Your home is one of your largest and most meaningful investments, so it’s only right to be picky about the company you choose to insure it.
Naturally, you’ll want the best price — but you also want the right mix of coverage from a company that can afford to pay your claim if disaster strikes. Reliable customer service is a plus, too. Here’s how to take all those factors into account as you choose the best insurance for your home.
How to compare homeowners insurance
Decide how much coverage you need
Finding the best homeowners insurance for you starts with making sure you’re shopping for the right coverage. A standard policy covers your house and other structures, but the amount of coverage you need depends on how much it would cost to rebuild your home.
You’ll also have several options to consider, including the amount of your deductible (the amount you pay out of pocket in the event of a claim) and whether you need extra insurance for valuable items. You might also want policy upgrades to cover earthquake damage or to ensure you can replace old belongings with new ones after a loss, rather than being paid for their depreciated value.
It’s smart to figure out what you need before you compare home insurance companies. That way you can be sure each policy you’re considering provides the same level of coverage. You can also eliminate companies that don’t offer the options you want.
Compare home insurance quotes
After you outline your coverage needs, you can start shopping for homeowners insurance. You’ll want to compare home insurance quotes from at least three companies to be sure you’re getting the cheapest policy you can.
Homeowners insurance cost an average of $101 a month in 2017, according to the latest data from the National Association of Insurance Commissioners. But rates can vary dramatically because no two houses are the same and each insurer uses its own formula to calculate premiums and discounts.
You can shop for quotes online or by phone, or you can work with an insurance agent or broker to find the cheapest homeowners insurance for you. Whichever route you choose, make sure to compare policies with similar coverage and deductibles.
Also, be aware that a home insurance quote is only an estimate. Your price may change if an insurance company checks out your house and determines you need a different amount of coverage.
Check customer satisfaction and complaints
If you choose a home insurance company that’s known for making its customers happy, you can feel more confident of a good experience.
To see whether previous customers have been satisfied, you can look at studies on home insurance and property claims satisfaction from J.D. Power, which surveys thousands of homeowners annually. Consumer Reports also surveys its members about their experiences with homeowners insurance, but comparing the scores requires a paid membership.
The NAIC website is another source of information about how insurance companies have performed. You can find out how many complaints were filed against an insurer with state regulators, the reasons for the complaints and whether there were more complaints than expected for a company of its size.
Consider financial strength
You’ll want to buy homeowners insurance from a stable company with enough money to pay claims. Financial strength is one way to evaluate whether an insurer meets that standard. You can check financial strength through a rating firm such as A.M. Best.
NerdWallet typically recommends considering insurers with ratings of A- or higher. Any company with an A.M. Best rating of B+ or higher has a “good” ability to meet its obligations, in A.M. Best’s opinion. Companies with ratings below that may not be quite as safe a bet and often have higher rates of complaints relative to their size.
Best home insurance companies
NerdWallet compiled data for several large home insurance companies to see which ones have the best records for customer satisfaction, complaints and financial strength.
This ranking is only a starting point. It’s based on J.D. Power customer satisfaction ratings, consumer complaint data from the NAIC and financial strength ratings from A.M. Best. However, it doesn’t consider price, which can vary widely, or the availability of policy options that may be important to you. Smaller, regional insurance companies are also worthy of consideration in many areas.
Top homeowners insurance companies
|Company||NerdWallet composite score (300-point max)|
|Note: Not all companies are available in all states.
*USAA is available only to active military members, veterans and their families.
|Auto Club of SoCal||191.2|
|Auto Club Group||181.0|
METHODOLOGY: HOMEOWNERS INSURANCE RANKINGS
How we came up with our rankings: We started with a list of the largest homeowners insurance companies and calculated a total score based on three measurements, each with equal weight within the score. We adjusted scores to a 300-point scale:
- Customer satisfaction scores from J.D. Power’s 2019 U.S. Home Insurance Study, worth up to 100 points.
- Complaint index scores from the National Association of Insurance Commissioners for homeowners insurance, which measure each company’s share of complaints to state regulators relative to its share of total market premiums. We calculated each insurer’s complaint index, weighted for the market share of its subsidiaries, over a three-year period (2016-2018). We then adjusted those scores to a 100-point scale, with 100 meaning the fewest number of complaints and 1 equaling the expected number of complaints for companies of a similar size.
- Financial strength ratings from A.M. Best, which indicate a company’s ability to pay future claims, worth up to 100 points. All of the companies shown have solid financial strength with ratings of “excellent” to “superior.”
NerdWallet Insurance Services, Inc. (Property & Casualty licenses)