartford offers standard home insurance coverage options, plus two optional packages that combine extra coverages into a ready-to-buy policy:

  1. Home Advantage Package (enhances the typical base policy with Identity Fraud Expense coverage, “new for old” actual cost replacement, reimbursement for lock replacement, and personal injury liability protection)
  2. Home Advantage Plus Package (includes all the Home Advantage options plus equipment breakdown coverage, a disappearing deductible, and blanket coverage for valuable items)

The company also offers stand-alone options to increase coverage:

  • Replacement Plus (to help with sustainability minded in-home upgrades)
  • Green Rebuilding (to increase policy limits by up to 10% when you choose green materials)
  • Water Backup (also sump pump overflow)
  • Assisted Living Care Coverage (extends your home insurance coverage to a relative who lives in an assisted living care facility)
  • Scheduled Personal Property
  • Identity Theft

USAA: Best for Military Families

USAA

USAA is available only to military families and veterans. With an excellent reputation for customer satisfaction and financial stability, it’s our top option for military families.

Pros
  • High customer satisfaction

  • Excellent financial stability

  • One-stop shopping for insurance, banking, and investing products

Pros
  • Only available to active military members, veterans, and their families

  • No local agents available

COVID-19 relief: USAA won’t cancel your policy or charge you fees if you make late payments on your auto and home insurance through June 17, 2020. Special payment arrangements are available to help members experiencing financial difficulties.

USAA Discounts

USAA members have access to many discounts, from flowers and shipping to tax filing and car buying. Specific to home insurance, USAA members can take advantage of these discounts:

  • Save up to 10% when you bundle property and auto insurance
  • Save up to 10% if you’re claim free for five years
  • Protective Device Credit and special savings with ADT home security systems

USAA Coverage Options

Standard USAA policies cover you for fire, theft, vandalism, most weather-related events, liability, and identity theft. You’re also covered for loss due to a covered peril of military uniforms or equipment you own if the loss occurs while you’re on active or reserve duty (with no deductible). Additional coverage options include:

  • Flood insurance
  • Earthquake coverage
  • Valuable personal property
  • Home-sharing coverage (if you rent out a room or your entire house)

How Can You Get Cheap Homeowners Insurance?

Homeowners insurance is an ongoing monthly expense, so it pays to find ways to bring down the cost while still having a decent policy. The good news is that there are plenty of ways to lower your home insurance costs. Here are some options:

  1. Shop around. Rates vary widely and so do discounts. Research different companies to find the right balance between cost and coverage.
  2. Raise your deductible. The higher your deductible, the more you can save on premiums. When you get a quote, the default deductible may be as low as $500, but you could save as much as 25% if you bump the deductible up to $1,000, says the Insurance Information Institute.
  3. Don’t confuse rebuilding costs and your home’s purchase price. When you bought your house, part of what you paid for was the land, which isn’t at risk from theft, storms, and other perils. Don’t include your land’s value when you decide how much insurance to buy.
  4. Bundle your insurance policies. Most insurance companies offer a discount if you bundle two or more policies.
  5. Improve your home security. Most insurance companies offer a discount if you have deadbolts, a home alarm system that notifies the police or fire department, or a sprinkler system.
  6. Improve your credit score. You may be eligible for lower rates if you have a good credit score.
  7. Ask about other discounts. Some companies offer discounts based on age, profession, and your claims history. 
  8. Review your coverage every year. Make changes or additions to your policy, if needed, and make sure you receive all available discounts

How Much Should You Pay for Homeowners Insurance?

The average home insurance premium for owner-occupied homes is $1,211, according to 2019 data from the National Association of Insurance Commissioners (NAIC).

Your cost will depend on a variety of factors, including:

  • Where you live
  • Your home’s value, size, features, and condition
  • The value of your personal belongings
  • The cost to rebuild your home
  • Coverage limits and deductible
  • Past home insurance claims
  • Marital status
  • Credit score
  • If you have a dog that’s considered risky

What Does Homeowners Insurance Cover?

Standard homeowners insurance typically provides these four types of coverage:

  1. Dwelling protection—This covers your home’s structure: the foundation, walls, and roof, and other structures such as a garage or deck.
  2. Other structure protectionThis applies to detached buildings, such as a separate garage, pool house, or shed.
  3. Personal property protectionThis covers the personal belongings you keep inside your home.
  4. Liability protectionThis kicks in if someone who doesn’t live with you is injured while on your property.

With any company you can adjust your coverage limits and deductible, which will change the amount you pay for coverage. Most home insurance companies give you the option to add extra coverage for things such as water backup and identify theft.

Is it Cheaper to Bundle Home and Auto Insurance?

In most cases you can save money if you buy your auto and home policies from the same company. While bundle discounts vary by company, they generally range between 5% and 25% for each policy. Still, your total costs may be lower if you buy insurance from two different companies. Be sure to shop around for the coverage and rates that work best for you.

The Bottom Line

If you’re a homeowner, you’ll want a good home insurance policy to protect what’s likely your biggest investment. Be sure to shop around and compare at least three companies to find the coverage you want at a price you can afford.

Methodology

To determine the top cheap home insurance companies, we considered several factors, including financial strength. To do so, we turned to data from A.M. Best, the oldest credit rating agency in the world. Using its Financial Strength Rating (FSR) Scale, we researched the financial stability of each company and only considered those with an A, A+, or A++ rating.

We also looked at customer satisfaction. To narrow the field, we looked at results from the J.D. Power 2020 U.S. Property Claims Satisfaction Study. We only considered companies that earned at least three out of five stars on its Power Circle ratings, and at least 876 out of 1,000 on its Overall Customer Satisfaction Index Ranking.

We also considered reputation using ratings from the Better Business Bureau. We eliminated companies that had a rating lower than a B+. Finally, we looked at grades from Consumer Reports as one last check. The companies that made our list scored an 82 or higher on its 2019 report, the most recent available.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy .
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