If you own a home and have a mortgage, home insurance is required. And even if you don’t have a mortgage, it’s a good idea.
Homeowners insurance protects you from accidents and disasters that occur inside your home, in detached outbuildings like sheds and garages, and even on the property itself. Home insurance offers legal protection, as well.
Learn more about the best homeowners insurance providers now with Benzinga’s guide.
The Best Homeowner’s Insurance
- Best for Ratings, Price and Comparison: Lemonade
- Best for Those With No Recent Claims: Allstate
- Best for Access to Vetted Companies: Progressive
- Best for the Diminishing Deductible Option: American Family
- Best for People Living in Disaster-Prone Areas: Farmer’s
- Best for Rental Properties and Landlords: Honeycomb Insurance
There’s no shortage of available home insurance options. From the newcomers bursting onto the scene like Lemonade to the reliable players like State Farm and Allstate and the companies in-between like Progressive and Esurance, there’s an insurance option for every need and every budget. The following options are some of the best.
1. Best for Ratings, Price and Comparison: Lemonade
Lemonade provides a top-rated homeowners insurance experience that's easy and hassle free. Award-winning customer service and digital, super-fast everything from just $25 a month.
Lemonade offers home insurance for the tech-savvy consumer. Using insurtech, Lemonade provides a seamless insurance experience from quote to coverage.
Using the Lemonade app you can get insurance in 90 seconds. It takes about 3 minutes to get paid for a claim. Boasting simplicity and transparency, Lemonade takes a flat fee, pays claims quickly and donates what’s leftover to causes close to your heart. It’s like receiving and giving all in one.
Coverage includes things like theft (whether inside or outside your home), perils (fire, water damage, storm damage) and extra living expenses.
Lemonade Home is available in the following states: Arizona, Colorado, Connecticut, District Of Columbia, Georgia, Illinois, Indiana, Iowa, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Virginia, Washington, and Wisconsin.
- Lemonade allows you to quickly uncover a policy that fits your needs and budget
- Lemonade offers a massive range of other insurance products that you can bundle with your homeowners coverage
- Because Lemonade is all online, you may not get the personalized, live service that some insurance customers are accustomed to
- Lemonade, unfortunately, is not available in every US state
2. Best for Those With No Recent Claims: Allstate
Allstate provides quality coverage for your home. Local agents make sure you’re getting the right coverage for you and your home. Coverage includes things like theft, fire and smoke, windstorm or hail, falling objects and frozen plumbing.
You’ll need special policies to cover events like floods or earthquakes. Agents will help you take advantage of the company’s innovative tools and a plethora of discount opportunities. Discount opportunities include multi-policy, payment, claim-free, protect device, loyalty and early signing.
Allstate also offers many resources and learning tools to help you understand different types of insurance and how it can benefit you.
- Multi-policy discounts can help families bundle, save and get all their coverage from one agent
- There are several other discount options that you can bundle over time
- Allstate has a range of local agents with whom you can work and build a relationship
- While Allstate is a big name in the insurance field, the company may charge more than others on certain occasions
3. Best for Access to Vetted Companies: Progressive
With Progressive homeowners insurance, you get a lot of standard coverage and the opportunity to add more. This insurer is not afraid to put its offerings to the test. Directly from the Progressive site, you can compare rates and coverages from multiple companies.
Insurance coverage includes damage from wind, fires, lightning and theft. Coverage also extends to injuries that happen on your property and liability claims. You can also score a lot of discounts for things like bundling homeowners with auto insurance, getting quotes 10 days prior to the beginning of your policy start date, and alarms and safety devices.
- Progressive does let you compare rates from its website, shortening your search for insurance
- You can get quotes and bind coverage very quickly
- Bundling your policies can help you save money over long periods of time
- While Progressive can offer you a range of policies, there are times when this platform will charge more than others. There’s no guarantee that you can save, irrespective of what the commercials say
4. Best for the Diminishing Deductible Option: American Family
American Family understands that you don’t just live in a house, but a home. And everything that makes up that home is uniquely yours and worth protecting. American Family homeowners insurance policies are customizable so that your policy, like your home, is unique to you. Its coverage includes the usual damage from storms, fires, theft and the like. It also includes personal property, temporary living, and liability protection.
It offers many extras like equipment breakdown, sump pump and water backup, matching siding protection, and credit theft protection and monitoring. American Family is a solid choice for if you want to make your home insurance policy fit you and your stuff, rather than trying to fit into a policy.
- Additional protections are available for homeowners
- The policies offered by American Family are designed to cover every liability you might face
- While American Family can help you get the policy you need, it might not offer the savings you need
- Remember that policies like this do not cover surging floodwaters
5. Best for Those in Disaster-Prone Areas: Farmers
While one feature in your home may have tipped the scales toward your purchase, you still need to protect your entire home, its contents and your family. Farmers gets it. It offers 3 policy tiers: You pick the tier that fits your budget and needs best.
From there, each of the tiers is flexible so you can add or change coverage. It gives you a starting point if you need a little direction when it comes to insuring your home. Farmers also offers value-added features at each policy level. These features include declining deductibles, claims-free discount, claim forgiveness and cosmetic damage. Something not often considered is cosmetic damage. Cosmetic damage covers the cost after the functional damage is fixed.
So, if a pipe bursts inside your wall, regular protection will cover fixing the pipe. Cosmetic damage coverage will patch and paint your wall so it’s as good as new.
- There are several tiers of coverage from which you can choose
- You can ask about new discounts at any time
- You can make claims for cosmetic damage
- Remember that there is a difference between a burst pipe and a flood
6. Best for Rental Properties and Landlords: Honeycomb Insurance
Honeycomb Insurance bills itself as revolutionizing the real estate insurance space with cutting-edge technology. The platform offers competitive pricing to those who own or manage rental properties or large developments, condo associations and/or single and multi-family units.
With AI, Honeycomb Insurance makes it easy to customize a policy that meets your needs, simplifying the process by:
- Offering top notch customer service
- Providing insurance coverage with no paperwork
- Completing site inspections with satellite images and computer technology
- Expediting the binding of coverage
With transparent pricing and processes, you can complete your application online, receive assistance from licensed agents and create a payment plan that makes the most sense for your property or community. While Honeycomb is only available in OH, MI, IL, WI, TX, CA, AZ, PA, GA, NJ, UT & MA, it’s an excellent resource for those who can partake.
- This insurer can expedite binding of coverage to protect you almost immediately
- Leverages technology to make your life easier
- No paperwork is required
- Available in a limited number of US states
How Does Home Insurance Work?
The way homeowners insurance works is quite simple: You pay insurance premiums and in return the insurance company protects your home.
- Home insurance covers damage and destruction to the structure or belongings, protection against theft and personal liability claims due to harm or injury to others on the property.
- There are three basic types of coverage:
- Cash value
- Replacement of cost
- Extended replacement cost/value
- Rates are determined by the insurance company’s risk. These risks can focus on the geographical area or the homeowners themselves.
What's Covered Under Homeowners Insurance
It’s important to understand your insurance coverage before you commit to a policy and before you need to use your insurance. Here’s a basic rundown of what homeowners insurance covers:
Homeowners coverage gives you protection against natural disasters like fire and rain, burglaries and even legal issues that might arise due to injuries on your property. If you’re the victim of a fire, for instance, the insurance company will pay to repair the damages — even build you a brand new home.
Homeowners policies cover your structure for natural disasters like:
Most policies even cover detached structures on your property, like garages and fences, tool sheds and gazebos. When purchasing homeowners insurance, be sure you have enough coverage to rebuild your home if necessary.
Homeowners insurance also covers your personal belongings, items inside the structure like:
- Family heirlooms
Homeowners insurance does not always pay the full value for personal belongings. If you have a cash-value policy, the insurance company will usually pay around 20% for the depreciated value. If you have replacement insurance, however, you get the current market price.
You don’t think about liability protection until you need it. What if a guest gets injured on your property? You can be sued. Homeowners insurance protects you against such liabilities.
Let’s say for example you accidentally spill red wine on someone’s $10,000 gown while hosting a party at your house. You are going to be liable for that dress.
If you have homeowners insurance, you’re covered. If at that same party your dog gets loose and bites someone, you’ll be liable for that as well. You could very well be on the hook for all their medical bills and legal expenses if they sue you.
What’s Not Covered Under Home Insurance
Most natural disasters are covered by homeowners insurance, unless otherwise specified. There are a few types of damage that are never covered and require separate policies.
What’s not covered? Mainly floods and earthquakes. Landslides and sinkholes, too. Hurricanes and anything pertaining to wind and rain are covered.
Floods and earthquakes are not covered because they’re considered ground movements. Both flood and earthquake insurance can be purchased separately. Some areas require it, but not all. Flood insurance is provided by FEMA's National Flood Insurance Program. Natural events included in coverage are:
Flood insurance can be easy to miss because many homes in America don’t require flood insurance when you obtain a mortgage. FEMA and the Army Corps of Engineers have developed a flood risk map that ranks homes close to bodies of water highest—usually zones starting with “A”. However, homes that are not in high-risk flood zones might also need flood insurance because you never know when a natural disaster could severely damage or destroy your home.
Homeowners insurance also does not cover normal wear and tear and damage the homeowner causes to the structure. Accidental disasters like fire are covered.
Is Home Insurance Required for a Mortgage?
While there is no law that requires you have home insurance, if you have a mortgage, it’s required by your mortgage company. Your lender has to protect its investment. The first thing you should do when you start shopping for homes is find an insurance agent who can quickly give you quotes on all the homes you find. You want to know if the insurance coverage is cost-prohibitive before you make an offer.
Even if you don’t have a mortgage, it’s a good idea to have home insurance. Home insurance also protects you against legal issues, say if someone were to get injured in your home or on your property.
What is an Earned Premium?
An earned premium is the portion of your premium that an insurance company has collected for an expiring policy. Premiums were paid while the policy was in force, but the policy has since yet expired.
During this period, it’s the insurance company that covers the liability. Any fees paid by the insured party subsequently are known as unearned premiums.
How Home Insurance Premiums are Determined
Ever wonder how your home insurance premiums get determined? There is a process. It depends on the insurance as much as it does the insured.
Factors that come into play when determining home insurance premiums include:
- Value of the home
- Replacement cost
- Claims history
- Credit history
- Age of home
- Amount of deductible
Frequently Asked Questions
How long will it take for my homeowners insurance claim to be processed?
The time it takes for a home insurance claim to be processed depends on the company, but you can expect an initial response between 24 and 48 hours.
What does home insurance cover?
Most modern home insurance policies cover your home for nearly all risks. However, every policy has exclusions, among which you’ll find things like neglect, wear and tear, and ordinance or law. Land movement, including earthquakes, and floods are excluded as well but can be insured with a separate policy. Personal property and liability coverage is also part of most home insurance policies.
What are the most common types of home insurance claims?
Wind and hail claims top the list with nearly 40% of all home insurance claims due to these two acts of nature. Fire and lightning are the second most common, but claims due to fire tend to much bigger than claims dues to other types of risk. The possibility of a total loss is why it’s so important to insure your home for the full cost of rebuilding.
How much does home insurance typically cost?
Home insurance rates vary from person to person, home to home. Varying factors like amount of coverage, value of the home and risk all factor into the price. The average home insurance rate nationally is $1,312 per year for $250,000 in coverage. Homeowners typically spend about 1.9% of their household income on home insurance with costs on the rise by as much as 42% since 2009.