Best Homeowners Insurance in Chicago, IL

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Contributor, Benzinga
April 9, 2020

Unlike car insurance, you aren’t legally required to have homeowners insurance in Chicago, Illinois, to own a home. Living without any type of insurance, however, can put you and your family at risk. Today we’ll take a closer look at homeowners insurance, how much you can expect to pay for coverage and a few of our favorite companies offering cheap home insurance

Best Home Insurance Providers in Chicago, IL:

Best Home Insurance Providers in Chicago, IL

Before we learn more about homeowners insurance and what it covers, let’s take a look at a few of our favorite companies offering comprehensive homeowners insurance policies in Chicago. 

1. Best Overall in Chicago, IL: Hippo

Hippo Home Insurance is a relatively new homeowner’s insurance company offering comprehensive policies in Chicago. With Hippo, you can get a quote in as little as 60 seconds and sign up for coverage in minutes — so there’s no excuse to continue living without insurance. 

Hippo’s policies are comprehensive, covering all the standard areas of insurance plus extra coverages that aren’t typically included with standard policies. For example, Hippo home insurance policies cover sewer backups without an additional sewer line insurance deductible, and the company’s policies include full replacement value protection on all your electronics. With a simple quote process and a wide range of coverages, Hippo is our top choice for homeowners in Chicago.

State Farm
Best For
  • Customers who have existing policies with State Farm

2. Cheapest Home Insurance in Chicago, IL: State Farm

As one of the largest home insurance companies in the state, you might already have some type of insurance policy from State Farm. The company also offers comprehensive homeowners insurance policies, with a vast range of discounts and some of the lowest rates in the city of Chicago.

With State Farm, you’re protected from all forms of natural disasters, as well as break-ins and theft. Your possessions are even protected on your insurance policy when you leave home — for example, if your laptop is stolen while on vacation, your State Farm insurance policy will still cover you. 

American Family
Best For
  • Diminishing Deductible Option

3. Best for Choosing Your Deductible: American Family

A deductible is a set amount of money you need to pay toward home repairs or theft before your homeowners insurance kicks in and starts paying for damage. With American Family, you can choose your own deductible to balance premiums and expenses when you need to file a claim.

You can choose a deductible as low as $500, or you can choose a deductible as high as $2,000 and pay less each month in premiums. You can even choose a percentage deductible for the total damage incurred and save more when you pay for your insurance each month. 

Best For
  • No Recent Claims

4. Best for Discounts: Allstate

Most insurance companies offer some form of discounts for homeowners who take steps to protect their property from theft and damage. However, Allstate goes above and beyond when it comes to saving, offering policyholders over 10 unique ways to save. 

You can save on your Allstate insurance policy when you bundle with your auto insurance, install a home security system and even when you switch from another insurance provider. Additional discounts are available for men and women over the age of 55, homes with storm shutters, policyholders who purchase their plan online and much more. 

USAA Home Insurance
Best For
  • Members of the armed forces and their families

5. Best for Military Families: USAA

USAA is a special insurance provider that only offers coverage to veterans and active-duty members of the armed forces. However, its insurance policies are comprehensive, offering protection for everything from fire to identity theft. USAA’s standard policies also include coverage for any rooms that you rent out, which can be especially beneficial for men and women stationed away from their primary residence.

With affordable rates, generous theft and hazard insurance and replacement cost coverage, USAA is an excellent choice for anyone in Chicago who qualifies for a policy. 

Average Annual Home Insurance Premium in Chicago, IL

Chicago is one of the most expensive cities in Illinois to purchase insurance, thanks to higher property values and population density when compared to the rest of the state. On average, a resident of Chicago can expect to pay about $1,500 per year for homeowners insurance — that’s about $125 per month.

Thankfully, many homeowners insurance providers offer discounts that you can use to lower your premiums. Some of the most common discounts you’ll find when shopping for home insurance include:

  • Discounts for bundling home and auto insurance: Most of the big names in home insurance also offer auto insurance. You can save up to 25% on your homeowners insurance by bundling your coverage together with your auto insurance by purchasing both policies through the same provider.
  • Home security system discounts: Installing an anti-theft or fire protection device in your home reduces the chance that you’ll need to file a claim. This makes you less of a liability as a policyholder and decreases the amount you’ll need to pay for coverage every month.
  • Roofing discounts: Most standard homeowners insurance policies cover damage to your roof, including roof leaks and missing shingles after a natural disaster. Some insurance companies offer a discount if your roof is constructed with certain types of anti-impact material.
  • Discounts for higher deductibles: Some home insurance companies allow you to choose what you’d like to pay in a deductible when you need to file a claim. If you accept a higher deductible, you’ll pay less for your insurance coverage each month. Remember that you’ll need to be able to cover your deductible before you can use your insurance coverage — so if you don’t have $2,000 in savings, you shouldn’t choose a $2,000 deductible.

Additional discounts may vary by insurance provider. 

What Does Homeowners Insurance Cover?

So, what exactly does homeowners insurance cover? Most homeowner’s insurance policies include the following types of protection.

  • Dwelling coverage: Dwelling coverage compensates you for damage to your home’s physical structure. This includes your roof, walls, flooring and other parts of the home but not your personal possessions.

When you shop for dwelling coverage protection, you’ll usually see a list of covered perils that you have protection from. If your home is damaged from any one of your policy’s covered perils, you can use your insurance to cover the damage. If your damage comes from an uncovered peril, your insurance won’t help you pay for repairs.

  • Other structures protection: Your homeowners insurance may also include coverage for dwellings on your property that aren’t attached to your home. Examples might include detached garages, tool sheds and pool houses.
  • Personal property coverage: Your insurance doesn’t only cover the physical structures on your property — it also protects your belongings from covered perils as well as theft. For example, if your furniture is damaged by a fire or a thief steals your gaming system, your homeowners insurance will help you replace or repair the things you lost. Most insurance coverages do have limitations on the total payout amount for each claim.
  • Liability coverage: This coverage is a type of protection that provides legal representation and helps cover the costs of any awarded judgements if someone is injured on your property and sues you for damages. 
  • Imagine that you have a broken step on your porch, a visitor trips over it, breaks his leg and sues you for the cost of his medical bills. Your liability coverage would help you pay for a lawyer to represent you. If a judge issues a ruling in the favor of the injured party, your liability coverage will also help pay this judgment.

The specific types of protections you’ll receive from your homeowners insurance policy will depend on the specific policy you’ve chosen and your policy provider. Never sign any policy until you fully understand what is and isn’t covered, and don’t be afraid to contact an insurance representative if you have questions. 

What Does Homeowners Insurance Not Cover? 

Even the best homeowners insurance policy won’t cover you for everything. Let’s take a look at a few of the most common limitations you’ll see in your policy’s terms.

  • Any costs incurred above your policy limit: Your homeowners insurance policy will include a limit on the total dollar amount it will pay to repair your property or replace your belongings after you file a claim. For example, if you have a coverage limit of $50,000 and your home incurs $75,000 worth of damage after a fire, your insurance will only cover $50,000 worth of this damage — you’ll need to pay for the remaining $25,000. Be sure to know the value of all of your major home possessions before you purchase a policy to avoid coverage limits that are too low.
  • Damage from flooding: Flooding isn’t covered under any homeowners insurance policy. If you live in a high-risk flood area, you can purchase flood insurance through the Federal Emergency Management Agency’s (FEMA) National Flood Program. Flood insurance is issued through private insurance providers, but coverage costs and limits come from FEMA.
  • Very expensive items: It’s normal for homeowners insurance policies to include clauses that limit the total amount of money it will pay out for a specific item or category of items. If your insurance policy comes with $100,000 worth of coverage, for example, a clause that states only $1,000 of this limit can be used to cover jewelry.

If you have something expensive you want to protect in your home, you might want to consider purchasing an additional policy called a “rider.” A rider is an additional layer of protection that extends your coverage for a specific item. Some homeowners choose to purchase riders for things like jewelry, firearms, works of art and other expensive items.

  • Your vehicle: If you have a car parked in your garage, you won’t receive any type of coverage if the vehicle is damaged during a covered peril. If you want coverage for your car that extends to hazards like theft and fire, consider purchasing a comprehensive coverage policy from your insurance provider. 

Understanding Your Home Insurance

Every individual company uses its own formula to calculate what you’ll pay for homeowners insurance. Your credit score, home location, total home value, distance from emergency services and many more factors all play a role in the final price you’ll pay for insurance.

Don’t be afraid to leave yourself with plenty of time to compare insurance providers before you sign onto a policy. Get a quote from a few competing insurance companies and be sure to ask about any discounts you might qualify for. The best way to find the lowest price for homeowners insurance is to know all of your options.