7 Best Homeowners Insurance Companies

Homeowners insurance ensures that you have money to repair — and, if necessary, rebuild — your home if you suffer a peril such as theft, fire or natural disaster like a tornado. It also includes personal property coverage to replace the contents of your home if they are damaged or destroyed by the calamity.

You should familiarize yourself with homeowners insurance — which also may be referred to as home insurance — coverage and policy types to ensure you have adequate coverage. Without this knowledge, you risk overpaying for coverage or, worse yet, spending money on a policy that proves to be inadequate or insufficient.

To find the best homeowners insurance policy for your needs and your budget, read on to discover our top seven best home insurance companies of 2022.

Our Top Picks for the Best Homeowners Insurance

• Lemonade – Best Online Insurer
• Hippo – Best (Runner-up) Online Insurer
• Erie Insurance Company – Best for Policy Customization
• Allstate – Best for Discount-Seekers
• Amica Mutual – Best Reputation for Customer Service
• USAA – Best for Active and Veteran Service Members
• AIG – Best Coverage for High-Value Properties

Best Homeowners Insurance Reviews

Why we chose it: With a streamlined website and mobile app, Lemonade users enjoy a quick, simple experience when shopping for home insurance quotes as well as filing claims and obtaining reimbursement.

Lemonade Insurance leverages artificial intelligence to speed up both the quote and claims processes. You can obtain a quote from this all-online insurer in just a few minutes thanks to its robust analytical capabilities — all you need to do is fill out a form and select the coverage amount you need.

Along with speedy quotes, submitting a claim and receiving reimbursement is a fast process. The company even says some claims can be paid out in just minutes.

Lemonade levies a flat administrative fee to cover operational costs — a unique financing structure that helps the company keep premiums low. Another reason Lemonade is one of the best homeowners insurance companies is its Lemonade Giveback initiative: This program pledges to donate up to 40% of unspent premium dollars to a nonprofit or charity organization you choose.

Lemonade’s Standard selection of options include coverage for:

• Dwellings
• Other structures on your property
• Personal belongings
• Personal liability
• Medical expenses incurred under a covered peril
• Loss-of-use to cover living expenses if your home is uninhabitable

Coverage offered by Lemonade is offered exclusively in the following states: Arizona, California, Colorado, Connecticut, District of Columbia, Georgia, Illinois, Indiana, Iowa, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Virginia and Wisconsin.

Why we chose it: Hippo is a pioneer of user-friendly technology in its customer service. It also rises to the top for its tech-enabled home security coverage.

Hippo has a streamlined online quote process that lets home insurance shoppers get insured in minutes: The company says home insurance quotes can be generated in less than 60 seconds and policies can be issued within five minutes.

Hippo offers all policyholders a free Smart Home monitoring system that can save homeowners money — with annual premium discounts as high as 25% — for coverage against common perils such as fire and water damage, as well as theft.

After filing a claim, you can also benefit from Hippo’s HomeCare Expert offering. Customers only have to call the company to receive recommendations for repair specialists and maintenance service providers.

As well as Standard coverage options, customers can also elect to protect or cover the following:

• Home office electronic equipment and computers
• Major appliances
• Upgraded equipment for smart home protection
• House-cleaning and house-sitting service
• Damage from water back-up
• Utility service lines
• Enhanced repair and rebuilding
• Full replacement value
• Expenses incurred in complying with changes to local ordinances

Hippo currently is available in 37 states across the country as of 2022.

Why we chose it: Erie has a high level of standard coverage: Policyholders get guaranteed replacement cost coverage, plus a range of additional coverage features for which many other insurers charge separately.

Erie Insurance is notable among homeowners insurance providers for offering guaranteed replacement cost coverage — a specialized offering for which most insurers charge higher premiums — as part of its standard home coverage. This level of coverage guarantees that policyholders will be able to rebuild their homes, even after a complete loss, to the same quality and standard. Some insurers’ baseline offerings only reimburse homeowners based on the current value of the structure or contents after depreciation is subtracted — a potentially significant financial gap.

Erie’s standard policy offering also includes coverage for roof damage (guaranteed full roof replacement is a higher cost, though). Customers can save between 16% and 25% off the cost of their policy by bundling policies. Discounts also are available to homeowners who install home security and automatic sprinkler systems, as well as smoke detectors.

Along with Allstate and USAA, Erie is one of the few home insurance providers to offer home-sharing coverage. This a la carte option is an alternative to purchasing this insurance through a home-sharing platform such as AirBnB or Vrbo. Frequent home-share hosts might welcome the peace of mind this coverage provides, since damage incurred as a result of hosting paying guests is generally disqualified from standard home insurance.

Erie is also notable for offering policies for modular homes, including manufactured and mobile dwelling coverage.

Erie’s standard policy offering also encompasses a number of other areas that are charged on an a la carte basis by other insurers. These include coverage of:

• Collectibles and hard-to-replace valuables
• Gift certificates and cards
• Pets, including birds and fish
• Precious metals and hard currency

In addition, the following coverages can be added to Erie’s home insurance policies:

• Damage from water backup or sump overflow
• Personal liability
• Identity-theft recovery
• Service lines

Why we chose it: Allstate is a company with a stellar reputation and numerous opportunities for policyholders to obtain discounts on their homeowners insurance rates.

Allstate rewards customers for not using its products: Homeowners with coverage through a competing insurer who maintain their homes and remain claim-free can earn premium discounts of up to 20% when they switch to Allstate. Existing customers are rewarded for each year they remain claim-free with deductible discounts.

A unique a la carte option Allstate offers is its Rateguard service. This option gives homeowners flexibility to file one claim every five years without triggering a premium hike. Homeowners will want to calculate the costs of their homeowners insurance rates and deductibles, as well as the additional cost of Rateguard, to determine if this feature makes sense for them financially.

Allstate — as well as Erie and USAA — is one of few homeowners insurance companies to extend coverage (albeit at additional cost) to hosts who use home-sharing platforms like AirBnB and Vrbo. While these platforms offer their own variety of this coverage, a standard homeowners insurance policy does not cover damage caused by paying guests.

Allstate has additional coverage options for the following:

• Identity-theft repair
• Environmentally-friendly property improvements
• Damage resulting from water backup
• Yard and garden damage
• Personal property
• Recovery of electronic data
• Business property
• Hobby equipment, such as musical instruments and sports gear

One important distinction about Allstate is that some homeowners may find themselves funneled to third parties for policy underwriting.

Why we chose it: Amica Mutual has top-rated customer service and a sterling financial-stability ranking. Its Contractor Connection database provides customers with exemplary service even outside the scope of their coverage.

Amica Mutual has earned the top spot in the J.D. Power Property Claims Satisfaction Study for customer service on claims for a remarkable nine years running.

A notable feature for Amica is Contractor Connection, a one-stop shop for reliable contractors. Entrants in this database are all licensed and insured, and any repair work they do comes with a five-year warranty.

Amica offers discounts to policyholders who have been customers for two years or longer, as well as those who remain claim-free for three years or longer.

Amica also offers the following that can be added onto standard homeowners policies. You can get coverage for:

• Valuables and collectibles
• Catastrophes
• Identity theft damages
• Home-based businesses

Why we chose it: USAA has built its reputation on offering comprehensive coverage for active-duty and veteran members of the armed forces, along with exemplary service and low annual premiums.

USAA has earned top marks both for customer satisfaction and financial strength. Although not included in the J.D. Power U.S. Home Insurance Study, an equivalent evaluation found that it surpassed its rivals in delivering superior service.

The company writes policies for members of the armed forces and their families, including the adult children of active service members and veterans.

Customers have the option of electing Guaranteed Replacement Cost coverage when they buy a policy — a feature not offered by many of USAA’s rivals. This coverage provides for rebuilding a home after a catastrophe to exactly the same standards, using the same materials and quality of workmanship, rather than only paying homeowners the depreciated value of the damaged or destroyed structure.

USAA is one of only a few insurers, including Allstate and Erie, to offer homeowners who use home-sharing platforms coverage for damage incurred as a result of hosting paying guests. While this type of coverage can be purchased through home-sharing platforms such as AirBnb and Vrbo, most standard homeowners insurance policies exclude this kind of protection.

The company also has a great reputation for cost-consciousness: Members enjoy low rates for their homeowners insurance coverage.

Why we chose it: AIG offers full coverage for properties valued at up to $100 million — a rarity among insurers in this category.

AIG caters to the wealthiest homeowners with policies and protection levels geared towards the luxury market. High net-worth homeowners can get comprehensive coverage for their homes and belongings as well as cybersecurity.

The company offers guaranteed replacement coverage as a matter of course for homes valued from $750,000 to $100 million. Its comprehensive homeowners offering is issued on an “all-risk” basis, meaning that unless a peril or type of possession is specifically excluded, it is covered by the policy. Homeowners with the financial means to do so can elect to have an ultra-high deductible up to $100,000 in order to secure a lower annual insurance premium.

AIG offers its homeowners coverage exclusively as part of an insurance bundle: You must have one (or more) other policies geared towards the company’s high net-worth customer base, such as insurance for collections of valuables such as art and antiques, luxury cars, yachts and private aircraft.

Other benefits AIG customers can access include: a background check service for domestic staff such as drivers and housekeepers, private firefighting services — for luxury homes in remote areas not covered by municipal or volunteer fire companies — and enhanced cybersecurity protection.

Along with the above, AIG also offers other services oriented towards an ultra-high net-worth customer base, including coverage for:

• Extortion, kidnapping and ransom
• Landscaping
• Reputation and crisis management and restoration
• Multinational properties
• Properties used for or owned by the policyholder’s business

Homeowners Insurance Guide

Homeowners insurance is property insurance that protects the structure or structures and contents of your home. This coverage is intended to give homeowners the means to repair or rebuild after a natural disaster, theft or other accident. Lenders require homeowners to carry home insurance as a condition of their mortgage. If you plan to sell your house and buy another, keep in mind that home insurance covers a specific property — it cannot be carried from one home to another.

Since home insurance protects what is most likely your largest asset, it’s a good idea to work with a knowledgeable insurance agent who can provide you with insight as well as quotes including options for coverage limits, premiums and deductibles. This guide also can help you learn more about these products and how to choose the best homeowners insurance policy for you. Read on to find out everything you need to know.

How to choose the best home insurance

Choosing the best home insurance involves more than just comparing companies. Other variables you need to consider include the cost of the policy, including premiums as well as deductibles, your lifestyle and the type of home you own, and an individual company’s ancillary, a la carte or non-standard offerings.

Home insurance can be complicated, so it pays to take a strategic approach. Read on to learn how to organize the steps you need to take if you want to buy the best homeowners insurance.

• Educate yourself about the differences between home insurance products, including coverage options and policy add-ons, so that you can be sure you’re comparing apples to apples when evaluating different insurers’ offerings.

• Research the predominant home insurance providers operating in your city or region.

• Think about your specific needs, concerns and expectations when you study each insurer’s offerings. You will want to consider the physical geography and exposure to potential natural perils such as wind storms and wildfires. Also factor in your lifestyle, pets, hobbies and leisure pursuits in which your family engages.

• Solicit advice and guidance from an independent insurance agent with expertise in homeowners insurance and knowledge about different providers and their offerings. The quote-unquote best homeowners insurance company is different for different people and properties, so it pays to work with a professional who can guide you to the insurance company that can best meet your needs.

• Ask the agent with whom you choose to work to help you compare quotes in an apples-to-apples fashion. A local agent who has relationships with multiple companies can help you conduct an objective evaluation that takes into account each company’s pricing methods as well as benefits and drawbacks.

What does a homeowners policy cover?

Think of homeowners insurance coverage as a series of tiers, with successive levels offering increasing amounts of protection at correspondingly increasing prices. In addition to these tiers, there are specific categories of policies for home types that are not regular houses. The industry uses an alphanumeric coding system to designate the different levels and dwelling coverage categories — we have included these as well as “plain English” descriptions to make comparisons easier.

Read on to discover the many varieties of home insurance coverage from which you can choose.

H01 — Small

This policy is the most basic, with coverage limited to damage caused by the following 10 specific perils:

1. Fires and lightning strikes
2. Windstorms and hail
3. Explosions
4. Civil unrest
5. Collision with an aircraft
6. Collision with a vehicle
7. Smoke
8. Vandalism
9. Theft
10. Volcanic eruptions and lava flows

H02 — Medium

This policy type includes the events covered in H01 as well as the following six additional perils:

1. Falling objects
2. Snow
3. Water discharge not including floods
4. Unexpected burning or catastrophic failure of a built-in appliance such as a furnace
5. Electrical surges
6. Freezing

H03 — Large

This type of home insurance is the most popular because the protection it offers is more extensive than H01 or H02. These policies cover all kinds of perils with the exception of floods and earthquakes — two disaster types that require their own standalone policies if you live in a high-risk area. For more information about flood insurance — and how to figure out if you need it — check out our flood insurance guide here.

H04 — Rentals

These policies are for renters, not homeowners. If you rent your home, this policy protects your stuff in the event of a disaster. It does not cover the building itself since you don’t own that. For more detail about how renters insurance works, read our guide and reviews of the best renters insurance companies.

H05 — Jumbo

This policy offers the highest level of coverage. Like H03, it protects your home’s structure and personal property against damage caused by all perils with the exception of floods and earthquakes. The difference between the two policy categories is that coverage is at replacement cost. With an H05 policy, your claim will be paid out at the current cost to rebuild or replace whatever has been damaged.

H06 — Condos

This coverage is for condominiums. Similar to renter’s insurance, condo insurance covers your belongings. It also covers the inside of your home. It does not cover common areas or structures, since that portion of the structure falls under the responsibility of the homeowners’ association.

H07 — Manufactured

This policy type is for manufactured homes; that is, structures that were built elsewhere and subsequently transported to a plot. This category includes mobile, manufactured and modular homes. Of note: This category of home insurance is distinct from RV insurance. RV insurance falls into the broad category of auto insurance. If you want to learn more about RV insurance and what it covers, take a look at our guide and reviews of the best RV insurance companies here.

H08 — Historic

This policy is the most limited in its coverage and is only available in some states. It only provides for cash value reimbursement, not full replacement cost. In other words, claims payouts are limited to the current value of the damaged or destroyed structure once depreciation is factored in. Also referred to a “modified coverage,” this is the most frequent — and sometimes only — coverage available for older or historic homes.

As noted in the insurance reviews, most companies let customers augment a standard policy with an a la carte menu of customizable coverage. These add-on options can include protection against work-related damage, identity theft and damage caused by rodents or pets.

What is excluded from homeowners insurance?

Regardless of your policy type or tier, home insurance does not cover the below perils. With a few exceptions, you need to buy separate policies to obtain coverage for these events.

Damage that occurs as a result of the following is not covered by home insurance policies:

• Earthquakes, sinkholes and mud- or rockslides
• Flooding, including damage from a sewer overflow
• Power outages
• Property neglect
• War
• Nuclear hazards of all types
• Self-inflicted intentional property damage
• Government actions
• Property loss resulting from zoning or construction flaws, or a failure to maintain the structure

High-risk flood zones

If you live in an area classified by the Federal Emergency Management Agency (FEMA) as being at high risk for floods, you have to buy separate flood insurance coverage as a separate policy or a rider to your standard home insurance policy.

The federally overseen and subsidized National Flood Insurance Program (NFIP) is the primary flood insurance provider for homeowners, renters and business property owners who live (or have their business domiciled in) one of 23,000 communities designated by the NFIP. Learn more about flood insurance coverage and how to buy flood insurance, at FloodSmart.gov.

Hail and wind damage

Homeowners who live in places where certain types of severe weather occur frequently may find specific weather event exclusions in their policies. For instance, coastal Texas often receives strong hailstorms, so wind and hail damage are not covered by policies issued there.

Homeowners insurance policies written on the Eastern seaboard all the way down to Florida generally have hurricane and windstorm deductibles. This kind of deductible is separate from the deductible you pay if you incur damage from another peril, and is structured as a percentage of coverage rather than a flat dollar amount. The fine print is all regulated by states’ insurance commissioners. You can learn about what your state regulator requires at the Insurance Information Institute.

Earthquakes

Earthquake damage is always excluded from typical homeowners insurance. Homeowners in earthquake-prone places like California who need earthquake coverage must add it as a rider to their existing policy or buy a separate earthquake policy. The California Earthquake Authority is the largest earthquake insurer, which many homeowners rely on for their coverage.

Power outages

If your power goes out and your pipes freeze or everything in your freezer spoils, you might or might not be able to file a homeowners insurance claim. The fine print varies by carrier, so it pays to check your policy. Likewise, if an electrical surge when the power comes back on short-circuits appliances or electronics, you might be able to file a claim — but it’s best to invest in surge protectors just in case your policy excludes this coverage.

What’s this “80% rule” for home insurance policies?

This rule helps ensure that you have adequate coverage if you need to file a claim. To be fully reimbursed for damage up to your coverage maximum, you’re required to buy coverage up to at least 80% of your home’s value. Coverage below 80% will trigger a penalty that stipulates the insurer will pay out a fraction of the damages.

For instance, if your house is worth $500,000 and you have coverage for $400,000 (or 80%), incurred damages of $100,000 will be paid out in full after you meet your deductible. However, if your coverage is only for $300,000, you fall below that 80% threshold so an insurer would not pay the full amount of damages.

In this case, the insurer would pay the greater of:

• The depreciated cash value of the structure or part of the structure that needs to be repaired or rebuilt

• The percentage of coverage you actually do have

The formula for that second option works like this: If you were supposed to have $400,000 of coverage and you instead had $300,000, that equals 75% of the required amount. So, if you had a $100,000 claim, your insurer would pay out $75,000 — or 75%  — after you meet your deductible.

It is important for homeowners to realize, though, that even a policy that nominally offers 100% coverage might not pay out the full cost of rebuilding your home. If it is completely destroyed and the cost to rebuild is higher than your policy maximum, you could have to pay the difference out of pocket. Guaranteed replacement cost coverage avoids this situation, but expect that peace of mind to come at a higher price.

Read the fine print on your policy, and seek out a knowledgeable agent or broker if you are still unsure about the amount of coverage you need.

How much does homeowners insurance cost?

There are a number of variables insurance companies factor into the equation when pricing a home insurance policy. Nationally, the average cost of homeowners insurance is about $1,200 a year, or $100 a month, but there is a wide range of prices across the country. Below are some of the most significant elements that go into generating a homeowners insurance quote.

Key factors that affect your premium

How much coverage you need. The coverage amount a policy offers is a key component that drives the price. While some homeowners might choose 100% replacement coverage or even guaranteed replacement cost coverage, at a minimum you need enough insurance to equal 80% of your home’s value.

Where your home is located. Where you live determines what kinds of natural or weather-related threats you face. A beachfront home in the Southeast, for instance, will almost inevitably cost more to insure than an otherwise-identical property situated further inland. Likewise, if you live in an arid area prone to wildfires, you can expect to pay more than if you lived in a damper climate, everything else being equal.

How old — and how well-kept — your home is. If you live in an older home or if your property is in need of maintenance and upkeep, insurance carriers are likely to deem it a higher risk and will price quotes accordingly.

How big your home is. Your square footage matters: Larger homes cost more to insure because repairing or rebuilding takes a greater amount of materials and labor.

How to get home insurance discounts

It’s important to shop around for the best homeowners insurance because most carriers offer different ways you can save money on your annual premium. Be sure to ask about what discounts you might be eligible for. Most commonly, you are likely to discover policy discounts for the following:

• Bundling policies. If you buy your auto insurance and/or life insurance policies from the company you use for home insurance coverage, many will offer multi-policy discounts.

• Automatic billing. If you arrange for your payment transactions to take place automatically, you can often save money — and save yourself the hassle of having to remember to pay the bill. Most insurance companies will let you use a bank account or a credit card for automatic payments.

• Electronic statements. Going paperless can save trees and save you money.

• Lump-sum payment. If you can afford to pay your entire annual premium at once, you might find that you will pay less over the course of the year than if you made monthly payments.

• Not filing claims. If you remain claims-free for a period of time — generally between three and five years, although it varies by company — many will reward you with an insurance discount.
• Installing protective monitoring devices. Risk-mitigating equipment like a surveillance system, central station burglar alarm or other theft-deterrent devices; smoke alarms; automatic sprinkler system; water sensors, or water shut-off valves might save you money.

Most Common Homeowners Insurance Discounts

• Multi-policy discount: Bundle your homeowner’ insurance with auto insurance or another policy from the same company.
• Automatic payment discount: Set up automatic payments from your bank account or credit card.
• Peerless 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: Spend an amount of time (usually three to five years) without filing a claim.
• Protective devices discount: Install a burglar alarm, surveillance system, sprinkler system, water shut-off system, or smoke alarm system to help prevent losses.

How We Chose the Best Homeowners Insurance Companies

Having the best home insurance companies at your fingertips makes it easier to comparison-shop. We used the following methodology to choose the companies that top our list:

• Researched coverage options offered by dozens of insurance companies, and pared those down based on the variety of coverage types and available customization, typical premium costs, customer service reputation, speed of claims processing and additional benefits.

• Evaluated customer satisfaction based on J.D. Power’s 2021 U.S. Property Claims Satisfaction Study, using survey results pertaining to claims processing and settlement, First Notice of Loss (FNOL), estimation and repair efficiency.

• Calculated home insurance complaint ratio from each underwriter using National Association of Insurance Commissioners (NAIC) data.

• Excluded companies with financial strength ratings lower than A as ranked by A.M. Best ratings agency.

Latest News on Homeowners Insurance

• With greater fluctuations in severe weather and inflation driving up the cost of repair, insurers have become much more reticent to fix roofs. Policyholders may encounter more expensive premiums, higher deductibles, greater restrictions or other obstacles to obtaining roof coverage and filing claims related to roof damage. Educate yourself on this important topic by reading our article, Climate Change Could Quickly Turn Your Old Roof Into a Home Insurance Headache.

• A number of state insurance regulators are trying to prohibit the use of credit scores in calculating homeowners insurance rates on the grounds that it is not a good proxy for risk and can exacerbate inequality. Insurers have pushed back, arguing that credit scores help them assess a policy applicant’s risk profile and that eliminating their use will mean more expensive rates overall. Learn more about the legislation — and which states want to impose it — along with the current state of the debate in our article, States Are Banning the Use of Credit Scores to Set Car and Home Insurance Rates

• Insurers have incurred unusually high claims over the past year due to extreme weather and natural disasters like wildfires as well as challenges in the home insurance market related to COVID. For homeowners, this means higher premiums and more restrictive policy terms as these companies try to recoup their losses. Discover tips and advice for saving money on your homeowners insurance in our article, Home Insurance Rates Are Rising Due to Climate Change: Here’s How to Lower Your Costs

Summary of the Best Homeowners Insurance

• Lemonade – Best Online Insurer
• Hippo – Best (Runner-up) Online Insurer
• Erie Insurance Company – Best for Policy Customization
• Allstate – Best for Discount-Seekers
• Amica Mutual – Best Reputation for Customer Service
• USAA – Best for Active and Veteran Service Members
• AIG – Best Coverage for High-Value Properties