Best Homeowners Insurance Companies of 2021

Homeowners insurance is one of the best ways to protect your most expensive asset: your home. It's easy to think things like fire, major storms, and burglary won't happen to you – until they do. Whether it is severe damage from weather-related incidents or the theft of your jewelry, TV, and other valuables, a home insurance policy can help cover you from a serious financial setback.

Your home insurance protects you in the case of damages caused by perils such as fire, smoke, water (although usually not flooding), theft, vandalism, a storm, or some other event named in the policy. If your home is damaged, your policy will cover the cost of repairing or replacing your home and its contents following the incident. Many home insurance policies will also cover outbuildings like a garage. Homeowners insurance also will replace your stolen or damaged personal property that is stored in your home. If a guest is injured on your property, your policy will also help you pay legal and medical costs. Finally, home insurance will pay your living expenses if you have to move out of your home because it has become uninhabitable due to a covered event.

Homeowners insurance is an investment in protecting your most expensive asset, everything you keep inside it, and yourself from unforeseen financial setbacks. Read on for more about homeowners insurance and the Best Homeowners Insurance Companies of 2021.

How to Choose the Best Homeowners Insurance Policy

While home insurance may seem complicated and overwhelming, it's actually fairly straightforward to choose the best home insurance company and the right insurance policy for you. First, you’ll need to determine the value of your home and its contents, and then select a company and policy that provides the coverage options you need at a reasonable price.

Take the following steps to purchase homeowners insurance:

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

The Best Homeowners Insurance Companies of 2021

To choose the right home insurance company for you, read the descriptions of our Best Homeowners Insurance Companies of 2021 below. We have done extensive research to create this list of the top home insurance companies. You can click on the company names for more in-depth information about what each company offers homeowners and determine which insurer best meets your needs.

Amica Mutual Insurance: Rhode Island-based Amica Mutual Insurance comprises three separate companies with 44 offices around the U.S. It sells homeowners insurance, life insurance, auto insurance, and a variety of other insurance and financial products. Amica sells dividend homeowners policies that pay as much as 20% of the annual premium back to policyholders.

USAA: USAA offers an array of insurance and financial products for members of the U.S. armed forces and reserves of any rank, along with veterans and their families. In addition to homeowners insurance, it sells insurance for life, health, autos, small businesses, pets, and personal property, along with a variety of financial products. It has about 34,000 employees worldwide, about 12.8 million members, and an A++ Financial Strength Rating from A.M. Best.

Erie Insurance: In addition to homeowners policies, Erie sells auto insurance, life insurance, and policies for motorcycles, boats, and recreational vehicles. It also offers retirement planning and an array of business products. However, Erie only sells insurance in limited parts of the East and Midwest, and you can only buy policies through independent agents.

Allstate: Allstate is one of the largest insurers in the U.S., with almost $40 billion in revenue in 2018 and about 42,000 employees and 16 million customers. Allstate owns Encompass Insurance, SquareTrade, and Esurance. It sells all types of insurance, and its homeowners insurance policies feature incentives for energy-efficient upgrades and discounts for seniors and smoke-free homes.

State Farm: State Farm is a large insurer with about 58,000 employees and 19,000 independent agents servicing about 83 million policies and accounts throughout the U.S. In addition to homeowners insurance, State Farm offers life insurance, disability insurance, and other policies, such as insurance for income property, manufactured homes, farms, ranches, and personal. The company has an A++ rating for financial strength from A.M. Best.

Liberty Mutual: Liberty Mutual offers a wide variety of investment and insurance products, including home insurance and auto insurance. The company also provides many customized coverage options, including higher coverage limits for valuables or increased coverage for liability if you have a pool. Various discounts are available to homeowners, from choosing paperless billing to adding a security system to serving in the military.

The Hartford: The Hartford sells home insurance, condo insurance, renters insurance, and many other insurance and financial products. A wide variety of coverage add-ons and packages are available, including water backup, sump pump overflow, assisted living, and green rebuilding coverage.

Farmers Insurance Group: Farmers Insurance Group serves more than 10 million households that collectively hold more than 19 million policies. In addition to home insurance, Farmers offers renters insurance, condo insurance, and policies for mobile and manufactured homes. The company also sells specialty homeowners insurance for vacant homes, undervalued homes, and older homes that might cost more to rebuild than they’re worth.

Chubb: The Chubb Group claims to be the world’s largest publicly traded property and casualty insurer, with $167 billion in assets in 2018. The company sells a full range of insurance products, including homeowners insurance with optional wildfire and earthquake coverage. Chubb has an A++ rating for financial strength from AM Best.

Nationwide Mutual Insurance: Nationwide offers a full range of insurance and financial services across the U.S., including car, motorcycle, boat, homeowners, pet, farm, life, and commercial insurance, along with annuities, mortgages, mutual funds, pensions, long-term savings plans, and specialty health services. Shareholder-owned Nationwide has grown to be one of the largest insurance companies in the U.S.

How Does Homeowners Insurance Work?

Homeowners insurance works by covering your home and personal belongings from unforeseen damages. A standard home insurance policy protects you from paying for damage to your home from a storm, falling tree, fire, or some other hazard, and even covers damage to or theft of personal property like furniture, clothing, and appliances. Outbuildings like a shed or garage, along with items like outdoor grills and fireplaces, are usually also covered. You may need to buy additional coverage for a swimming pool or other high-risk personal property, along with valuables like artwork, jewelry, and high-end electronics. Likewise, expensive home office equipment and small business inventory stored on your property will need separate coverage. Be aware that a standard insurance policy usually doesn't cover flood or earthquake damage. If your home is in a flood-prone area, you'll have to buy add-on coverage or a separate policy from your insurer or the National Flood Insurance Program. Most homeowners insurance companies offer extra coverage for earthquakes and other weather-related damage.

To calculate how much coverage you need, talk to an independent insurance agent, call insurance companies directly, and check company websites for guidelines. Take an inventory of your possessions, and consider what it might cost to live somewhere else while your home is being repaired or rebuilt. Also, try to determine the likelihood of being sued by a guest who's injured on your property; if you own potentially dangerous items like a swimming pool or trampoline, or you frequently have lots of people over, this risk will be higher.

If you have to file a claim, contact your home insurance provider right away to get the process started. Most insurers have a time limit for filing a claim, and doing it sooner rather than later will probably result in faster compensation with fewer hassles. Have as much documentation as you can for your claim available when you call or contact your agent online.

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

Do I Need Homeowners Insurance?

If you own a home, you would be well-advised to purchase homeowners insurance. Most mortgage lenders require home insurance to protect themselves financially if there's a fire, hurricane, or some other disaster that damages or destroys your home. However, even if you don't have a mortgage and could afford to rebuild your home and replace its contents, homeowners insurance is a relatively inexpensive way to avoid these huge out-of-pocket costs.

What Should I Look for in a Homeowners Insurance Policy?

The most important consideration when selecting a homeowners insurance policy is to make sure you have enough coverage to replace your home and personal property in case of a fire, storm, burglary, or some other catastrophe. This will require reading and understanding the fine print of your homeowners policy, which can be a challenge. “We encourage insurance companies to use plain language, but a lot of policies are dense,” says Doug Ommen, insurance commissioner for the Iowa Insurance Division.

Conducting a home inventory and calculating your home's rebuilding cost will let you know how much coverage to purchase. Don't forget high-value items like jewelry and extra liability coverage for swimming pools or other things on your property that pose an additional risk. Optional coverage will increase the rate you pay for home insurance, but it is important to ensure that you have adequate coverage for any unforeseen events. Consider common add-on insurance coverage options, such as water backup, scheduled personal property, and umbrella coverage. The Insurance Information Institute warns homeowners of the growing need for water backup insurance, noting the Civil Engineering Research Foundation report that states the average sewer lines in America are 30 years old and are contributing to a 3 percent increase in sewer backups annually.

Use online quote tools to compare prices from several home insurance companies that sell policies in your area. Choose an affordable insurance policy that provides discounts you can take advantage of, such as a multipolicy discount for bundling homeowners insurance with an auto policy or other policy from the same company.

Finally, most experts recommend a replacement cost policy rather than a cash value policy. Although a replacement cost policy will typically have a 10%-15% higher premium, it will pay for the entire cost of replacing your home, even if rebuilding costs rise over time. Plus, you'll have enough money to buy new personal property, rather than just being reimbursed for the depreciated value of the property that was damaged or destroyed. In the case of certain items like electronics that depreciate quickly, this can significantly reduce your financial burden after a loss.

Other Home Insurance Companies to Consider

In addition to the companies in our rating of the Best Home Insurance Companies, here is another company to consider that we previously reviewed:

Learn More

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

Our 360 Methodology for Evaluating Homeowners Insurance Companies

The following describes our 360 approach to researching and analyzing homeowners insurance companies to provide guidance to prospective consumers.

1. We researched the companies and products people care most about.

U.S. News analyzed and compared a variety of publicly available data, including internet search data, to determine which homeowners insurance brands Americans are most interested in. We found 20 companies that stand out in terms of volume of searches and research among consumers, as well as across the different rating sources. Once we identified these companies, we reviewed the companies’ available homeowners insurance features offered at the time of publication.

We compared available coverages from top homeowners insurance companies across several criteria, including cost, coverage limits, policy features and availability. Research shows that these criteria are among the most important considerations to people shopping for homeowners insurance. We compared cost across different companies using an archetype that, as much as possible, represents a standard American home: a townhome in Naperville, Illinois, with an estimated market value of $245,000, equipped with a home security system and fire alarms, belonging to a non-smoking, four-person family with no pets. We built a standard plan that includes coverage for the home itself, personal property, personal liability, loss of use/additional living expenses and guest medical protection, with a $1,000 deductible and comparable coverage amounts.

2. We created objective 360 Overall Ratings based on an analysis of third-party reviews.

Our scoring methodology is based on a composite analysis of the ratings and reviews published by credible third-party professional and consumer review sources. The ratings are not based on the personal opinions, tests or experiences of U.S. News. To calculate the ratings:

(a) We compiled two types of third-party ratings and reviews:

Please note that not all professional and consumer rating sources met our criteria for objectivity. Therefore, some sources were excluded from our model.

(b) We standardized the inputs to create a common scale.

The third-party review source data were collected in a variety of forms, including ratings, recommendations and accolades. Before including each third-party data point into our scoring equation, we had to standardize it so that it could be compared accurately with data points from other review sources. We used the scoring methodology described below to convert these systems to a comparable scale.

The 360 scoring process first converted each third-party rating into a common 0 to 5 scale. To balance the distribution of scores within each source’s scale, we used a standard deviation (or Z-Score) calculation to determine how each company that a source rated was scored in comparison to the source’s mean score. We then used the Z-Score to create a standardized U.S. News score using the method outlined below:

(c) We calculated the 360 Overall Score based on a weighted-average model.

We assigned “source weights” to each source used in the consensus scoring model based on our assessment of how much the source is trusted and recognized by consumers and how much its published review process indicates that it is both comprehensive and editorially independent. The source weights are assigned on a 1-5 scale. Any source with an assigned weight less than 2 was excluded from the consensus scoring model.

Finally, we combined the converted third-party data points using a weighted average formula based on source weight. This formula calculated the consensus score for each product, which we call the 360 Overall Rating.

State Level Rates Study & Methodology

To get comparative insurance rates for this study, U.S. News also worked with Quadrant Information Services to analyze a report of home insurance rates in 13 states from our top 10 Home Insurance companies, as well as some additional companies to replace any companies in our top 10 that do not operate in every state.

On behalf of U.S. News, Quadrant obtained publicly available rate data that home insurers file with state regulators. The insurance rates in our study are based on a rates for a 47-year-old, married applicant with a 728 FICO credit score. The rates were obtained for a HO3 policy covering a wood-frame house with 10% Other Structures Coverage, 20% Loss of Use Coverage, 50% Personal Property Coverage, and a guest medical limit of $5,000. The sample house size ranged from 2,100 to 2,300 sq. ft., depending on the state in question. Eight home insurance coverage levels were used to collect quotes:

To get the state-wide study rates shown on our state level pages, we computed the mean HO3 policy rate for each of the eight chosen coverage levels across all available companies and all zip codes in each state.