Home Insurance Companies: How to Pick The Best One

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Home Insurance Policies

Trust us: you need homeowners’ insurance. Here are some common complaints you hear about property damages: 

  • “My house was destroyed by a tornado.”
  • “The flood damaged my household.”
  • “My home was hit by lightning.”
  • “I lost my roof due to the hurricane.”

Most of the time, you don’t worry after hearing these stories because these disasters don’t take place where you live, or they may be not even true! 

  • “I lost everything because a fire broke out in my apartment.” 
  • “The thieves took my watch collection, TV, laptop, jewelry, tools — everything. Even my personal belongings.”  

What do you think? Sounds more realistic, right? 

You can hear such statements anywhere (even in your neighborhood), not just on the news. So, if one of these calamities happened to you, how would you feel? Let me paint two different pictures of your potential emotional state while experiencing such a tragedy.

Piece of My Mind or Peace of Mind? 

These two phrases are entirely different from each other. They require two different approaches to life. One of them is approaching life as an adventure; the other one is seeking security. One cares about today, and the other cares about tomorrow.

Neither is better than the other, just different. 

The truth is, you never know what can happen tomorrow. Something can come up from nowhere just as easily as nothing can happen for several years. You can choose to live without homeowners’ insurance if you want to roll the dice. 

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Have You Ever Imagined Life Without Homeowners’ Insurance? 

“A tree fell onto the roof of my house and caused enormous damage. A new roof will cost me $4,000. I don’t know how to pay for it. My savings are reserved for my son’s education. I feel destroyed and don’t know how to tell my son that I don’t have the money to pay for college.” 

“An earthquake caused $50,000 worth of damage to our house two years ago. When it happened, my friend opened his doors, so we had a place to live while we repair the house. However, we haven’t been able to afford to finish all the work yet. We are still living with them, which is, honestly, uncomfortable for everyone. I feel miserable and exposed.”  

How About With Homeowners’ Insurance? 

‘We lost our house last year in a fire. We felt overwhelmed because of the loss and all the work we put into the house. It was a tough period because all our plans for the following months ended up in smoke (literally). The good news, however, is that we went to a hotel during the repair process. The home insurance company refunded all our costs, including reparation and additional living expenses. We made the best of our weeks-long hotel stay ← we treated it like a second honeymoon! But, I can’t deny how happy we were to get back to our restored home once it was finished.”

In the first case, you probably would like to give to the universe a piece of your mind about that shameful episode that caused such frustrations and loss in your life. In the second case, you can enjoy peace of mind.  

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Need Further Convincing?

Statistics regarding household damages speak for themselves, and the ways problems can occur are alarming.

From burglary to fire, vandalism, hurricane, lightning, theft, earthquake, and flood, plenty of bad things can happen to our house, and we can neither predict nor prevent what will go wrong in most cases. The exception being incidents that occur due to the homeowner’s mistakes or neglect.

Did you know that 18,000 Americans die in household accidents every year? Did you know that more than 3.4 million children get injured at home every year? There is a broad range of reasons that include falls, burns, poisoning, suffocation, unsafe storage of medications, and many more. You can prevent these kinds of unfortunate events by taking certain precautions, but what about accidents or disasters that happen out of your control? 

Burglaries

Did you know that 2.5 million burglaries take place in the United States every year, according to Protect America? Did you also know that, from this amount, 66 percent are home break-ins? You shouldn’t be surprised about this figure since theft is the most common crime type in the world. See what else the Insurance Information Institute suggests about home invasions. 

Water Damage

Water damage is so typical that almost every home is expected to experience at least one water issue in its lifetime. It can occur for several different reasons, including natural disasters or a plumbing failure. Water damage statistics say that home insurance companies receive more and more water damage claims from their customers than any other. 

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Fires

Damage from a fire is also widespread among household claims. According to the National Fire Protection Association, a fire department was ready to respond to a fire every 24 seconds in 2017. 

Lightning

Do you believe that your home never will get struck by lightning? You are probably right, as it’s extremely rare, but still, take a look at the statistics. According to the National Weather Service, from 2009 to 2018, 27 people died from lightning strikes in the U. S. If your house is struck, the biggest concern is fire, and your homeowners’ insurance will likely cover it.  

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To Insure or Not Insure?

So, we explained that you have two alternatives, but only one of them can be the winner. If you have a family, responsibilities, properties, or you are a homeowner who loves their home and doesn’t want to lose it, make the right choice, and insure your home. 

But what if you don’t think you can afford to pay the premium of the insurance? Fortunately, many casualty insurance companies offer a variety of options to provide insurance coverage on your properties at a reasonable price. 

We put together a list containing the best home insurance companies so that you can have the most prominent names in your mind. But we’re not stopping there!

We are aware of how complicated it is to pick the best fit. That’s why we have gathered all the relevant features you would need to know if you are shopping for an insurance provider for your property. 

But before delving into our subject seriously, let’s take a glance at the meaning of home insurance and other related points you should be familiar with.

Home Insurance Policies

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The 7 Things You Must Know Before Choosing a Homeowners’ Insurance Company 

Home insurance is a multi-risk insurance product that meets all the needs related to home protection, and it was created to protect one’s family and property from any calamity. Providers usually supply property and casualty insurance.

In the event of property damage, you can file a claim to your insurance company; they will send an adjuster to come and personally examine your request, and if approved, the company will pay for your losses.  

Home insurance providers also provide liability insurance in case of personal injuries of third parties on your property. 

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Types of Coverage Provided by Homeowners’ Insurance Companies

All this insurance talk seems complicated, but actually, it can be simplified in this way:

Your homeowner’s insurance must provide three chief areas to cover your loss or liability related to your asset. 

The first is your home’s physical structure, which is known as dwelling coverage. This includes electrical wiring, plumbing, central air, and the heating system. These are considered” open perils,” which means the property is covered from all causes except those that are specifically excluded from your policy. The second coverage is supplied for other structures of your property like fences, sheds, driveways, and electronics. These are also ‘open perils.’ The third one is for personal property or personal belongings that are covered even when they are located on someone else’s real estate. These are called” named perils,” which means only specific reasons listed in the policy are covered

Beyond these three main fields, they cover other losses such as loss of use. Practically, if you need to stay in a hotel room, you will get paid while you cannot live in your home. This kind of covered loss is the so-called additional living expenses. Most companies pay for your financial losses in case someone gets hurt on your property and brings legal charges against you. It is called personal liability coverage

I imagine you have a lot of questions in your mind! Let me guess some of them! 

“Does homeowners’ insurance cover water damage, fire damage, tree damage? 

“Is there flood insurance?”

No rush! We’ll get there, but if you want to dig into the types of insurances right now, you can find a useful guide of what homeowners insurance covers here

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What Homeowners’ Insurance Does Not Cover

With only a general policy, you will unlikely be paid for damage or losses caused by flooding; you will need to purchase flood insurance if you think your properties might be exposed to such a danger. 

Plus, keep in mind the wear and tear exclusion. It means the home insurance company won’t pay for the expected deterioration of the insured object. 

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Key Factors to Consider While Choosing Your Home Insurance Provider

Warning! A signature is not enough to protect the house from theft and fire. During your selecting process, be careful about the amount to be insured and know that the insurer will not always pay your claims.

Next, do your research. Make sure to have enough information about what your potential insurance policy will cover. Read the insurance policy and the contract carefully, so the policy meets your needs and is suitable for each specific case. 

The first mistake to avoid is to try to save money by giving up fundamental coverages for the sole purpose of paying a lower premium. Instead, look for the combination of complete guarantees and the best price. 

There are two essential terms that you should encounter while studying the insurance policy: premiums and deductibles

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What Do Premiums and Deductibles Mean?

To put it simply, the premium is what you pay for insurance coverage. Now, the question is how much you will pay in exchange for this service. The amount of money varies depending on a wide range of factors, starting with the policy. 

What will your insurance company consider for establishing your particular premium? If you were the insurance agent, you would like to know what risk you will take by making a deal with your potential policyholder, right? So, you would analyze the risk factors; in other words, how likely your customer will file a claim to take advantage of the coverage.  

A deductible is another fee. Every insurance agency and company requires this kind of cost. The difference between premium and deductible is that the latter must be paid only when you file a claim. Let me give you a specific example: if your deductible is $ 500, you need to spend this amount out of your pocket before insurance will pay. So if your expenses are only $300, you will have to foot that bill. In case your costs exceed the $500 mark, you have the right to get paid by the insurance company for any amount over the deductible.

To sum it up, a higher deductible usually equals a lower premium and vice-versa. You need to figure out which one fits better to your situation. 

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How Much Does Homeowners’ Insurance Cost? 

The answer to this question depends on many factors, as is usually the case in the insurance world. Homeowners’ insurance companies usually calculate insurance rates based on where you live. You would pay more for insurance where more hurricanes, tornadoes, earthquakes, and other natural disasters typically take place. For example, if you live in Florida, you will pay more than your friend who lives in Vermont.

I know you’re saying, “Fantastic! But how much insurance will I pay?” I know, I know… I was also searching for this answer desperately before I purchased my home insurance. And you know how I discovered the exact price? When I sat down with my agent, who examined my case. Since every situation is different, every home is different, and every company is different (and even plans inside the same company differ), so you will find various options.

Here are some numbers to have an idea about an average home insurance cost by state:  

Thanks to its vast amount of coastline, Florida is the most expensive state, with an average premium of $3,575. Louisiana is next, with an annual rate of $2,979, while you can find the cheapest one in Hawaii, where an average insurance quote is only $337 per year. Find more figures here

I want to highlight that the cost varies based on many factors. For instance, you need to calculate how much insurance coverage do you need.

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How Much Insurance Coverage Do I Need?

If your property is severely hit or destroyed, you will probably want to cover all your future costs to rebuild your home.

You have some alternative coverage options to consider.  

  1. Actual cash value: This means you will be paid for the real value of your property at the time it was damaged. Calculate the actual cash value of your home here.
  2. Replacement cost: Usually, this is better protection for your asset since it implies that the insurance provider would have to pay the costs of rebuilding without applying depreciation. Calculate the replacement cost of your home here. 
  3. Extended value: This option indicates that your provider would pay you up to 20 to 30 percent over your coverage limit. 

Now that you are educated on your options, it’s time to answer the big question: what is the best home insurance company?

Home Insurance Policies

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The Top 8 Homeowners’ Insurance Companies in the U.S.

What is right for you, it’s not necessarily suitable for someone else. Why? Simply because your needs can vary based on aspects like location, property type, value, risk factors, and more.

Your unique home will get a unique insurance policy!  

Even though we listed only eight companies in this article, we are aware that the home insurance market is full of firms, agencies, and other providers. This is just a brief look at the most relevant players in the marketplace.

Let us draw your attention to something crucial before you pick your match: a comparison.

Everything needs to be compared. Compare policies, insurance rates, coverage limits, premiums, deductibles, discounts, bundling options, availabilities based on location, customer service, customer satisfaction, financial strength, handling claims, ratings from consumer reports and related studies — in other words, everything!

Amica Mutual

“Helpfulness insured.” 

When you need a hand finding your way through the maze of insurance processes, Amica Mutual gives it to you.  

When you do your first search on home insurance companies, you will find Amica among the first hits on Google. That’s not only just because they are good at SEO and other marketing strategies; it’s because they are consistently ranked among the best insurance providers. 

Strengths

Amica Mutual is famous for its insurance policy offers, policy information, billing process, customer service, handling claims, and (last but not least) the highest customer satisfaction. They have a 95-percent retention rate, which means that their clients are so satisfied that they don’t leave their company.

Ratings

J.D. Power’s 2018 U.S. Survey has rated Amica Mutual at the top for the 17th-straight year. Why? Because of its superior performance in almost every relevant aspect regarding the insurance industry. This insurance company received an A+ rating from A.M. Best Company for its ability to claim payments and for financial strength. Check out what customers have to say about Amica!

Plus

What can be a significant benefit for you while considering having a policy with Amica Mutual is that it’s a mutual insurance company. That means that its policyholders own the company. Why is it a good thing? Because it distributes dividends to its policyholders if you purchase a dividend policy. 

Is This What You Were Looking For?

If you own other properties (i.e., a car), Amica Mutual is perfect for you. You can combine your home insurance with auto insurance, and you will get a discount. Besides, they give you a discount for loyalty after just two years of membership.

Erie Insurance

Their founding purpose and history are touching: “To provide our Policyholders with as near perfect protection, as near perfect service as is humanly possible, and to do so at the lowest possible cost.”

Strengths

Erie Insurance is the ninth-largest homeowners’ insurance company in the U.S. 

What they are good at is their prices. Their consumers say it, so it truly means something! They say that Erie has a reasonably priced policy based on their customers’ level of coverage. Their coverage options are more extensive than usual among U.S. insurance companies.

They are real and very human. When you decide to make a deal with Erie, you will have an independent personal agent whom you will interact with during all the processes you are going through. Your agent will support you, even if you need help on Sunday evening! They rate highly in customer service as well, since they provide 24/7 assistance.  

Erie is also unique because they genuinely try to meet your requests by adjusting their policies. For example, if you have basic homeowners’ insurance, you can add extra coverage for other natural disasters that may affect your home. You can even add coverage for your valuables.  

Ratings

It is competing at the quality of services with Amica Mutual in the 2018 J.D. Power survey, as Erie Insurance also received high marks. Erie ranked 3 out of 5 stars in each category, which is not bad at all. 

It received an A+ mark from A.M. Best thanks to its financial stability. Check what customers say about Erie!

Plus

Here comes the best part — they are among the cheapest and best insurance agencies in the country. So, I sense, we are on the way of finding the best fit for you. 

Or Is This What You Were Looking For?

However, you have to check if they provide service in your area, as they do not do business across the entire country.

(Here’s an extra tip: interact with them offline! Their online options are a bit more modest compared to their competitors.) 

 State Farm

“Get to a Better State.”

Strengths

Are you looking for the cheapest rates for your eventual homeowner’s insurance policy? Here we go; we found it! State Farm makes coverage available for everyone with its affordable price policy. So, you can get to a better state!   

It offers the most economical solutions when it comes to insurance quotes, and it’s arguably the most famous American insurance company. State Farm also does business nationally so that you can find them in the entire U.S.

State Farm also gives you the chance to bundle different policies. The more you bundle, the more significant the discount you get. For instance, you can choose higher deductibles and consequently, lower annual costs. 

Ratings

J.D. Power thinks they are excellent since State Farm got higher ranks than average in the relevant classes of their 2018 survey. Besides, it received a superior score (A++) from A.M. Best Financial Strength Rating.

Their consumers are satisfied, so what else you need? The company is rated sixth out of 29 companies according to the J.D. Power survey for their insurers’ service, policy offerings, affordable prices, and claims handling. They are also strong financially, as they gained an A.A. rating from S&P Global Ratings for their financial strength. Check what customers say about State Farm!  

Plus

State Farm cares about their customers. It built up a vast network of insurance agents who provide useful assistance when required. They also have a lot of supportive online resources. 

Not Sure Yet? 

If you prefer to personalize your plan, you’d rather look for another company. Moreover, if you need special protection for your property, State Farm is not the best solution, since they have limited endorsement options. 

Allstate 

“You’re in good hands.” 

If you seek to cover all the bases, Allstate may be the choice for you.

Strengths

It is the second-biggest national insurance company after State Farm in America, but Allstate stands out with coverage options and resources. 

Allstate, like its competitors, offers several options to personalize coverages and tailor the policy to its customers’ needs. It is better than most other insurance firms at customization options. For example, you can add extra coverage for the cost to rebuild your home, identity theft protection, floods, earthquake, fire, water backup damage, mobile and manufactured home coverage, and so on. Put simply, it provides more control to homeowners over their insurance issues. 

Allstate is reliable with its online service since you can file claims and pay premiums online throughout their online platform. It’s perfect for new homeowners because their insurance agents honestly keep up with the needs of their customers. Allstate’s customer satisfaction score is not as high as the other leading home insurance companies, so that would tell you that their customer service needs improvement.

Ratings

It is also ranked above average in J.D. Power’s Home Insurance Study in all categories. A.M. Best gave Allstate A+ for financial strength. Check what customers say about Allstate!

Plus

Anything special? Yes! Generally speaking, more discounts are available in Allstate than in other companies. They have a very sharp so-called Claim-Free Bonus feature for those who have not filed a claim during the year by offering exclusive savings and discounts for them.  

Are you a new homeowner or hunting for a new house? Do you not have any idea about home insurance issues, companies, terms…anything? Don’t worry! Allstate will equip you with educational resources and give you tips for policy personalization. 

So, Finally Found? 

To sum up, Allstate is suitable for you if you are a new homeowner, but it’s not the cheapest option in the market. However, let’s remind ourselves that the cheapest is not always the best.

Farmers Insurance

As it comes with their slogan – “We know a thing or two because we’ve seen a thing or two,” Farmers Insurance is all about personalization!

Strengths

Farmers provide services in all 50 states across the U.S.

Farmers Insurance is for those who prefer to personalize their chosen product due to its outstanding custom options and customized services. It offers three packages of coverage: standard, enhanced, and premier. Even the basic packages contain sufficient features for different needs, and you can add more custom options.

The standard level is for starters who don’t have unique and particular requirements. The two remaining are the upgrades of higher coverage limits and additional features. Consequently, if you purchase the premium level, you will have the highest limits on coverage and personal property, in addition to guaranteed replacement cost coverage.

Ratings

Farmers received an excellent ranking in J.D. Power’s Home Insurance Study for all categories and an A score from A.M. Best for its financial strength. 

Good at customization, but not at customer service! Even though they provide 24/7 service, they are ranked only as average in J.D. Power’s customer satisfaction rankings for customer service, claims to file, and claims payouts. Check what customers say about Farmers!

Plus

Claims-free terms deserve special gifts! Farmers award their consumers with special discounts in the event they don’t file a claim. Clients can also turn deductibles for the benefit of themselves since the company may refund $50 each year if the policy is suitable. 

Nationwide 

 “Nationwide is on Your Side.”

Strengths

Nationwide is a mutual insurance company, but it offers “more than just insurance.” It has retirement, investment, and banking services as well. However, it is mostly known for its outstanding replacement cost coverage.  

Nationwide provides general and standard insurance services that you can find elsewhere too; however, it comes with some exciting features! For example, if something terrible happens to your personal property (destroyed, stolen, etc.), the firm will pay you so a fresh one can replace your old item! It’s fantastic! So, doesn’t Nationwide evaluate the actual value of your stuff, but presents you a brand-new item with no questions asked? In practice, yes! 

Pleasantly, the company supplies several useful educational materials, online resources, and helpful tools that make the process of filing a claim more straightforward.  

Ratings

The company took an average rating home from J.D. Power in every category, but what makes the company powerful is its financial stability. It received very high scores for financial strength, which is a big deal! Check what customers say about Nationwide! 

Fewer customer complaints are registered than most insurance companies generally receive, even though its customer satisfaction ratings are right around average. On the other hand, they have many advantages like fast responses, easily reachable agents, and quick payments. 

Plus

There is another very kind thing they do. Do you want to replace your roof with new, more robust materials? Go ahead because Nationwide will refund the costs! 

If you want, you can also get additional coverage for your valuables to protect them. 

Will you keep searching, or have you already found your policy? Nationwide is recommended for new homeowners with high-risk factors, along with fans of bundling.

The Hartford

 “Green, environmentally friendly materials or processes for repairs and rebuilds.” 

The Hartford offers all the above.  

Strengths

Their strength is a plus because it’s something you cannot find elsewhere. 

This company works better for those who want their house to be green and environmentally friendly. They offer abundant coverage options, a wide range of discounts, and a unique endorsement for green rebuilding. Beyond “being green” though, they don’t have many exciting discounts to add.

So, you must like the idea of a green environment and green buildings if you turn to them. In this case, you can be happy because your company will raise your policy limits by up to 10 percent!

The Hartford furnishes pleasing customer service and got quite good marks at customer satisfaction as well. 

However, they provide insurance services mainly for members of the American Association of Retired Persons (AARP) as they have an official agreement. But if you’re under 50 years of age, don’t worry! They have independent agents who will do their best to offer you a solution. 

Ratings

The firm has a superior rating (A+) for financial strength. You can be quite sure they can afford to pay you after you file a claim (if everything meets their requirements, obviously). Check what customers say about the Hartford!

Are you considering owning a greenhouse?

Progressive 

 “Snap it in. Drive Safe”

Strengths

Well, yes, Progressive is better known for cheap car insurance, but they do offer homeowners guarantees for their customers. It suggests you can purchase your desired home insurance through the company. Before buying, check what kind of coverage and service they provide in your state as they can vary.

Their working method is different from the most home insurance companies you find in the market because they rely on other firms and agencies. Why is it important? Because in reality, these partners will fix the rates you should pay and process your claims. Progressive declares on its official website that its partner insurers can decide the prices, coverages, and privacy policies. 

Check what customers say about Progressive!   

Plus

Customer service is also the reason for their built-in quote comparison ability that makes them the best at online home insurance quotes. Though this is also a reason to pay more attention offline. Check what a specific Progressive partner can offer you in your location. Take a look at the ratings, customer reviews, financial scores, and discount opportunities.

Is this Your Match?  

Progressive can be recommended for those new homeowners who are looking for basic coverage options.

We would like to see the reason why you picked a specific homeowners’ insurance company. Please feel free to share your thoughts with us in the comments section.

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