NextAdvisor in Partnership with TIME provides a review below of the best cheap homeowners insurance companies of July 2021.
Owning a home can get expensive fast. In addition to your mortgage, you’ll have to pay property taxes and utility bills — and, to protect that substantial investment,
homeowners insurance as well. But there are ways to save money on the latter.
Most mortgage lenders require you to have homeowners insurance policies for as long as your mortgage term lasts. Even if you don’t have a mortgage, it’s still a good idea to protect the equity you’ve built in your home with insurance, experts say.
“Homeowners insurance covers your house, your belongings, and typically additional expenses for temporary housing if your house is damaged,” says Ken Gregg, CEO of Orion180, an insurance provider that specializes in homeowner insurance in the Southeast. “You want an insurance company that offers appropriate coverage limits to fit your needs and has the financial means to pay out claims.”
The good news is you don’t have to settle for an expensive rate; cheap homeowners insurance can include great coverage and customer service, too.
Quality homeowners insurance shouldn’t break the bank, so we compared homeowners insurance companies across the country to find ones that offer the lowest rates, good customer service, and high-quality coverage.
Their Picks for Cheap Homeowners Insurance Companies of 2021
Company Overview
Nationwide
You may recognize Nationwide for its auto insurance policies, but you can also get home and life insurance with the company. Nationwide’s homeowners insurance covers things you’d expect, like the physical structure of the home and personal liability. It also offers a type of insurance that other companies often charge extra for: ordinance or law coverage.
Because Nationwide offers policies in home, auto, and life, it’s possible to have multiple insurance policies with the same brand. It offers more discounts for homeowners insurance than most companies, up to eight, which makes it easier to keep your insurance premiums down. You can get homeowners insurance with Nationwide in every state except Alaska, Hawaii, Louisiana, and Massachusetts, as well as in Washington, D.C.
Average annual premium for a $250K dwelling: $1,042
Nationwide Coverage Types
- Personal liability insurance
- Medical payments insurance
- Dwelling insurance
- Personal property insurance
- Other structures insurance
- Loss of use insurance
- Ordinance insurance
- Credit card coverage
- Identity theft insurance
- Replacement cost plus insurance
- Valuables plus coverage
- Water backup coverage
- Earthquake insurance
- Flood insurance
- Brand new belongings coverage
- Better roof replacement coverage
Nationwide Home Insurance Discounts
- Multi-policy discount: You can get a lower rate by bundling your home, auto, and life insurance policy.
- Protective device discount: If your home is equipped with smoke detectors, fire alarms, or a security system, you can qualify for a discount.
- Claims-free discount: If you have no insurance claims on your record within the last several years, you may be able to get a discount on your premium.
- Home renovation discount: If you have recently renovated your home’s plumbing, heating, cooling, or electrical systems, you can get a lower rate.
- Roof rating discount: Nationwide policyholders can save money on their insurance policy based on their home’s roof age and surface type.
- New home discount: If you insure a home purchased in the last year, you might be able to qualify for a discount.
- Prior insurance discount: If you switch to Nationwide from a different insurance provider, you can qualify for a discount based on how long you were insured by the other carrier.
- Gated community discount: Homeowners who live in a gated community protected by security guards, residence cards, or key-lock devices can get a lower rate on their home insurance.
Progressive
Progressive offers many types of insurance, from auto and life to homeowners insurance. Progressive’s homeowners insurance, which is technically underwritten by American Strategic Insurance (ASI), has built a reputation for being relatively cheap.
The company’s home insurance is fairly basic in terms of coverage and doesn’t offer many optional coverages, but there are numerous discounts that can help you get a cheaper rate. You may be able to save money if you are a new homebuyer, sign up for paperless statements, or have an alarm system. Progressive also has a user-friendly online tool that lets you compare its rates with other big competitors.
Average annual premium for a $250K dwelling: $1,026
Progressive Coverage Types
- Dwelling insurance
- Other structures coverage
- Personal liability
- Personal property
- Loss of use coverage
- Medical payments coverage
- Water back up coverage
- Personal injury coverage
Progressive Home Insurance Discounts
- Multi-policy discount: You can save an average of 5% when you bundle a home and auto insurance policy with Progressive.
- Safety and alarms discount: If your home is equipped with a security system, fire alarms, or automatic sprinklers, you qualify for a discount.
- Quote in advance discount: Getting a home insurance quote from Progressive at least 10 days before your policy starts can lower your rate.
- Pay in full discount: Policyholders who pay their annual premium upfront and in full can save some money on their insurance.
- New home discount: If you recently purchased a new home or switched from a Progressive renters insurance policy, you’ll get a lower rate.
- Newly built home discount: Newly built homes qualify for a discounted insurance rate.
- Digital documents discount: Policyholders who sign up for emailed statements can get a discount.
Honorable Mentions for Cheap Homeowners Insurance Companies of 2021
USAA
USAA sells all types of insurance policies to active and retired military members and their immediate families, including homeowners insurance. The company consistently scores high in various rankings, making it a competitive candidate for homeowners insurance if you’re eligible.
USAA’s average premium for homeowners insurance is already low, but you may still be able to save. For example, it offers discounts for bundling your home and auto coverage with USAA, having a home security system, and being claims-free.
Average annual premium for a $250K dwelling: $992
USAA Coverage Types
- Dwelling coverage
- Personal belongings
- Loss of Use
- Personal liability
- Other structures
- Home-sharing coverage
- Earthquake coverage
USAA Home Insurance Discounts
- Multi-policy discounts: If you bundle your home insurance with auto insurance from USAA, you can save 10% on your premiums
- Claims-free discount: Policyholders who don’t file any claims for five years will receive a 10% discount
- Protective device discount: USAA partners with ADT and offers discounts to homeowners who install their home security systems
Erie Insurance
Erie Insurance is the 11th largest insurer for homeowners policies, even though it’s available only in 12 states. It offers coverage in Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin, and Washington D.C.
It offers the cheapest average premium on our list but doesn’t cut corners with its coverage. The company not only offers standard coverage for homeowners but also has a guaranteed replacement cost and optional add-ons to help personalize your coverage and meet your needs.
There are many extra ways to save on your premium with Erie, such as multi-policy discounts, protective device discounts, and advanced quote discounts. If you prefer handling your insurance in person, Erie has over 13,000 agents nationwide.
Average annual premium for a $250K dwelling: $897
Erie Coverage Types
- Dwelling coverage
- Personal property
- Personal liability
- Home business protection
- Extra coverage for valuables
- Water/sewage backup coverage
- Guaranteed replacement cost
Erie Home Insurance Discounts
- Protective devices discount: You can get a percentage off your premium for having a smoke alarm, burglary alarm, and automatic sprinkler system installed in a home.
- Advance quote: If you get a quote before your renewal deadline, you can qualify for this discount.
- Multi-policy discount: Erie offers multi-policy discounts from 16% to 25%, depending on your state.
Auto-Owners
Although Auto-Owners’ average premium is the highest on our list, it’s still below the national average. If you are looking for a reputable company and live in one of the 26 states it operates in, Auto-Owners could be a good option for you. Auto-Owners’ homeowners policies are fairly standard but highly customizable, with add-ons like jewelry and valuable items coverage, water backup coverage, and identity theft coverage.
You may also be able to lower your rate by taking advantage of the company’s discounts. It offers nearly 10 different discounts for homeowners insurance, from being a new homebuyer and having a green home to bundling your policies.
Average annual premium for a $250K dwelling: $1,165
Auto-Owners Coverage Types
- Dwelling coverage
- Personal property
- Personal liability
- Other structures coverage
- Medical payments
- Additional living expenses
Auto-Owners Home Insurance Discounts
- Multi-policy discount: You can get a discount for having multiple policies with Auto-Owners.
- Payment history: You may qualify for a discount if you have paid your premiums on time in the past 36 months.
- Green discount: Get this discount by enrolling in paperless billing and paying your policy premiums online.
- Protective devices discount: If you have protective devices, such as smoke detectors, deadbolt locks and fire extinguishers, you may be eligible for this discount.
- Paid-in-full discount: Save more if you pay your annual policy premium in full and on time.
- Mortgage-free discount: You can qualify for this discount if you don’t have a mortgage or line of credit on your home.
- Automatic backup generator discount: Get this discount if you have a qualifying backup generator.
- Advance quote: A discount is available for new applicants who request a premium quote prior to the effective date of the policy.
How to Save Money on Homeowners Insurance
Finding ways to save money on homeowners insurance after investing in a home doesn’t have to be complicated, although some cost-reduction tactics may take a little more effort than others. Here are some actions you can take to help lower your homeowners insurance costs.
Get Multiple Homeowners Insurance Quotes
Just like auto insurance, you should never buy the first policy for which you get a quote. Shop around and compare rates from at least three to five companies to find an affordable policy that meets your needs.
Insure Your Home for the Right Amount
First things first: make sure you’re insuring your home based on how much it would cost to rebuild it, not its current market value. That is crucial in order to insure your house for the right amount.
You can do this correctly by asking your home insurance agent or company to estimate your home’s replacement cost. Keep in mind the replacement cost of your home significantly affects your premium, so every few years, have your insurer reassess its replacement value to ensure you’re not over- or underpaying.
Consider a Higher Deductible
Opting for a higher deductible will lower your monthly payments for homeowners insurance, but you should only go this route if you feel comfortable accepting a larger portion of financial responsibility. If there’s ever an accident or a catastrophic event involving your home, you’ll have to pay out more when you file a claim.
Be Strategic With Your Claims
If you can, avoid filing claims for minor damages and incidents. Too many claims, especially in a short period of time, may set off warning signals to insurance companies and lead to higher rates down the road. Some insurance companies will even offer a discount if you haven’t filed a claim in the last three to five years.
Ask About Discounts
Discounts are an easy way to lower your insurance premiums, although they can vary significantly from company to company. Whichever company you choose for homeowners insurance, ask about their discounts and see if you qualify for any. Many companies are willing to give you more than one discount, especially if you have multiple policies with the same insurer. Here are the most common home insurance discounts to ask about:
- Multi-policy discount
- New home discount
- Advance quote discount
- Payment methods: paperless, automatic, or pay in full
- New home construction
- Senior discount
- Protective devices in the home: Home security systems or fire prevention systems
- Roof upgrades
- Smoke-free
Methodology
To determine our picks for the cheapest homeowners insurance companies, we started with a list of 25 of the largest home insurance companies by premiums collected, based on data from the National Association of Insurance Commissioners. From there, we applied a series of filters to narrow the field across key categories like cost, availability, and customer satisfaction.
For starters, all our top picks must be universally available to all consumers in at least 40 states. To gauge affordability, we looked at Bankrate’s average annual premium across these carriers and eliminated any with an average yearly cost of more than $1,200. (Bankrate, like NextAdvisor, is owned by Red Ventures.) Next, we looked at J.D. Power’s 2020 U.S. Home Insurance Customer Satisfaction Study, and ruled out any companies that scored below 800 on a 1,000-point scale (the industry average was 842).
Finally, we looked at each insurance company’s A.M. Best rating, which evaluates a company’s financial standing. Financial solidity matters for insurance companies because their customers depend on them to pay their claims if they’re in an accident or experience an insured loss. In other words, an insurance company that has the wherewithal to stay in business is more dependable in the long term. We ruled out any company that doesn’t have A.M. Best’s rating of A+ or higher. We also eliminated any companies that are involved in any active fraud investigations.
Click here to read the full article.