According to data from Credit Donkey, most Americans can expect to pay about $3.50 for every $1,000 of their home’s value. The average American pays $94.33 per month in homeowners insurance, which is a total of $1,313 annually.
While most homeowners will end up paying somewhere around this number depending on the size and value of their home, there are a number of other factors that can influence what you actually end up paying for insurance.
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Tip: compare 2-3 companies for best rate
Best Cheap Home Insurance:
- Best Overall: State Farm
- Best for Discounts: Allstate
- Best for Bundling: Progressive
- Best for Smart Homes: Hippo
- Most Affordable: Lemonade
- Best Customer Service: Esurance
- Best for Claims: American Family
- Best for Replacement Cost: Farmers
Home Insurance Premiums: An Overview
If you are applying for a mortgage to finance the purchase of a home, your mortgage lender may require that you hold a certain percentage of coinsurance before you’re actually issued the loan. Even if you are not required by your mortgage lender to maintain a certain level of coverage, you should protect yourself with comprehensive homeowners insurance.
You probably already know that the city and state where your home is built has a significant effect on its value, which in turn affects how much you’ll pay for insurance. But did you know that what’s near your home can affect your insurance rate as well?
Home Insurance Premium Factors
If you live near a coastline or another body of water (like a lake or stream), you can expect to pay more for your insurance due to the increased risk of flooding. You will probably see higher insurance even if you do not purchase additional flood protection.
Your home’s location can also lower the cost of your insurance as well. Homes that are located closer to fire departments usually enjoy lower insurance premiums because they are less likely to be completely destroyed in the event of a fire.
Married couples typically have fewer insurance claims, so insurance companies are more likely to extend a lower premium to you if you own a home with a spouse.
If you have filed a number of claims in the past, you can expect to pay more for insurance. If you’d like to view your own CLUE report, you can order it by mail. Click here to get started and learn more.
Home Insurance Quotes
Every insurance company uses its own unique formula to determine how much you’ll pay for coverage, how much protection it is willing to issue to you, and if it’ll even insure you at all. Because insurance rates vary depending on so many factors, it’s good to “shop around” for insurance by getting quotes from a number of different insurance providers.
A quote is an estimation of how much you’ll pay for coverage that most insurance companies provide for free to potential customers. Securing a number of quotes before you make your decision can ensure that you’re not overpaying for your protection.
The Cheapest Homeowners Insurance
It’s important to do your own research when you select a homeowners insurance company. Benzinga has compiled the top-rated companies you should explore.
1. State Farm
Some customers like to do business face to face with an agent. Customers in most areas are likely to find one or more agents nearby. While focusing this review on home insurance companies, many customers prefer to keep all their insurance business with one company.
Most of the insurers in our review offer the most common types of insurance, but State Farm stands out as having a complete insurance product offering, all underwritten by the company itself.
At Allstate, customers can expect quality coverage, local agents, and discounts.
They offer a multi-policy discount, claims-free discount, and 5% savings when you sign up for automatic payments and 7 more unique discounts.
Coverage is offered in all 50 states with 24/7 claims availability. Allstates mobile app makes it very easy to view policy documents, file a claim and reach a representative.
If you already have auto insurance with Progressive, it’s definitely worth getting a home insurance quote as well. Multi-policy discounts will apply to both policies in most cases.
For its home insurance policies, Progressive works with affiliated companies to bind coverage. This means your policy might be bound through a third party company, but most policy management can be handled through Progressive and the policy can even be purchased online—with the company boasting same-day coverage.
Hippo offers traditional home insurance coverage, with a twist. In addition to all the necessities Hippo also offers more coverage than the average insurer for computers, home office equipment, appliances and electronics, and they even insure your babysitter.
You can get a quote in as little as 60 seconds. Take advantage of their smart home upgrades to prevent potential issues and have peace of mind with their full replacement costs coverage.
Lemonade is an innovative and engaging new insurance provider that offers some of the most affordable policies on the market. The company uses a new peer-to-peer insurance model.
It works like this: At the beginning of the month, everyone signed onto Lemonade pays a premium. Over the course of the month, Lemonade takes money out of the “pot” to cover insurance claims and administrative costs.
Lemonade also takes a small percentage of money out every month to hold in reserve in case the next month’s claims override the amount of money brought in by premiums.
Esurance’s low-cost policies might be just what you’re looking for. Its host of discounts can also make your policy even more affordable, especially if you already have insurance with Esurance.
With an easy quote process, wide availability and simple-to-use discounts, Esurance is a top contender in the homeowners insurance space.
Their direct line is open from 6 am -12 am CST every day a week, which is almost 24/7 live help. They also promise to respond to email inquiries within 24 hours and encourage customers to reach out via Facebook and Twitter.
7. American Family
Home insurance customers with Progressive or GEICO may be familiar with Homesite Insurance Company, which also underwrites for American Family Home Insurance in Illinois. Like Progressive, American Family is usually sold through independent agents.
An independent agent has access to insurance products from a number of companies, so you’ll be able to compare policy features and quotes to find a policy that best meets your needs. If you have a newer home or have purchased your home within the last three years, you may qualify for a discount with American Family.
There’s also a loyalty discount available for customers who have been with American Family for a long time.
We’re all familiar with the humorous Farmers advertisements that highlight all the strange things that can happen to a house or car—and are still covered. While the ads poke a little fun at life’s surprises, Farmers is all business when it comes to insuring homes.
The company offers discounts for bundling, for certain renovations, and even for a new roof. Proving its focus on customers, Farmers offers thoughtful policy options and features, such as replacement cost coverage and even coverage for trees and shrubs damaged in a covered claim. More populated areas are likely to find a local agent and policies can also be purchased online or by phone.
Protect Your Home and Family
Unlike a car, you can legally own and enjoy a home without maintaining homeowners insurance. However, you can be left in financial ruin if you do not have insurance and you are the victim of a natural disaster, so it’s highly recommended that all homeowners maintain at least some form of insurance.
Price can be a big consideration in many households and low price is certainly among the top marketing messages for insurance companies. However, home insurance can be a complex contract and coverage choices or policy limitations can play a huge role in the real value of a policy.
Frequently Asked Questions
1) Q: If my home is destroyed due to fire or weather, how long will it take for my insurance claim to be settled and my home to be repaired?
2) Q: 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. Get a custom quote today.
3) Q: If I drop my computer, will home insurance cover the cost of replacement?
Home insurance policies usually cover personal property for a specific list of risks, called named perils. These perils might include fire, theft, burst pipes, and more, but dropping your laptop or TV or spilling soda on your new game console isn’t covered. See the best home insurance providers for a custom quote.