We look at market share, J.D. Power and A.M. Best ratings to determine the best homeowners insurance companies around.
Your mortgage lender will require that you buy a specified amount of homeowners insurance before letting you close on your home. When looking into homeowners insurance companies, you’ll want to consider the company’s financial stability, how they handle claims, how much coverage they offer, their limited liability amounts when covering personal property, customer service, and policy cost.
Read on to learn more about:
|Company||J.D. POWER RATING||A.M. BEST RATING||MARKET SHARE|
|Erie||Among the best||A+||1.69%|
|Liberty Mutual||About average||A||6.86%|
|Safeco (a division of Liberty Mutual)||About average||A||N/A|
|State Farm||Better than most||A||18.63%|
|The Hartford||About average||A+||1.10%|
Homeowners insurance market share (which includes renters insurance policies as well) as of 2017, per the National Association of Insurance Commissioners
High ratings: Amica
Amica consistently ranks among the top homeowners insurance companies for J.D. Power, and for good reason. It’d be easy to chalk it up to “good customer service”, but what exactly do customers value most when judging how good or bad a company’s customer service is? Insurance claims and how communicable they are through the underwriting process. When filing a claim with Amica, you can be sure it’ll be pain-free, mark it down.
A big perk of purchasing homeowners insurance through Metlife is that they guarantee replacement cost coverage – meaning if your home or stuff is damaged or destroyed by a covered peril, your home’s rebuild costs and property will receive the full replacement cost, depreciation notwithstanding. That means if your home is only worth $250,000 but it costs $500,000 to replace, Metlife will pay the full $500,000 to replace your home.
First time buyers: Allstate
If you’ve never bought a home insurance policy before and are unfamiliar with how the process works, there isn’t a better company to guide you through the insurance muck than Allstate. The website has comprehensive articles, videos, infographics and quizzes to ensure you have all the information you need. But that isn’t all, they also have tools that let shoppers see what claims are most common where they live as well as a Google Street View video of your home with advice and tips about potential risks you may face.
Military families: USAA
USAA only sells policies to current and former members of the military and their families and is consistently rated at the top of its class by A.M. Best with a A++ financial strength rating (the best rating available). It doesn’t have an official customer service rating with J.D. Power, but USAA is noted by J.D. as providing “claims satisfaction and shopping satisfaction”. A perk of USAA is if your uniform is damaged or stolen while you're on active duty, USAA will reimburse you deductible-free.
A.M. Best ratings indicate an insurer’s overall financial health: A++ and A+ are considered superior, while A and A- are excellent. There are five other designations for insurers: good (B++, B+), fair (B, B-), marginal (C++, C+), weak (C, C-) and poor (D).
J.D. Power measures customer satisfaction and results are listed by designation: among the best; better than most; about average; and the rest. There’s also an overall winner. Overall performance is calculated on a 1,000-point scale that accounts for policy offering, price, billing, interaction and claims.
While J.D. Power and A.M. Best ratings can tell you a lot about a company and how it treats its customers, the best homeowners insurance policy for you is one that provides the coverage you need for your specific situation. A licensed representative from Policygenius can help you compare homeowners insurance policies and quotes until you find a policy that works for you.
Certain companies, like State Farm, have such low rates because they offer high deductible policy options. If price is your main concern and an insurance company offers a high deductible, it may keep your monthly and annual costs down.
You can find out how good or bad an insurer’s customer service is by simply googling their grades with the different ratings agencies, but you should consider doing a little more digging.
One way to do this is to call the insurance company and see what the hold time is and what the service is like when you wait to speak to a representative about a general inquiry. If the hold time is 3 hours and they don’t seem like an accommodating group, you’re probably not going to want to deal with them after you just lost your house and file a claim.
You should also look into how the company handles the claims process, as the single biggest indicator of home insurance customer satisfaction is the company’s damage estimates. If they have a reputation for not covering the agreed-upon replacement costs of property or dropping customers from their policy for filing a single claim, you should probably avoid that company.
The best companies will also have supplemental coverage options, or endorsements, to add onto your standard homeowners policy. Endorsements can vary, as some provide added coverage to certain types of personal property like jewelry or fine furs only covered up to a certain amount, or they can come in the form of coverage for certain perils like floods and earthquakes that aren’t covered in a standard policy.
One particular advantage of adding endorsements rather than going to separate, specialized insurers is that it keeps everything under one coverage umbrella, limiting both paperwork and the number of insurance companies you have to deal with. Some endorsements that are indicative of a good homeowners insurance company are:
Equipment breakdown coverage is similar to a home warranty insurance policy in that it’s designed to cover certain appliances and property types not covered by your homeowners insurance policy.
If an appliance breaks down, equipment breakdown coverage will pay to have it replaced with an Energy Star-rated appliance of similar quality, saving you from having to pay out of pocket or purchase a separate home warranty insurance policy.
If you’re looking for another way to save money and limit the paperwork and confusion of having policies with multiple insurers, you should look for companies that can bundle your home and auto policies.
A good home insurance company offer bundles, loyalty discounts and will even reward you if you file infrequent claims, but you can also lower your monthly home insurance premium costs by increasing the number of safety and security features in your residence, such as:
Check with your home insurance company to see what kind of discounts are offered, or speak with a licensed representative at Policygenius who can walk you through the different ways to cut down costs on your home insurance policy.
Once you’ve settled on a company, there are still questions you’ll want answered about specific policies offered when shopping for homeowners insurance. Three questions you’ll definitely want answered are:
Rebuild cost: Also known as your policy’s dwelling coverage and other structures coverage, this is the amount it would cost for a full rebuild of your home and other structures like a garage or gardening shed on your property. A good home insurance company will have high dwelling coverage limits.
Personal property coverage: To figure out a policy limit for your personal property, you may want to take an inventory of all of your personal belongings inside the home, value it, and calculate what it would cost to repair or replace your stuff if they’re damaged, destroyed, or stolen by a covered loss. Most of the top home insurance companies will provide checklists, calculators, apps, and other resources to help you keep track of and protect your belongings.
Loss-of-use coverage: Loss of use coverage is typically a fixed amount – 20% of your dwelling coverage, and policy limits for loss of use are set accordingly.
Liability insurance: Liability coverage protects your assets if someone is injured in your home and takes legal action against you. It also provides coverage for you if you cause damage to someone else’s personal property. How much coverage you need depends on your assets, the size of your home, and if you own liability concerns like a pool or treehouse, but most liability limits are anywhere from $100,000 to $500,000.
Medical payments coverage: Should be enough to cover guests’ hospital bills if they’re injured in your home. Medical payments coverage is generally anywhere from $1,000 to $5,000.
The two basic types of homeowners insurance policies that indicate whether your home and personal belongings are covered or not, or whether you’re entitled to liability or loss-of-use coverage or not are named peril or HO1 and HO2 policies (these only cover disasters that are named in the policy) and open peril or HO3 policies (these cover everything except perils not explicitly named in the policy).
Just about every HO1, HO2 and HO3 policy will cover the following:
It depends on the company and state where the policy is effective, but the most comprehensive policies are open peril HO3 policies and will also cover:
Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.
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