Best Homeowners Insurance for 2020

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Choosing the best home insurance may be one of the most complicated insurance decisions you’ll make. Part of the reason is that home insurance is something of a quiet corner of the insurance universe.

Everyone talks about health insurance, life insurance is hot all over the Internet, and auto insurance is a staple of television. But far less is ever discussed about home insurance, and more specifically, who the best homeowner’s insurance companies are.

But if you’ve been looking for the best home insurance companies, you’ve come to the right place. In this guide, we’ll be highlighting what we believe to be the best homeowner’s insurance companies available, as well as the reasons for including each.

Best Homeowners Insurance Companies

These are the top 12 homeowners insurance companies in 2020:

  1. 🏆 Allstate
  2. Farmers
  3. Lemonade Insurance
  4. Amica Mutual
  5. Liberty Mutual
  6. USAA
  7. Erie Insurance
  8. The Hartford
  9. State Farm
  10. Nationwide
  11. MetLife
  12. GEICO

1. Allstate

Allstate is known for its plethora of discounts.

Right off the bat you can save up to 25% when you bundle homeowners with your Allstate auto insurance. They’ll also give you 5% just for having your premium payment auto-drafted, and you can get a discount of up to 20% if you switch to Allstate and have no recent claims.

Allstate offers its Claim RateGuard (for an additional premium fee) that will keep your rate from going up after filing a claim. You’ll have to measure the cost of the add-on versus the likelihood of filing a claim at all. Other policy provisions include coverage for identity theft, water backup, business property, landscaping, and even electronic data recovery.

  • J.D. Power Customer Satisfaction Rating: 814/1,000
  • A.M. Best Rating: A+

2. Farmers

Farmers Insurance offers the usual list of policy discounts, including bundling and security systems. But they have a couple that are unique in the industry.

For example, they provide discounts for certain professions, like teachers and medical professionals. They also offer decreasing deductibles when you go claim-free. That may not lower your premium, but it will reduce your out-of-pocket in the event of a claim.

Policy options include extended replacement that enables you to rebuild your home at current price levels, Eco-Rebuild providing up to $25,000 if you reconstruct your home using environmentally friendly components, and they even offer provisions for complying with updated building codes if your home has to be rebuilt.

  • J.D. Power Customer Satisfaction Rating: 808/1,000
  • A.M. Best Rating: A

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3. Lemonade Insurance

Lemonade is a relative newcomer, but booming. The company is unique from others listed, in that it operates as a peer-to-peer provider, rather than as a traditional insurance company.

Lemonade uses technology to both simplify the process of obtaining homeowner’s insurance, as well as making it less expensive. Participants in the group pool their money through the payment of insurance premiums, making the funds available when claims are needed by any individual.

They offer both homeowners and renters insurance, with policies based on the value of the property you’re insuring, as well as other factors generally considered by insurance companies. But because they take a non-traditional approach, premiums are typically lower than they are for traditional insurance companies, starting as low as $25 per month for homeowner’s insurance.

They provide the usual types of coverage, including replacement value of your home and the contents, as well as hazards such as theft and vandalism, fire and smoke damage, and weather-related damage caused by rain, snow, and hail. Policies also include both liability insurance and medical payments.

One significant advantage with Lemonade is that you can get a policy with no deductible. Meanwhile, you can incur two claims with no rate increases.

Yet another benefit of Lemonade is instant claim payments. Since the company operates as a peer-to-peer group, you only need to send a list of what’s been stolen or destroyed, along with a video explaining the situation. Your claim will then be paid almost instantly, which is quicker than you’ll get with most insurance companies.

If you’re looking for a relatively basic level of homeowner’s insurance at a low rate, Lemonade is certainly worth taking a look at. And who knows – it may be the future of homeowner’s insurance.

  • J.D. Power Customer Satisfaction Rating: Not rated
  • A.M. Best Rating: N/A

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4. Amica Mutual

Amica takes top honors for customer service, as evidenced by its top ranking in the J.D. Power 2019 U.S. Home Insurance Rankings Study (see screenshot table toward the end of this guide). And it’s been sitting at the top of that list for all of 18 years!

Policy provisions include up to $5,000 in reimbursement for fraudulent credit card charges, home business coverage, coverage for damage due to water backups or sump pump overflows, and extended coverage for high-value possessions, like jewelry.

Discounts are offered for bundling with other policies, going claim-free for at least three years, having homeowner’s insurance – with any company – for a minimum of two years, safety equipment (like alarms and monitoring devices for gas leaks, etc.), and even for electronic billing and communications.

  • J.D. Power Customer Satisfaction Rating: 845/1,000
  • A.M. Best Rating: A+

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5. Liberty Mutual

Liberty Mutual automatically adjusts your coverage amounts upon policy renewal to make sure that your coverage limits reflect current price levels.

They also include policy riders for water backup and sump pump overflow, and identity fraud expenses. Separate policies are available for both flood and earthquake insurance.

Discounts are offered for multi-policy bundling, a new home purchase, installation of protective devices, a new or recently renovated home, and a military discount for active members. You can also get a claim-free discount if you go at least five years without filing a claim and switch to a Liberty Mutual policy.

  • J.D. Power Customer Satisfaction Rating: 792/1,000
  • A.M. Best Rating: A

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6. USAA

USAA is virtually the go-to company for US military members, veterans, and their families. The company is a full-service financial provider, offering banking, investing, and loan services, in addition to auto and homeowner’s insurance.

What’s more, the company offers its policies in all 50 states. They share an A++ financial strength rating from A.M. Best with State Farm and Geico, as well as the highest customer service rating from J.D. Power.

One major limitation is that USAA is not available to the general public. It’s available only to US military active members and veterans, and their families.

USAA offers all the standard policy options available from their competitors. But they also offer both flood and earthquake insurance, as well as business insurance for home business equipment, and personal umbrella coverage for high claims. Discounts are available for up to 10% when you bundle with an auto insurance policy, with another 10% if you go claim-free for at least five years. You can also get a discount if you maintain good payment history and membership loyalty, and lower rates for newer homes are available particularly for those that include certain safety equipment.

  • J.D. Power Customer Satisfaction Rating: 878/1,000
  • A.M. Best Rating: A++

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7. Erie Insurance

If your home is also is a source of rental income, Erie Insurance offers income protection if your tenants are forced to vacate the unit due to hazards like fire. But there’s a lot more to this little-known company than rental income coverage. It ranks second only to Amica in customer satisfaction and has a strong rating from A.M. Best. If the company has a disadvantage, it’s that it’s not available in all states.

Erie offers guaranteed replacement cost coverage, which typically provides higher reimbursement than a fixed limit policy. They also offer home business protection and service line coverage in case you damage a buried utility line on your property.

Homeowner’s insurance comes with discounts for bundling policies, safety systems (like fire alarms and sprinkler systems), and even an advance quote discount to new customers. The company also provides earthquake and flood insurance. However, they only offer coverage in about a dozen states.

  • J.D. Power Customer Satisfaction Rating: 838/1,000
  • A.M. Best Rating: A+

8. The Hartford

The Hartford offers discounts specifically targeting retirees. For example, you’ll get a discount if you’re a member of AARP. But you’ll also get a retiree credit. You’ll be eligible for the credit if you work less than 24 hours per week. Those two features, along with their auto insurance bundling discount that lowers your premium by as much as 20%, can represent serious savings for retirees.

The Hartford offers a disappearing property deductible, enabling your deductible to decline as you go claim-free. They also provide full replacement cost if you need to rebuild your home, the ability to replace personal items at current value rather than depreciated value, protection from water backup or sump pump failure, waiver of certain deductibles, identity fraud coverage of up to $50,000, and assisted living care coverage for liability and personal property of a relative living in an assisted living facility.

  • J.D. Power Customer Satisfaction Rating: 806/1,000
  • A.M. Best Rating: A+

9.State Farm

State Farm won’t be the lowest-cost provider in every state. And exactly how much you’ll pay will be determined by the coverage you need and the discounts available for your personal situation. The company has a good reputation and is top-of-the-line in financial strength.

Coverage options include full replacement cost coverage based on the actual cost to rebuild your home, umbrella coverage for excessive claims, up to $10,000 to replace damaged utility lines, identity theft protection, and even damage resulting from mold.

One unique policy provision is coverage for adult day care providers in your home. Discounts are available if you are bundling with other policies, if you are claim free for several years, and if you install alert systems, like fire and smoke detectors, burglar alarms, or a fire extinguisher.

  • J.D. Power Customer Satisfaction Rating: 831/1,000
  • A.M. Best Rating (company financial strength): A++

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10. Nationwide

Nationwide provides you with a credit if you upgrade your home with new components, like heating, air-conditioning, and plumbing and electrical systems. That will give you a discount on your policy premium. But they also offer a discount if you’ve purchased your home within the past year.

Nationwide property replacement cost, but rather replacement cost plus in which standard coverage is increased by 20% if you need to rebuild your house. They also provide coverage for identity theft up to $25,000, water backup, and replacing a damaged roof with superior materials.

Discounts are available for bundling with other coverages, protective devices, going claims-free for at least three years, or switching from another insurance carrier.

  • J.D. Power Customer Satisfaction Rating: 796/1,000
  • A.M. Best Rating: A

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11. MetLife

Many companies offer a specific dollar limit on a homeowner’s insurance policy. But MetLife offers guaranteed replacement cost in most regions of the country. Under this type of provision, you’ll be covered for the full cost to rebuild your home.

This can be a major advantage because inflation has caused the cost of completely rebuilding a home to rise above the market value of homes in many market areas.

Options include a single deductible for both your home and auto policies, so you won’t be hit for deductibles for both policies in the same year. They also offer identity theft protection coverage at no additional cost.

Discounts are available for homeowners who are 55 years old and older and also retired. You can also get discounts for protective devices, if your home has been constructed within the past year, or if you bundle with other MetLife policies.

  • J.D. Power Customer Satisfaction Rating: 791/1,000
  • A.M. Best Rating: A+

12. Geico

Geico is great for financial strength, a title they share with USAA and State Farm, with each having an A++ rating for financial strength from A.M. Best. Many consumers may overlook this quality, but the strength of an insurance company can indicate 1) the likelihood that the company will remain in business, and 2) the probability they’ll pay your claim. A lack of financial strength could interfere with either.

But apart from financial strength, Geico is also one of the lowest-cost providers in many markets. They’re also aggressive on the bundling front, offering large discounts when you pair your homeowner’s insurance with one of their well-known auto insurance policies, which are also usually one of the lowest-cost plans in most markets.

The major disadvantage of Geico is that the company doesn’t have a customer satisfaction rating from J.D. Power. Much like Progressive, its major auto insurance competitor, Geico doesn’t offer their homeowners policies directly. This may be the reason why the company doesn’t have a customer service satisfaction rating for homeowner’s insurance policies (neither does Progressive).

Instead, their homeowner’s insurance is provided by third-party companies. But the bundling discount will usually make this a non-issue. And because of the use of third-party providers, no information is readily available on special policy provisions or discounts. Those will vary based on the third-party provider Geico sets you up with.

  • J.D. Power Customer Satisfaction Rating: Not rated
  • A.M. Best Rating: A++

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Other Home Insurance Companies Reviewed

While these companies did not make our best list for homeowners insurance, they are still companies that are worth your time to look into when you are shopping for the best home insurance for your need:

Best Home Insurance Companies in Your Area

These companies have some of the best offers where you live. Some of these providers may offer the ability to compare multiple carriers at once.

What You Should Know About the Best Homeowner Insurance Companies

Here are the most important factors to consider when evaluating the best homeowners insurance companies.

Customer Service and Satisfaction

We’re basing the customer service and satisfaction of each company on the J.D. Power 2019 U.S. Home Insurance Rankings Study which provides overall customer satisfaction index rankings for major homeowner’s insurance providers:

Which Homeowners Insurance Company Has the Best Customer Service?

Based on the table above, three companies stand out above the rest in overall customer service and satisfaction:

  • Amica
  • Erie
  • State Farm

This was a major reason for each of these three companies placing so well on our list of the best homeowner’s insurance companies.

Claims Services

Though many consumers are understandably concerned primarily with getting a low-cost homeowner’s insurance policy, a critically important criterion is company reputation on claim services. After all, that’s the whole reason you have any type of insurance policy at all. The more likely a company is to pay claims – with a minimum of hassles – the better the end product is.

Which Homeowners Insurance Provider Has the Best Claims Reputation?

We weren’t able to come up with any specific list of homeowner’s insurance companies that are the strongest in this category. However, since claims services are a major part of the J.D. Power Home Insurance Rankings Study above, the top three contenders once again are:

  • Amica
  • Erie
  • State Farm

Financial Strength Ratings

For consumers purchasing insurance of all types, financial strength ratings are often overlooked. That’s because consumers tend to favor specific coverage options at the lowest price. But financial strength ratings should never be overlooked!

We obtained our financial strength ratings from the insurance industry rating service, A.M. Best. You’ve probably noticed that every one of the companies we’ve included in this guide have a rating of “A” or better. That’s not an accident. We consider financial strength ratings to be a critical component of the value of any company you might purchase insurance from.

Financial strength ratings are important because they indicate a company’s ability to continue as a going concern, as well as having the financial ability to pay claims.

Which Homeowners Insurance Companies are the Strongest Financially?

While all companies on this list have good ratings, three stand out with each having top-level ratings of A++:

  • State Farm
  • USAA
  • Geico

That doesn’t mean those companies are automatically better than the others. But it is an indication that they are at the top of the food chain when it comes to overall financial strength. If the decision between one company and another is roughly equal, you should lean toward the one with the higher financial strength rating.

Price and Policy Value

This is the most subjective part of rating the best homeowner’s insurance companies. We attempted to include companies that tend to be on the lower end of the premium scale in many markets, but that evaluation is hardly scientific.

The reality of insurance of all types is that price varies based on a large number of factors including, but not limited to, the following:

  • The amount of insurance coverage you need.
  • Specific policy provisions that will be required for your personal situation.
  • Your claim history, if any.
  • The particular market where your property is located (premiums can vary dramatically from one market area to another).
  • Your personal financial profile.
  • Available discounts which may be based on the features of your property, your ability to bundle homeowner’s insurance with other policies, and any specific personal factors that might entitle you to other discounts including your occupation, education, professional associations, etc.
  • Specific risk factors in your profile or property, such as the type of dog breed you own, any tenants you may have on your property, operating a business from home, owning certain high value possessions, or additional structures on the property, like outbuildings.

What this all means is that a company that will be particularly inexpensive for one person may not be so cheap for another. All premiums are determined by a matrix of factors, which will affect the outcome of how much you’ll pay.

This is also why we strongly recommend you make an application with multiple homeowner’s insurance providers to ensure you’re getting the lowest possible premium. Just make sure the policy provisions between competing companies are identical. That’s the only way to know if you’re truly paying a lower price for the policy.

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