December 2, 2023

Car Auto Finance

Car Auto Finance FOR Everyone

7 Best Homeowners Insurance Companies of September 2023

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer

Homeowners insurance pays to repair or rebuild your home and replace its contents if they’re damaged by specific perils like fire, theft or a weather event such as wind or lightning.

If you’re not familiar with home insurance coverage and its policies, you might end up paying more than you should for inadequate coverage. To help you find the best homeowners insurance policy for you, here are the seven best home insurance companies of 2023.

Our Top Picks for the Best Homeowners Insurance

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
  • Unusually fast quotes and claims payments
  • Unused claims money is paid to a non-profit of your choice
  • Flat fee for administration, in addition to low monthly premiums
  • Demotech Financial Stability Rating: A
  • Not available in all 50 states
  • Financial strength hasn’t been rated by A.M. Best
  • Auto insurance only available in three states, which limits bundling options


Financial rating:
A on Demotech
Bundling; with ‘Get Discounts Now’ program, homeowners could save on premiums by updating their home’s status regarding renovations, security systems and more
Bundle options:
Renters, car, pet and life insurance

Why we chose Lemonade: Lemonade’s streamlined online services and use of AI make the process of getting quotes and filing claims easier and faster.

Lemonade Insurance is an online-only insurance company that uses artificial intelligence to provide notably fast home insurance quotes and claim payments. The company can provide a quote in a few minutes — you simply fill out a form on its website and choose the coverage amount you want.

It’s also just as easy to file claims: you just press the claim button in the app and proceed to fill out any necessary information. The use of AI also makes this claims process unusually quick, with many reimbursements paid in a matter of minutes, the company says.

Lemonade also has unique and appealing approaches to paying for its operations and using company profits. Its operations are funded, at least in part, through a flat fee that’s added to the policy’s premium. Then, through its Lemonade Giveback program, it will donate up to 40% of premiums that haven’t been used to pay out claims to a non-profit organization of your choice.

Lemonade also offers a Standard selection of coverage options, including:

  • Dwelling coverage
  • Other structures coverage
  • Personal property coverage
  • Personal liability
  • Medical payments
  • Loss of use

Although Lemonade says it plans to expand its operations to more states and other countries, as of right now, Lemonade is only available in 23 states and D.C. In addition to that, not all of its policies are available in those states either — auto insurance, for example, is only available in three states. This lack of availability could potentially limit your bundling options depending on where you live.

Read full review>>

  • Obtain an online quote in 60 seconds and purchase in as little as 5 minutes
  • Ample coverage for electronics and office supplies
  • Get discounts for using Hippo’s free Smart Home System
  • Home-Care Expert program offers referrals to contractors and other providers
  • Discounts are available for homes with access to digital and smart systems
  • Coverage is not available nationwide


Financial rating:
A- on A.M. Best
Smart home, three or five years loss-free, recent homebuyer, theft protection devices, getting Hippo through certain qualifying providers, hail resistant roof, HOA, bundling
Bundling options:

Why we chose Hippo: Hippo’s use of technology both for customer service and improved home security makes them a top choice for tech-savvy homeowners.

Hippo allows customers to complete the quote process entirely online and get a quote in as fast as a minute, and receive a policy in as little as five minutes, the company claims.

Hippo also provides a smart home discount if you agree to install and use a free smart home monitoring system. There are several levels of kit, with escalating arrays of equipment.

The company claims customers save an average of $64/year if they install the plain self-monitoring kit — which includes smoke, CO2 and water-leak detectors — and $91/year when opting for the pro monitoring kit, which adds 24/7 monitoring and emergency dispatch services.

Hippo’s standard policy includes up to $10,000 in coverage for computers and home office equipment, much higher than most policies include for electronics. If you have a home business or a remote working job, this is certainly something to consider.

It also offers a HomeCare Expert program that provides professional service recommendations, via phone, to policyholders who need repairs or maintenance.

In addition to standard home insurance coverage, Hippo can cover:

  • Computers and home office equipment
  • Appliances and electronics
  • Smart home upgrades
  • House cleaners and sitters
  • Water backup
  • Service line protection
  • Enhanced rebuilding
  • Full replacement costs
  • Costs for local ordinance changes

Read full review>>

  • Guaranteed Replacement Cost coverage standard with all policies
  • Many add-ons include liability coverage, home-sharing coverage, identity recovery and service line protection
  • J.D. Power Ranking: #7 out of 19

  • A.M. Best Rating: A+
  • Only available in 12 states
  • Not as many discounts as competitors


Financial rating:
A+ on A.M. Best
Bundling, smoke alarm, burglary alert, automatic sprinkler system, advance quote
Bundling options:

Why we chose Erie: Erie’s standard policy includes guaranteed replacement cost and an array of add-on’s that usually cost extra — all valuable additions to an already solid insurance package.

Erie Insurance is one of the country’s top insurers when it comes to customer service and claims satisfaction. It consistently ranked in the top five in the J.D. Power Customer Satisfaction and Claim Satisfaction studies from 2018 to 2021 (although it dropped to 7th in 2022).

The company is also among a handful of homeowners insurance companies that include Guaranteed Replacement Cost coverage as part of its standard coverage. This allows homeowners to rebuild their home the way it was before the incident, rather than receiving a depreciated amount due to the home’s age.

Its policy includes roof damage coverage as well, although full replacement does cost extra.

Although it comes up a little short discount-wise when compared to competitors, Erie does offer a 16% to 25% bundling discount and additional discounts if you install automatic sprinklers, smoke detectors, and burglar alarms.

The company is among the few insurers — along with Allstate and USAA — to offer, at additional cost, home-sharing coverage as an alternative to buying such insurance through AirBnB or Vrbo. As a rule, damage from paying guests is not covered under standard homeowners insurance.

Its biggest downside is its lack of availability. Erie only operates in 12 states and D.C., making it one of the most limited companies in our list.

Erie’s base policy also covers these other items, which cost extra with many other companies:

  • Valuables and hard-to-replace items
  • Gift card and gift certificates
  • Animals, birds, and fish
  • Cash and precious metals

You can also add the following coverage to any Erie policy:

  • Water backup and sump overflow
  • Personal liability coverage
  • Identity recovery services
  • Service line protection

Read full review>>

  • Available in 49 states and Washington, D.C.
  • J.D. Power Ranking: #6 out of 19

  • Partnered with Wildfire Defense Systems to provide free fire prevention and risk management
  • Big variety of coverage types, great for bundling discounts
  • Fewer discounts than other large insurers
  • Only accessible through exclusive State Farm agents
  • No longer accepting applications from California residents


Financial rating:
A++ on A.M. Best
Bundling, home security systems, resistant roofing
Bundling options:
Auto, renters, life

Why we chose State Farm: State Farm home insurance offers a wide variety of policies in 49 out of 50 states and is among the highest ranked nationwide insurers in J.D. Power’s consumer satisfaction survey.

State Farm is the largest home insurance company in the United States. Its homeowners insurance policies are available in 49 states and Washington, D.C. (It’s no longer accepting new applications in California). The company offers a wide variety of policies, from life to car to condo

This gives customers the chance to bundle in a variety of ways and not only get discounts, but get a more streamlined experience overall.

Keep in mind, however, that although State Farm offers a wide variety of policies, only car, condo, life and renters can be bundled. Despite this limitation, the savings it does provide can be substantial. State Farm claims the yearly savings could go up to $1,127 when combining home and auto, for example.

The company scores highly in customer service, according to J.D. Power — in fact, it’s the highest-ranking nationwide company, currently in 6th place in the Overall Homr Insurance Customer Satisfaction Study.

However, unlike other large insurers in the country, State Farm offers few discounts. These include the traditional multi-policy discount and discounts if you have security systems such as fire and smoke alarms. (Some safety measures might or might not qualify depending on the state, so be sure to check with an agent.) There’s also a discount for using high-quality roofing protection.

Another drawback to State Farm is that it only works through exclusive agents. However, it does have an extensive network of agents — close to 19,000 by some estimates — that cover almost every state. Unfortunately, as of May 27th, 2023, State Farm will no longer accept applicants from California, but will continue to serve existing customers.

  • Offers database listing vetted and licensed contractors
  • Discounts for claims-free customers
  • J.D. Power Ranking: #1 out of 19
  • A.M. Best Rating: A+


Financial rating:
A+ on A.M. Best
Bundling, loyalty, claim-free, autopay, electronic bill, alarm system, detection devices
Bundling options:
Auto, renters, life, umbrella

Why we chose Amica Mutual: Amica Mutual’s customer service is, arguably, the best out there, and its comprehensive contractor database can streamline the process of finding the help you need.

Amica Mutual stands out for customer service on claims, having topped the J.D. Power Property Claims Satisfaction Study for nine consecutive years, as well as the Overall Customer Satisfaction survey.

Another standout aspect to the company is its Contractor Connection database, which lists thousands of vetted, licensed and insured contractors and guarantees their work with a five-year warranty.

Like many insurers, Amica also offers loyalty discounts, in its case to customers who have been with the company for at least two years. It also offers breaks to those who are claim-free for at least three years.

Unfortunately, Amica Mutual is not currently offering homeowners insurance in Alaska or Hawaii, but it is available in every other state.

For customers who require additional coverage, Amica offers:

  • Valuable items coverage
  • Catastrophic coverages
  • Identity fraud expense coverage
  • Home business coverage

Read full review>>

  • 10% bundling discount when paired with car insurance policy
  • Home Sharing coverage available
  • A.M. Best Rating: A++
  • Only available to military personnel and their families
  • Home Sharing is not available in all 50 states


Financial rating:
A++ on A.M. Best
Bundling, protection devices, detection devices, multi-product (bundling with auto earns 10% discount, additional policies earn 5% discount), loyalty, claim-free
Bundling options:

Why we chose USAA: For those who qualify, USAA has a great combination of low premiums and wide coverage, along with outstanding trustworthiness and financial stability.

USAA is a highly rated insurance provider — for both financial stability and customer service (although its limited availability means it is not included in J.D. Power’s customer satisfaction rankings). It offers many different coverage options for military members and their families (including the children of veterans and those who are serving).

USAA is also among a handful of homeowners insurance companies that include Guaranteed Replacement Cost coverage as standard, which allows homeowners to rebuild their home the way it was before an incident, rather than receiving a depreciated amount due to the home’s age.

The company is also known for its low premiums. If you qualify for membership in USAA, it would be hard to find better home insurance rates and coverage for property damage.

The company is one of the few — along with Erie and Allstate — to offer, at additional cost, home-sharing coverage as an alternative to buying such insurance through Airbnb or Vrbo. As a rule, damage from paying guests is not covered under a standard homeowners insurance policy.

Read full review>>

  • Coverage for homes up to $100 million
  • Robust cybersecurity coverage
  • Coverage for properties outside the United States
  • Lower premium average than high-end competitors
  • Low customer service ratings
  • Customers have to buy more than one policy with the company
  • No homeowners insurance coverage in California


Financial rating:
A on A.M. Best
Bundling options:

Why we chose AIG: AIG provides comprehensive coverage for high-value properties worth up to $100 million.

AIG is known as a luxury insurer that provides high net-worth individuals with comprehensive coverage, from dwelling to cybersecurity.

It offers guaranteed replacement cost (without any limits, according to the company) for homes valued from $750,000 all the way up to $100 million on an “all-risk” basis — meaning its policy covers all perils except the few specifically excluded.

It also offers the option of ultra-high deductibles (up to $100,000). This could help significantly lower your premium — however, you’ll also pay a lot more out of pocket.

You must have one of the company’s other policies to get homeowners insurance with AIG, but the company has a wide array of policies aimed at high net-worth customers to choose from — including collection insurance, yacht insurance, auto insurance and even private aircraft insurance.

You can also find services that will help you prevent accidents or take care of them quicker. The insurer provides background check services for domestic staff, private firefighting units, cybersecurity measures and more.

Since January 31st of this year, however, AIG has stopped providing home insurance coverage in California due to the high risk of wildfires and the state’s regular seismic activity. Other insurance policies will still be in effect, though.

In addition to standard coverage, AIG offers services such as:

  • Kidnap, ransom and extortion coverage
  • Landscaping coverage
  • Crisis management and reputation restoration
  • Multinational property coverage
  • Business property coverage

Read full review>>

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer

Other homeowners insurance companies we considered

As we analyzed home insurance companies, we focused on financial stability and strong customer satisfaction ratings, in addition to the variety of coverage options each company offered.

The insurance providers we selected excelled in all of these categories, but the following carriers fell a bit short when it came to most homeowners’ needs.

However, read on to see if one of these companies might fit your specific needs.


  • HostAdvantage add-on available for home-sharing or renting
  • A.M. Best Rating: A+
  • Discounts for paying on time
  • J.D. Power Ranking: #11 out of 19
  • HostAdvantage feature is not available everywhere

Allstate provides discounts to homeowners who take good care of their property, pay on time and are claim-free. There are also discounts for loyalty, setting up AutoPay and renewing before your policy expires.

Why it didn’t make the cut: Allstate didn’t make our list because it fell slightly short in customer satisfaction and overall features when compared to competitors, and recently announced that it will no longer accept applicants from the state of California.

Read full review>>


  • Notion smart kit helps detect water leaks and qualifies users for additional discounts
  • Valuables Plus and Brand New Belongings add-ons help better protect your possessions
  • Basic policy might cover new city building codes after a disaster
  • J.D. Power Ranking: #10 out of 19

Nationwide offers home insurance in 46 states and Washington D.C. and provides a wide range of coverage options and discounts.

Why it didn’t make the cut: It fell a hair short of its competitors due to a below average score on the most recent customer satisfaction J.D. Power Rankings.

American Family

  • Lower than average premiums
  • Uncommon standard coverage such as sewer backup damage
  • Generous discounts for bundling and for new and renovated homes
  • J.D. Power Ranking: #2 out of 19
  • Only available in 19 states

American Family offers comprehensive coverage and discounts, and its customer satisfaction ratings went up significantly in 2022.

Why it didn’t make the cut: Its limited availability (only 19 states) kept it out of our main list.

Country Financial

  • Great A+ AM Best rating
  • Farm coverage for hay, grain, livestock, machinery accidents and more
  • Various security and renovation-related discounts
  • J.D. Power Ranking: #5 out of 19
  • Only available in 19 states

Honoring its name, Country Financial is a great option for customers who live in rural areas and, specifically, farmers.

Why it didn’t make the cut: Unfortunately, there isn’t much publicly available information on its property claim satisfaction rates, and it’s only available in 19 states.

Liberty Mutual

  • Wide array of discounts for online purchases, new homes and more
  • Comprehensive mobile app
  • Customizable policies and add-on options
  • High number of complaints with the NAIC
  • J.D. Power Ranking: #14 out of 19

Over a century old, Liberty Mutual offers one of the best apps out of any insurer and multiple discounts.

Why it didn’t make the cut: A high number of complaints with the National Association of Insurance Commissioners (NAIC) kept them out of our main list.

Travelers Group

  • Add-ons include coverage for identity fraud, green home and water backup
  • Discounts for homeowners with security systems
  • Higher prices than competitors for policy limits above $75,000
  • J.D. Power Ranking: #17 out of 19

Travelers Group rewards you with discounts for a wide variety of maintenance and security measures — from having a sprinkler system to installing security cameras.

Why it didn’t make the cut: Its low ranking in the J.D. Power Satisfaction Study and higher premiums then competitors kept it out of our top picks.


  • Masterpiece homeowners policy covers high-value (worth more than $1M) properties
  • Coverage for traumatic experiences such as child abduction and home invasions
  • Excellent A++ AM Best Rating
  • More expensive than average, focuses more on high-end customers
  • Only sells through local agents
  • J.D. Power Ranking: #12 out of 19

Chubb’s coverage for high-net-worth customers is top notch, and includes a long list of add-ons and policies you can pair with your home coverage.

Why it didn’t make the cut: However, its high price and low ranking in consumer satisfaction studies eliminated it from our list.


  • HomeQuote Explorer® tool allows you to compare quotes by many companies
  • Progressive’s network of insurers provides a certain level of flexibility when choosing a policy
  • Wide array of discounts include bundling, going paperless and insuring newly constructed homes
  • Progressive itself only insures some policies, so those from third parties can vary significantly

Progressive is one of the country’s largest insurance companies and, as such, might be one of the first names that come to mind.

Why it didn’t make the cut: It doesn’t underwrite its own home insurance policies — instead, it uses an independent network of companies to underwrite the policies.


  • Handles claims quickly
  • Demotech rating of A
  • Discount of up to 15.5% when customers use SimpliSafe security systems
  • Low customer satisfaction ratings on the Better Business Bureau

  • Unranked in the JD Power Ranking

Branch is a fast-growing insurtech company that has been expanding its array of services and discounts in the past six years.

Why it didn’t make the cut: However, the young company’s absence in the JD Power Ranking and its low number of customer reviews left it out of our top list for now.

Homeowners Insurance Guide

While every homeowners insurance policy is unique, there are several factors that they all have in common. These are important to understand when you’re trying to find the right policy.

Read on to learn more about how homeowners insurance works and how to choose the coverage you really need.

What is homeowners insurance?

Homeowners insurance coverage is a type of property insurance that provides financial compensation if your home is damaged by certain natural disasters, theft and/or accidents. This type of insurance does not cover flooding or earthquakes, which require a different type of coverage.

Additionally, it’s important to keep in mind that home insurance is often required by mortgage lenders when you’re financing a new home.

How to choose the best homeowners insurance

There’s a few factors to consider when you’re trying to choose the best homeowners insurance. You’ll have to consider price, your living situation, its specific policy offerings and more. Here are some steps to take before making your decision:

Learn about coverage types

Home insurance policies vary widely in terms of coverage.

A basic policy will usually cover your dwelling (main residential structure), personal belongings, other structures (tool sheds, fences, etc.), personal liability and additional living expenses for when you need to stay outside your home while it’s being repaired.

Keep reading our guide to get more detail on what is and isn’t covered depending on the policy, and what you can do to get the best coverage possible.

Assess your home insurance needs

It’s important for you to know what you need in terms of coverage. Take into account the area where you live: is it prone to flooding? Do you live somewhere like Florida or California, where natural disasters are a frequent concern? If so, you might need additional coverage or an additional policy, so keep that in mind when looking at insurers’ offerings.

Other situations that might call for additional coverage include living in a historical building or if you made recent, expensive renovations. In these cases, you might need a policy that offers guaranteed replacement cost so you can rebuild your home as close to its previous state as possible.

It’s also important to make an inventory of your belongings and invest in additional coverage for precious items such as statues, jewelry or any other collectibles. While most policies cover personal belongings, there’s a limit, and high-value items such as these won’t be covered entirely.

Understanding your situation can help you save a lot of money in the long run, by both choosing a well-thought-out package that costs less year after year, as well as getting most of your expenses covered in the case of an emergency.

Find the best homeowners insurance companies in your state

While most companies operate in several states, only a handful work throughout the entire United States. Your first goal should be to find the insurers, both national and local, that work in your state. Then, look for the coverage they offer, look for their financial strength, customer complaints and so on.

You can find insurers in your state or county through your local government’s insurance department — their contacts can be found on the pages of the National Association of Insurance Commissioners (NAIC) or the Insurance Information Institute.

Additional home insurance expenses to keep in mind

Depending on your living situation, standard insurance products might not be enough.

When you’re ready to choose a homeowners insurance policy, see what types of endorsements — also known as insurance riders or add-ons — each company offers. These will increase your annual premium, but it might be worth it if it means protecting valuable assets such as jewelry or collectibles.

With certain companies, you can also get protection for more specific issues such as water damage, cybersecurity threats and even kidnapping.

Bundle auto and home insurance

One of the most common discounts among insurance companies is the multi-policy discount or bundle. In some cases, this could save you over $1,000 a year. While there are companies that let you bundle more than two types of policies, including life insurance and even pet insurance, the most common is auto and home insurance bundles.

Being, arguably, the two most common and important insurance policies — auto insurance is a legal requirement in most states — bundling both is common practice, and should be an important factor when choosing an insurer.

If auto insurance is a big priority, you can look at our best car insurance list to see how auto insurance policies stack up. However, you can also check out the best home and auto insurance bundles for the top bundling companies.

Homeowners Insurance Company Potential Savings by Bundling Home and Auto
Lemonade Undisclosed
Hippo Undisclosed
Erie 16% to 25%
State Farm Up to $1,073
Amica Up to 30%
USAA Up to 10%
AIG Up to 20%

* The discounts listed above are as advertised on each insurer’s website. Contact the insurance company directly to get a quote and a more accurate estimate of potential savings.

Additional homeowners insurance discounts

When shopping for the best homeowners insurance, you should make it a point to ask about discounts on your insurance premium and save money on your policy.

Each company has options to help you reduce your insurance costs. The following are the most common home insurance discounts:

  • Automatic payment discount: Set up automatic payments from your bank account or credit card.
  • Paperless discount: Receive your statements electronically.
  • Advance payment discount: Pay the entire amount of your annual policy at once instead of on a monthly basis.
  • Claims-free discount: You could save if you go accident-free (that is, you don’t file any claims) within a certain amount of time — usually three to five years.
  • Protective devices discount: Install a burglar alarm, surveillance system, sprinkler system, water shut-off system or smoke alarms to help prevent losses.

What does homeowners insurance cover?

There are several levels of homeowners insurance coverage and policies. Which one is right for you will depend on the type of coverage you need.

Many insurance companies offer customizable coverage as part of their homeowners insurance policy. For example, depending on the insurer, you could add identity theft protection and work-related damage coverage to your policy.

However, this is what home insurance covers with most standard policies:

Dwelling coverage: This covers the main structure of the property — namely, the actual house — from ten basic perils: fire, lightning, hail, windstorms, explosions, civil unrest, aircraft damage, vehicle damage, smoke damage, vandalism, theft and volcano eruption.

Personal belongings coverage: Standard insurance will typically cover personal belongings up to a certain percentage of your overall home insurance coverage. This percentage will vary from policy to policy. An add-on is recommended if homeowners want to cover valuable items such as jewelry, art collections and other particularly valuable items.

Personal liability: Liability protection covers injuries suffered by non-residents of your household while in your property. It could cover medical and legal costs, depending on the specific policy.

Other structures: This covers detached structures such as fences, gazebos or tool sheds affected by covered perils.

Additional living expenses (ALE): Most homeowners insurance policies cover the cost of having to live in a hotel or rental while your home is repaired. Its limits depend on your specific policy.

What does homeowners insurance not cover?

Home insurance policies almost never include coverage for the perils listed in the table below:

infographic on the perils excluded from homeowners insurance

Weather-related coverage exclusions

While most home insurance policies cover some weather-related perils such as hail and windstorms, there are many natural disasters that will not be covered by most homeowners’ policies. Here are the main ones you should keep in mind.

Flooding: If your area is deemed high-risk by the Federal Emergency Management Agency (FEMA), you’ll be required to purchase flood insurance for your property as an add-on to your policy.

The National Flood Insurance Program (NFIP) provides flood insurance for property owners, renters, and businesses and is available for anyone living in one of the 23,000 participating NFIP communities. For more information about what’s covered and how to purchase flood insurance, visit

When it comes to water damage, coverage will depend on the cause. If the source of the damage is flooding, only flood insurance will cover it; if the damage is caused by a peril mentioned in your homeowners’ insurance policy (such as a car crashing into your home and breaking water pipes), it might very well be covered, although subject to investigation.

Hail and wind: Depending on where you live, there may be additional weather-related exclusions. For example, homeowners’ insurance policies issued for coastal homes in Texas don’t cover wind or hail damage.

Also, home insurance policies in the Eastern coastal states have what’s called hurricane and windstorm deductibles. Whether you live in Florida or New York, if your house is hit by a storm, the deductible you pay won’t be the fixed amount you agreed upon for the other perils. It will be a percentage based on the coverage you chose. This is mostly regulated by state laws — to read more about your specific state, check out the Insurance Information Institute.

Earthquakes: Earthquake damage is not typically covered by any home insurance policy, and is only added through a rider or by buying a separate policy. In a place like California — probably the most prone to seismic activity in the United States — it’s important to add a rider or get a policy to cover in the case of a loss. Checking with the largest earthquake insurer in the state, the California Earthquake Authority, is a good start.

Power outages: Depending on your home insurance policy, some items — such as spoiled food or frozen pipes — may not be covered in the event of a short or prolonged power outage. However, it’s not as clear cut as floods or earthquakes, so make sure to check directly with your insurer beforehand to see what’s covered and what’s not.

In the meantime, protect your appliances with surge protectors and check if your refrigerator protection plan is still valid, which can cover the loss of food.

Wildfires: Most home insurance policies tend to cover damages caused by wildfires. However, in places with higher risk of wildfires, some companies stopped offering this type of coverage altogether or made adjustments involving this specific peril.

Check your locally available insurance companies to see if they still offer those types of policies in your location, or if wildfires can be covered by a rider you can add to your plan. You can also check with your state’s FAIR Plan, such as California’s, to get fire insurance in case companies don’t want to cover your home.

Types of homeowners insurance

There are several types of homeowners insurance policies. They start at H01, which is the most basic policy covering only ten perils: fire, lighting, hail, windstorms, explosions, civil unrest, aircraft damage, vehicle damage, smoke, vandalism, theft and volcano eruptions.

Others cover more perils and/or are specialized, such as the H04, which is renter’s insurance and the H07, which covers mobile homes (not to be confused with RV insurance).

Keep in mind, however, that these are customizable as most insurers offer insurance riders depending on a homeowner’s specific needs. To learn more about the types of homeowners insurance, read our guide on what is homeowners insurance and how it works.

H01 The most basic, bare-bones policy. It only covers damage inflicted by these 10 perils: Fire, lighting, hail, windstorms, explosions, civil unrest, aircraft damage, vehicle damage, smoke, vandalism, theft, volcano eruption
H02 A step up in coverage from H01. It covers the ten basic perils plus six more which include: Falling objects, snow, water discharge (not flooding), sudden cracking, bulging or burning of a built-in appliance, accidental damage from electrical currents and freezing
H03 The most popular policy. It covers all perils except for floods and earthquakes. If you’re unsure about whether you need flood coverage in addition to your homeowners policy, take a look at our guide to flood insurance.
H04 This is renter’s insurance, which of course doesn’t apply to homeowners. However, if you’re looking for this type of insurance, make sure to check out our reviews on the best renter’s insurance companies.
H05 The highest level of coverage. It covers most perils, the structure, and your personal belongings at replacement cost regardless of rebuilding cost or which included peril caused the damage.
H06 This covers condos. While condo structures and common areas are generally covered by homeowners’ associations, with an H06 you can cover your belongings and the inside of your home.
H07 This coverage is for mobile homes or manufactured homes, meaning homes built elsewhere and moved or brought into a land plot after manufacture.
It’s not to be confused with RV insurance, which is a type of automobile insurance. (If you have an RV, make sure to check out the best RV insurance companies).
H08 The most limited form of coverage, but often the only one available for low-value, older homes. It’s not available in all states and it only offers actual cash value reimbursement (which takes into account depreciation).

How much does home insurance cost?

While national average rates are around $100 a month (or a $1,200 yearly average premium), there isn’t a single established price for home insurance. Premiums will vary from company to company, but will also depend on your house and neighborhood. Here are some of the most common factors that can impact how much you pay for insurance.

Factors that impact your homeowners insurance premium

From the coverage amount you select to your claims history, insurance companies take into account several different factors when determining your homeowners insurance premium. Each of these reflect the risk associated with insuring your property.

Factors that impact your insurance premium

Coverage amount needed: How much coverage you choose to buy will obviously have the greatest impact on your monthly or annual premium. This means the overall cap the insurer agrees to cover in the case of an included peril. You don’t need to cover the entire cost of your house, but you should aim to cover at least 80% of the value.

Location of your home: The location of your house determines the type of perils it could be exposed to and so this will greatly impact the rate an insurance company offers you. For example, a house in a storm-prone zone will be more expensive to insure than one that isn’t.

Style and age of the home: The overall build and condition of the house is taken into account in order to adjust the premium. If a house is fairly deteriorated or built with outdated materials, for example, its structure is at a higher risk, thus raising the price on coverage.

Square footage: No surprise here: the size of your home is used to calculate your premium. Larger homes will inevitably need more resources to fix or rebuild, and are also more prone to neglect in certain areas.

Credit score: Like many other payments, loans and services, credit score plays a role in calculating your premium when getting a homeowners insurance quote. Insurers use this as a way to measure your credibility in maintaining your house.

Claims history: Insurers take into account your claims and loss history when calculating your homeowners insurance premium. If you are perceived to be at a higher risk of filing claims due to an unfavorable loss history, you’ll be charged accordingly. Insurance companies will also look at claims filed for your home, even before you started living there. Claims that may lead to more expensive losses down the road, such as those for water damage, may affect you more.

How to file a home insurance claim

While each insurer will have its own claim-filing process, there are aspects of the process that are the same across the board.

1. File a police report

If your claim is the result of a criminal act, the first thing you’ll want to do is file a police report. This will provide you with evidence for the insurer (many insurers will want to see the police report before paying a claim) and can help you in the process of recovering stolen property.

2. Contact your insurer

Contact your insurer as quickly as possible and ask all the necessary questions. Whatever doubt you have, ask it, and provide your insurance provider with all the required information. Your insurance company will send a form for you to fill out; do that promptly.

3. Document everything

As a precaution, you should already have pictures of your home and a list of your most valuable possessions in case anything were to happen. When it does, take pictures of all the damage and missing items, and write them down for when an inspection takes place in order to avoid forgetting anything.

4. Keep the receipts

In case you need to take care of urgent repairs or find accommodations elsewhere, other than documenting the damage, keep the receipts so that your insurance provider can reimburse you later on, given the damage and additional living expenses are covered.

How are homeowners insurance claims paid?

In most cases, an adjuster will inspect the damage to your home and offer you a certain amount of money for repairs, based on the terms of your policy. The insurance company will then typically send an advance, before sending the final payment. In fact, you may get multiple checks as you make temporary payments, permanent repairs and replace damaged belongings.

What is the 80% rule in homeowners insurance?

Most insurers abide by the 80% rule, which states that they will only reimburse you the full amount of damages if you buy coverage worth at least 80% of the property’s value. If you buy coverage for less than 80% of your home’s value, the insurer will pay you only a percentage of the damages incurred.

Let’s say your home is valued at $500,000 and you buy coverage for $400,000 (80% of your home’s value). If you suffer $100,000 in covered damages, your insurer will likely pay for the full amount, minus your deductible.

If you bought coverage for $300,000, however, the insurer will not pay the full amount of damages. Instead, it will pay you the greater amount of the two following options:

The actual cash value of the building or part of the home that was destroyed, which includes depreciation, or

Based on the proportion of coverage you did buy compared to the coverage you should have bought.

So, in this example, the insurer will divide the $300,000 coverage you did buy by the $400,000 you should have bought and pay a corresponding percentage of the damages. As a result, if you suffer a $100,000 loss, your insurer will end up reimbursing you 75% of that amount, minus the deductible you chose when you bought the policy.

It’s worth noting, however, that even a policy that covers 100% of your home’s value isn’t a guarantee that an insurer will pay the full amount needed to repair your home. If, for example, there’s a fire and the cost to demolish the structure is higher than what the policy covers, you’ll have to cover the difference.

Make sure to read your policy carefully and consult with an agent if you have questions about how much coverage to get.

Cash value vs. replacement cost

Policies vary widely in how (and how much) they’ll pay for your damages. Depending on the policy you choose, you’ll get actual cash value, replacement cost or guaranteed replacement cost:

Actual cash value Replacement cost Guaranteed replacement cost
Pays according to the current value of your home, including depreciation Covers the amount needed to rebuild your home as close as possible to how it was before Your dwelling will be repaired or even rebuilt to its original state regardless of how much it costs to do so
You’ll only receive an amount equivalent to your property’s value at the time it was lost Significantly more expensive than actual cash value coverage Included in some standard policies, but mostly available as an add-on

Latest News on Homeowners Insurance

  • If you don’t know what to look for when buying a home, our guide can help you navigate the process. There are several factors to consider, many of which could save you money in the long run, both in home insurance premiums and in future repairs.

Homeowners Insurance FAQ

How much is homeowners insurance?

The average cost of homeowners insurance in the US is $1,200 per year, or $100 per month, for a single policy. However, homeowners’ insurance rates vary substantially depending on your home’s specific situation, condition, how much coverage you want, and where you live.

Is homeowners insurance required?

Homeowners insurance is not required by state or federal law. However, practically all lenders will require homeowners insurance as part of your mortgage agreement.

Does home insurance cover mold?

As with many issues, mold is covered by homeowners insurance if the cause is a covered peril. If the mold is caused by a peril that’s not listed in your policy (such as flooding) or negligence by the homeowner, it will not be covered.

Does homeowners insurance cover water damage?

Water damage caused by a covered peril (for example, a vehicular accident breaking a pipe) will be covered by most homeowners insurance policies. If the cause is something that’s not listed in the policy, such as a hurricane or an DIY home renovation accident, it will not be covered.

How We Chose the Best Homeowners Insurance Companies:

To compile our list of the best homeowners insurance companies, our methodology focused on the following factors:

Coverage: Looked through dozens of insurers and coverage options and narrowed our choices based on policy options, average annual premium, customer service, additional benefits and claims processing speed.

Satisfaction rating: We used J.D. Power’s 2022 U.S. Property Claims Satisfaction Study to gauge customer satisfaction with claim settlement, claim process, First Notice of Loss (FNOL), estimation and repair.

Customer complaints: We evaluated each underwriter’s homeowners insurance complaint ratio based on data from the National Association of Insurance Commissioners (NAIC).

Financial strength rating: We looked at financial ratings from companies such as AM Best and Demotech to make sure insurers are in good standing.

Summary of Best Homeowners Insurance Companies of September 2023