Homeowners Insurance: A U.S. News Guide

Our homes are the most expensive things most of us will ever own, so it stands to reason we should protect them. That's where homeowners insurance comes in. With home insurance, if you ever experience a burglary, fire, hurricane, or some other disaster, you can rest assured that any damage to your home and possessions – along with your garage, backyard fence, and any other outbuildings and structures on your property – will be paid for. You'll also have personal liability coverage if a visitor is injured, plus your extra living expenses will be reimbursed if your home is so damaged that you have to move out.

Similar to how some landlords require you to have renters insurance, your mortgage lender may require you to have homeowners insurance. However, even if you're not required to buy a homeowners insurance policy, as a homeowner, it's a good idea to do so. A homeowners insurance policy protects you from huge out-of-pocket costs in the event of a disaster. While you may not think damage from a weather-related event would affect you or a thief would target your home, home insurance is one of the best ways to protect your assets from unforeseen incidents. It’s important to note that home insurance is different from a home warranty, which will pay to replace major household systems and appliances that break or wear out.

Below, we list our Best Homeowners Insurance Companies of 2021 to help you choose the one that's right for you. We also introduce you to what homeowners insurance provides, how much it costs, how to buy it, and other things a homeowner needs to know to find the most appropriate insurance policy for your needs. Lastly, you'll find links to other pages with additional information on a variety of key homeowners insurance topics.

Best Homeowners Insurance Companies

Based on data and research we conducted in January 2021, our top 10 homeowners insurance providers are listed below and you can follow the links in the companies' names to read our full reviews. You can also read more about the Best Homeowners Insurance Companies here.

How Does Homeowners Insurance Work?

Homeowners insurance works by covering your assets in the case of unforeseen events. A homeowners policy will pay to repair or rebuild your home or outbuildings, like a garage, if something unfortunate or even catastrophic happens to it, such as theft, vandalism, storm damage, water damage, or fire. Your policy will also cover your personal possessions that are stored in your home or on your property, such as clothing and furniture. Insurance will also provide liability coverage in the event that a guest is injured on your property. Coverage includes paying their medical expenses and your legal fees if they sue you. Finally, home insurance can even cover items like a swimming pool that increase a homeowner's liability risk or high-value items like fine jewelry, although these often require a higher premium to insure.

While home insurance covers many weather-related events, the majority of standard home insurance policies don't cover homeowners for earthquake and flood damage. If you live in a flood- or earthquake-prone area, your mortgage lender may require you to purchase extra homeowners coverage for this type of event. If your home insurance company doesn't offer flood insurance at all, it can be purchased through the National Flood Insurance Program, which is administered by the Federal Emergency Management Agency (FEMA). These policies are available throughout the U.S., and your cost will primarily be determined based on where you live. Visit FEMA's website for a map that shows the flood risk in your area. You can also use the U.S. Geological Survey’s fault line map to determine how close your home is to a fault line and if you may need to consider purchasing earthquake insurance.

While a standard homeowners policy covers many of your assets, damage repairs, and expenses when something happens to your home, additional insurance coverage can help you fine-tune your policy to meet your specific needs. Most insurance companies offer a variety of add-on coverage options that can expand the reach of your home insurance. Common optional coverages include water backup, scheduled personal property, umbrella coverage, additional personal property, and even coverage of sports equipment and musical instruments. According to reports from the Civil Engineering Research Foundation, America’s sewer lines are on average 30 years old and sewer backups are increasing at about 3 percent annually. Which makes add-on coverage a good option for many homeowners.

When purchasing an insurance policy, it is recommended that you speak to an insurance professional from the company to ensure that you receive a policy that meets your specific needs at the best possible price.

For more information, see How Does Homeowners Insurance Work?

How to Buy Homeowners Insurance

The first step to buying homeowners insurance is to determine how much insurance coverage you need. To estimate the coverage you need, you should take a home inventory, or an inventory of all of your personal property both inside and outside your home; calculate the cost to rebuild your home after a disaster (ask a real estate agent for building costs in your area); and determine if you need additional coverage for earthquakes, floods, or a high-risk item like a swimming pool. If you have trouble determining how much home insurance you need, the Insurance Information Institute can help walk you through the process, as can a licensed insurance agent or realtor.

Next, decide if you want replacement cost coverage or actual cash value coverage. A replacement cost policy will pay to replace your personal property with new equivalent items, whereas an actual cash value policy factors in depreciation – in other words, what your personal belongings are worth used. For things like electronics that depreciate quickly, an actual cash value policy could leave you well short when it comes to buying new items. In addition, a replacement cost policy will provide enough insurance money to rebuild your home even if building costs rise. As a result, most insurance experts recommend a replacement cost policy, even though premiums are somewhat higher.

When you are ready to purchase home insurance, you can buy a policy through the insurers' website, over the phone, or through an independent or dedicated local insurance agent. A great way to start is with the estimate tool on the home insurance company’s website. The estimate tool allows you to get an idea of how much coverage you need and what it will cost you. Then it can be helpful to talk to an agent in person or over the phone for additional help. Get quotes from several companies, but be sure to compare policies that offer similar coverages.

Some home insurance companies may require a home inspection to confirm the condition of your home and ensure you have adequate coverage. If a home inspection is required, the insurance company will send an inspector to your home. Due to COVID-19, many insurance companies have updated their inspection process to follow safety precautions, including wearing PPE and social distancing. Some inspections will not require you to be present and the inspector will focus on the exterior of your home, including the roof, and any potential hazards in your yard that could cause damage to your home in the case of a severe storm. However, some companies are still completing interior inspections focusing on the condition of your home’s electrical systems, ventilation, fireplace, plumbing, heating, and air conditioning systems. When purchasing home insurance, check the requirements of the insurer you are considering to determine their home inspection practices.

For more information, see How to Buy Homeowners Insurance.

How to File a Homeowners Insurance Claim

To file a homeowners insurance claim:

1. File a police report if needed. If there's been a crime, you will need to file a police report promptly and note who you speak with.

2. Notify your insurance company. Your insurer needs to be notified promptly as well, either online or over the phone, depending on company policy. This will facilitate your claim and help ensure that you're compensated promptly.

3. Make any urgent repairs. Make any repairs to your home that are urgent, assuming you can do so safely. Photograph the damage before you start, and keep receipts for any materials you purchase.

4. Document the claim. Document all damage, stolen items, and anything else that will form the basis of the claim. Take lots of photos or a video detailing the damage, going room to room if necessary. If you have security cameras, collect and share all footage with your insurance provider.

For more information, see How to File a Homeowners Insurance Claim.

Bundling Home and Auto Insurance

Many insurance companies will give you a discount if you buy more than one type of insurance policy from them – for example, home insurance and auto insurance. This is called insurance bundling or a multi-policy discount. Most insurance companies will offer discounts of between 10% and 20% if you bundle two or more policies together compared to paying for each policy individually. This is worth it to the insurance company because it generates more revenue per customer and helps promote customer loyalty.

However, insurance bundling doesn't always save money. In some cases, an insurance company that for example offers only auto insurance may offer lower rates than companies that sell several different types of policies, according to Amy Bach of consumer advocacy group United Policyholders. Bach says that a company that offers only auto insurance may also offer benefits not available in an insurance bundle from another insurer, such as ticket forgiveness or claims-free discounts.

For more information, see How to Bundle Home and Auto Insurance.

Learn More

There's a lot more to learn about home insurance, including how it works, what it covers, how to file a claim, and how to bundle a homeowners insurance policy with another insurance policy, such as life insurance, to save money on both. For more on these topics, see the guides below.

Homeowners Insurance Companies

360 Methodology for Homeowners Insurance

We explain what matters most to consumers, experts, and professional reviewers when it comes to homeowners insurance . Then we provide an unbiased evaluation of homeowners insurance providers available at the time of review. Our goal is to empower consumers with the information and tools they need to make informed decisions. More information about our 360 Reviews methodology for evaluating homeowners insurance companies is here.