The Best Homeowners Insurance Companies of 2021

Simon Zhen - Dec 01, 2021

Your home is likely to be your most valuable asset. So, it’s a wise move to have the proper homeowners insurance to ensure that damage, theft, and lawsuits don’t lead to a major financial setback.

While it’s smart to research and compare your options, start here with the best home insurance companies that offer a range of homeowners insurance policies and additional coverages with great rates and excellent customer service.

Best Homeowners Insurance Companies

  • Chubb
  • USAA
  • Allstate
  • Erie
  • Nationwide

Rankings for the best homeowners insurance companies were identified in partnership with Insure.com, which analyzed the 15 leading issuers of home insurance and surveyed more than 2,800 home, condo, and renters insurance customers. Each company was rated based on price, customer service, website and mobile app, and customer recommendation while also considering the ratings of A.M. Best. (A.M. Best financial ratings are assessed based on the insurer’s ability to fulfill their financial obligations to policyholders.)

Chubb

Chubb provides a wide selection coverage options and benefits that cater to homeowners with higher net worth and expensive properties. Notable features include reimbursements for repairs or rebuilding that would exceed policy limits, direct cash settlement, and security and safety advice.

An extensive list of discounts is offered as incentives for added security features, such as perimeter alarms, security guards, closed-circuit video surveillance, property location in a gated community, and more.

Chubb Home Insurance Pros & Cons

Pros Cons
  • Comprehensive coverage and perks for high net worth clients
  • Low customer complaints
  • Multiple types of discounts revolved around security
  • Primarily covers only expensive homes
  • Not accessible to homeowners seeking affordable policies

Read our Chubb Insurance review.

USAA

USAA is one of the biggest U.S. financial institutions offering a variety of products and services that are available only to members of the U.S. military, veterans, and their families.

Known for excellent customer service, USAA also provides replacement cost coverage for your property and personal belongings as part of the standard policy. There’s also a coverage option for those who rent out their homes through platforms such as AirBnB.

USAA Homeowners Insurance Pros & Cons

Pros Cons
  • Highly acclaimed customer service and claims process
  • Strong industry ratings, including financial health and low customer complaints
  • Homesharing coverage available in some states
  • Must have military affiliation to be eligible

Read our review of USAA insurance products and coverages.

Allstate

Allstate provides a wide range of optional homeowners insurance coverages such as identity theft, water backup, home-sharing, business-related items, lost electronic-data recovery and more.

Discounts are available for first-time home buyers, new customers without recent claims, automatic payments, and more.

Allstate Homeowners Insurance Pros & Cons

Pros Cons
  • Wide range of discounts and optional coverages
  • Low customer complaints and strong financial health
  • Simple claims process and excellent customer experience
  • Slightly more costly than the industry averages

Read our editor's review of Allstate insurance products.

Erie Insurance

Erie Insurance offers homeowners insurance with a feature highlight known as “Guaranteed Replacement Cost,” which allows you to rebuild your home to its exact previous specifications without a cost limit. Additionally, you can customize the coverage deductible for certain hazards, such as storm damage.

Erie only services 12 states and Washington, D.C. and products are offered through licensed independent agents.

Eries Homeowners Insurance Pros & Cons

Pros Cons
  • Comprehensive coverage that includes animals and theft
  • Guaranteed replacement cost
  • Great industry ratings on claims and customer complaints
  • Only available in 12 states
  • Online experience is lacking

Read our Erie Insurance editor's review.

Nationwide

Nationwide offers a comprehensive range of home insurance policies and additional coverages such as damaged or stolen items bought brand-new, roof replacement upgrades, water backup coverage, and more.

Discounts are available when you bundle with other insurance products, install protective devices, gated community locations, newly-purchased homes (within last 12 months), and more.

Nationwide Homeowners Insurance Pros & Cons

Pros Cons
  • Wide range of coverage with perks such as rebuild and water backup coverages
  • Multiple discounts available, if eligible
  • Easy application and claims
  • Average claims satisfaction ratings

Read out Nationwide Insurance editor's review.


Homeowners Insurance Company Industry Rankings

Insurer J.D. Power Rating AM Best Rating
USAA 5/5 A++
Amica 5/5 A+
Erie 5/5 A+
State Farm 4/5 A
Farmers 3/5 A
Allstate 3/5 A+
Progressive 3/5 A+
The Hartford 3/5 A+
Chubb 2/5 A++
Nationwide 2/5 A+
Travelers 2/5 A++
Safeco 2/5 A
AIG 2/5 A
Metlife 2/5 A
Liberty Mutual 2/5 A

The Most Expensive Homeowners Insurance Rates by State

State Average rate ($300,000 dwelling/$1,000 ded./$300,000 liability)
Oklahoma $4,445
Kansas $3,931
Florida $3,643
Arkansas $3,439
Texas $3,429
Mississippi $3,340
Louisiana $3,270
South Dakota $3,172
Nebraska $3,133
Missouri $3,111

Standard Home Insurance Coverage

Homeowners insurance is necessary protection against major damages and loss from disasters, accidents, and theft. 

Most policies include the basic coverages for your dwelling, personal property, liability, and additional living expenses.

Dwelling

Your policy will pay to fix or rebuild your home due to damage from fire, storms, falling trees and other types of hazards. This also covers external structures such as sheds, garages, and outdoor fireplaces.

Importantly, this does not cover flood damage or earthquake damage.

Personal property

Personal property is covered if stolen or destroyed by covered reasons. This includes furniture, clothing, electronics, appliances, trees, plants, and more.

It’s important to keep an inventory of these personal items in the event that you ever need to file a claim.

Liability protection

Liability is meant to protect you against lawsuits for bodily injury or property caused by you or your family members (including your pets) to other people and their property.

Additional living expenses

Coverage for additional living expenses will pay for the costs of housing outside of your home when your home becomes uninhabitable and under repair (for instance, after damage from a fire).

Average Homeowners Insurance Rates by Coverage Level

Dwelling coverage Deductible Liability Average rate
$200,000 $1,000 $100,000 $1,806
$200,000 $1,000 $300,000 $1,824
$300,000 $1,000 $100,000 $2,285
$300,000 $1,000 $300,000 $2,305
$400,000 $1,000 $100,000 $2,694
$400,000 $1,000 $300,000 $2,709
$500,000 $1,000 $100,000 $3,046
$500,000 $1,000 $300,000 $3,056
$600,000 $1,000 $100,000 $3,304
$600,000 $1,000 $300,000 $3,323

Additional Riders to Consider

Depending on the location of your home and additional coverages that you desire, riders can be added to your homeowners insurance policy.

Common types of homeowners insurance riders include:

Jewelry

High-value jewelry and priceless heirlooms may justify the jewelry rider to make your whole in the case of theft.

Specialty items

Specialty items include artwork, antiques, collectible, instruments, and other such items that may be worth a lot of money.

Water back up

Water damage from a backed up water drain or sump pump is not typically covered by standard homeowners insurance policies (or not up to the amount needed to pay for all the damage and repairs).

Building code coverage

Bringing a property up to code can be extremely expensive and you may have not expected this type of cost when you bought the home.

Business property

Business owners who run at least part of their operations at home will want additional coverage for business equipment and supplies.

Identity theft

If you become a victim of identity theft, this rider could cover the costs involved with recovering your identity and repairing damage from unauthorized use of your personal information.

Landlord rider

Usually, a separate landlord’s insurance policy can protect your home from damage. But, you could also consider adding a rider to your current policy.

Accidental loss

Accident loss helps to cover expensive items that are lost outside of the home. 

Lawn and garden

With a nice lawn or garden, you may worry about damages after a storm or another event that would result in costly repairs and/or landscaping.

Homeowners Insurance Inspection

As part of the underwriting process, the insurance company may send someone to perform a home inspection.

The inspector will look for risks and even identify savings for your policy. Most importantly, the inspector will point out what is and isn’t covered under a standard policy -- and what additional riders (or endorsements) and coverages you might consider.

Typically, the inspector will examine:

If everything is in order, the inspection can help lock in a lower homeowners insurance rate.

How Much Homeowners Insurance Coverage Do I Need?

The amount of insurance you need will depend largely on standards set by your mortgage company. If you borrowed money for your home, the mortgager or bank, has a vested interest in being “made whole” should something happen to the asset (your home) collateralizing the money they lent you.

Typically, your lender will require that you maintain a minimum amount of coverage to rebuild or replace the insured dwelling. Based on these requirements, your insurance agent or broker will recommend amounts for the things covered in your homeowners policy.
Dwelling
This coverage typically includes your main structures such as a home and detached structures like garages, sheds, fences, etc. The amount of dwelling coverage you purchased is based on your home’s market value and how much it would cost to repair, rebuild or replace it in case of a covered loss.

There are some national averages you can refer to for the price per square foot to rebuild a home in the U.S.:

  • Standard = $150 per square foot
  • Upgraded = $150 per square foot
  • Custom = $150 per square foot

So, if you’ve got a standard home with 2,400 square feet, the rebuild estimate would be $360,000.

It’s important to know that your rebuild valuation can change because the cost of building materials can change. You should do an insurance review each year to ensure that you are not underinsured if the cost of building materials increases.

Belongings

This coverage is for your personal property. Your policy will either reimburse you for the replacement cost value or the actual cash value of these items. Actual cash value is based on your items' depreciated value, while replacement cost coverage does not account for depreciation.

If you are in possession of higher-value items like electronics, furs, musical instruments, firearms, sports and hobby equipment, jewelry and collectibles, the standard personal property coverage may be enough. You may be able to increase your insurable limits to cover these items. Your insurer may also offer riders or endorsements, at an additional cost, to cover these items.

How much insurance you will need on these items will be based on the value of the belongings you would need to replace in the event of a covered loss. Creating a home inventory can help you arrive at a figure that ensures all of your valuables are sufficiently insured.

Liability

If someone is hurt on your property, this coverage could help pay for covered damages and expenses, including court costs if you are sued. The default amount for this coverage starts at $100,000 and can go up to $300,000 or even $500,000, depending on the insurer.

If you have a higher net worth, then you might want to supplement this with a Personal Liability Umbrella Policy (PLUP) which usually starts at $1 million and goes up to $100 million or more.

Flood Insurance

Flood insurance does not come standard with homeowners insurance policies. You can obtain a policy from the National Flood Insurance Program. This program is managed by the Federal Emergency Management Agency (FEMA) and offers policies through about 60 insurance providers nationwide.

According to the FEMA website, “Flood insurance is available to anyone living in one of the 23,000 participating NFIP communities.” The website also explains that flood insurance is actually required if your home or business is located in a high-risk flood area with a government-backed mortgage.

Earthquake Insurance

Like flood insurance, earthquake insurance is not offered with homeowners policies. The most common approach is to add earthquake coverage to your homeowners policy through a rider or an endorsement if your insurer offers it. If not, you can purchase a separate earthquake insurance policy altogether. In some areas close to fault lines, your mortgage lender may require you to buy earthquake insurance.

Hurricanes and Storms

Most homeowners insurance policy includes “covered perils” that result from hurricanes. However, in recent years, some insurers have decided to eliminate hurricane coverage from their policies altogether.

You may have to get a separate policy, endorsement, or rider to cover damages caused by a hurricane. In other words, your homeowners policy, as written, may certainly include coverage for wind damage, but it may not cover wind damage from a hurricane! As a result, you may need to purchase hurricane-specific endorsements for full protection on your property—especially if it’s located in a high-risk area.

Is homeowners insurance required by law?

If you have a mortgage on your property, the bank will make homeowners insurance If you own your home outright, that is, with no mortgage, you are not required to have homeowners insurance. However, it’s a good idea to have a policy in place to protect your property from loss. Also, the liability coverage can protect you if someone is injured on your property.

How Can I Reduce My Homeowners Insurance Policy Premiums?

Before you buy a home, it’s best to scout out a location that would present the least amount of risk to an insurance company. For instance, buying a home close to a fire hydrant, fire station, and not prone to natural disasters in a low-crime area is a good start.

If you’ve already purchased your home, you don’t have much choice for risk reduction in terms of your location and geography. However, you can take advantage of several discounts that homeowners insurance companies offer to their customers.

Here are a few examples of discounts you could qualify for that could reduce your insurance premium:

  • Equipment discount: water shut off, sprinkler system, burglar alarm, etc.
  • Multi-policy discount
  • Mortgage-free home discount
  • Paperless billing discount
  • Automatic billing discount
  • Annual payment billing
  • New home discount
  • Mature homeowner discount

Key terms

Deductible

Should a covered incident occur and your claim is paid to cover damages, this is the portion you are responsible for paying. For instance, if you have a claim for $10,000 worth of damage and your deductible is $1,000, the insurance company will give you a check for $9,000. Typically, the higher your deductible, the lower your premium and vice versa.

Replacement cost value

This refers to coverage for your personal property. A replacement cost policy helps pay to repair or replace damaged property without deducting for depreciation.

Actual cash value

This also refers to coverage for your personal property. Actual cash value policies are based on your items' depreciated value, while replacement cost coverage does not account for depreciation.

Guaranteed/extended replacement cost

Extended replacement cost adds to your current dwelling coverage limit. It helps cover additional costs associated with rebuilding that you cannot control and are over the Coverage A limit on your policy.

For example, if your policy covered $250,000 for a rebuild, but you get estimates for $350,000 due to increased demand, changes in local ordinances or materials inflation, then this coverage can make up the gap. You will have to add this coverage to your policy for it to take effect.

Additional living expense

​​This covers increased costs if you are temporarily unable to live in your home due to a covered loss.