Finding the Best Value in Homeowners Insurance
Trying to find affordable home insurance can feel overwhelming. NerdWallet has analyzed data from a wide range of insurance providers to identify the cheapest options based on various factors.
Key Takeaways from NerdWallet’s Analysis
- Cheapest Large Companies: Travelers, Progressive, and USAA emerged as the most budget-friendly among large home insurance companies, according to NerdWallet’s analysis.
- Poor Credit: Travelers and Progressive offer the most affordable rates for homeowners with less-than-stellar credit scores.
- Claims History: Homeowners with a history of claims may find Progressive and Auto-Owners to be the most cost-effective choices.
Methodology
NerdWallet’s analysis looked at pricing data from over 100 insurance companies. The sample policy was for a 40-year-old homeowner with good credit, $300,000 in dwelling coverage, $300,000 in liability coverage, and a $1,000 deductible. It’s important to remember that your own rates may vary.
Cheapest Home Insurance from Large Companies
Here’s a look at the average annual rates and NerdWallet’s star ratings for the most affordable large companies:
*USAA homeowners policies are available only to active military, veterans, and their families. NerdWallet’s ratings are determined by the editorial team; the scoring formula includes factors like discounts, coverage options, website transparency, financial strength, and complaint data.
Diving Deeper into the Top Companies
Travelers
- Overview: Travelers provides a user-friendly experience for managing your policy online, including getting quotes, filing claims, and making payments. Local insurance agents are also available for assistance.
- Discounts: Travelers offers discounts for bundling multiple policies, having no recent claims, recent home purchases, and installing smart-home devices.
Progressive
- Overview: Progressive offers both its own homeowners insurance policies and those from third-party insurers. When you request a quote, Progressive searches for offers from various providers to help you find the best combination of price and coverage.
- Discounts: Bundling home and auto policies, receiving documents electronically, and having a new home can lead to discounts.
USAA
- Overview: USAA provides insurance exclusively to active military members, veterans, and their families. They typically cover belongings on a “replacement cost” basis.
- Discounts: Discounts are available for smart-home devices, loyalty, claims-free history, and bundling multiple USAA policies.
Finding Affordable Home Insurance Based on Specific Needs
Insurance rates can vary significantly depending on individual circumstances. NerdWallet has also analyzed the cheapest options based on various scenarios. Here’s a summary:
- Different Dwelling Coverage Amounts: Depending on the rebuild cost of your home, the amount of dwelling coverage you need will vary. The analysis shows the cost differences between $200,000, $400,000 and $500,000 of dwelling coverage.
- Homeowners with Poor Credit: If you have a lower credit score, the analysis finds the best options suited for your situation.
- Homeowners with a Recent Claim: The analysis identifies the most affordable options for homeowners who have recently filed a claim.
- New Homes: Insuring a new home is generally more affordable. The analysis provides the most affordable options for new homes.
- Higher Deductibles: By raising your deductible, you can often lower your premium. The analysis provides options for a $2,500 deductible.
Cheapest Home Insurance by State and City
The cost of home insurance is heavily influenced by location. The analysis also gives insight into the cheapest home insurance companies in each state and in 20 major cities.
How to Lower Your Home Insurance Costs
The report lists a number of factors that can help you find lower-cost homeowners insurance.
- Ensure Proper Coverage Amount: Insure your home for how much it would cost to rebuild, not necessarily its current market value.
- Shop Around: Compare quotes from at least three different companies to find the most affordable option.
- Increase Your Deductible: Choose a higher deductible to potentially lower your premium.
- Avoid Filing Small Claims: Maintain a clean claim history to potentially avoid rate hikes.
- Add Safety Features: Investing in safety features such as fire extinguishers, deadbolts, and security systems may qualify you for discounts.
- Bundle Policies: Bundling home and auto policies can often reduce your overall costs.
