Best Homeowners Insurance For 2022

Find the best coverage for your home with our guide to homeowners insurance in 2022.
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ProviderRatingBest for
State Farm Home
3.8
Bundling Home and Auto
Liberty Mutual Home
3.5
Cheap Rates
Allstate Home
4.6
Overall
Lemonade Home
4.6
Easy Claims
Nationwide Home
4.2
New Homeowners

Your home is likely the most valuable asset you own. Protecting your investment should be a top priority, and getting insurance is one way to do that.

There's no getting around it–homeowners insurance is a necessity. But that doesn't mean you have to overspend or settle for a policy that doesn't offer the coverage you need.

This article will summarize everything you need to know about homeowners insurance and list our top picks.

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What Is Homeowners Insurance?

Homeowners insurance is a type of insurance policy that protects your home from damage or loss. 

Depending on your coverage, it can cover the cost of repairs, replacement, or even relocations. It also covers liability if someone is injured on your property.

If you’re a homeowner, your insurance premiums will typically be based on the value of your home, the amount of coverage you need, and the type of coverage you choose.

There are several types of homeowners insurance, including fire, flood, and wind damage cover. Homeowners insurance is essential to owning a house, and selecting the right policy for your unique needs is crucial.

Best Overall

Sample Costs
1596
AM Best Rating
3.4

Pros

  • Available in all 50 states and Washington DC.

  • Offers customizable coverage and supplemental coverage options.

  • Works with local agents in most areas.

  • Offers lots of discount options on coverage.

  • Additional extras to complement your coverage, like digital identity protection services.

Cons

  • Their rates may be higher than other competitors.

Allstate’s nationwide coverage and exceptional customer service make it one of the leading homeowners insurance providers in the market. 

They offer an extensive range of basic and supplemental options to help homeowners get coverage that meets their needs. While some homeowners may pay more for insurance cover with Allstate, their long list of potential discounts can help reduce your monthly costs.

No matter where you live, you’ll be able to find coverage through Allstate and its large network of local agents. 

To find out more about Allstate, speak to one of our agents.

How Do I Know I Have the Right Amount of Homeowners Insurance?

Home insurance protects your home against damages and repairs in the event of an accident, fire, or theft. The last thing you want to be is overinsured or underinsured.

Overinsured homeowners are paying for coverage they do not need, while the underinsured may be left with substantial out-of-pocket costs if their home is damaged.

Keep these points in mind:

  • The amount of coverage you need will depend on the value of your home and possessions, and the types of risks you are facing.

  • In general, choosing a policy with high enough coverage is a good idea to cover the cost of ever having to rebuild your home from scratch.

  • One way to ensure you have the right coverage is to get a home appraisal. This will give you an accurate estimate of your home's value and help you determine how much coverage you need.

  • Another bit of advice is to work with an insurance agent with experience and industry expertise. They will be able to help you understand the different types of coverage and guide you in deciding your coverage needs.

Best for Bundling

Sample Costs
1675.2
AM Best Rating
3.7

Pros

  • The largest homeowners insurance provider in the U.S.

  • Offers policies in all 50 states.

  • Strong financial credentials and ratings.

  • Provides consumers with excellent online resources.

  • Works with local agents in most areas.

  • Very competitive home insurance rates

  • Offers bundling for home and auto insurance.

Cons

  • The availability of discounts will depend on your state.

  • Policies can’t be purchased through independent agents.

State Farm is a well-known name in the insurance industry that offers a variety of insurance products in all 50 states. Their homeowners insurance plans are considered to be a reliable and affordable choice for people looking to get comprehensive coverage.

With 100 years of insurance experience, State Farm can help anyone find an insurance plan to suit their needs. Their wide range of supplemental coverage options and discounts mean that you’ll be able to tailor your home insurance the way you want.

Because they offer other insurance products, customers can save money on insurance costs by bundling their coverage. To learn more about State Farm’s homeowners insurance, speak to one of our agents.

Should You Bundle Your Homeowners Insurance?

Bundling your homeowners insurance with other policies, such as auto or life insurance, can help you save on premiums. 

Most insurance companies offer discounts for bundling, so it's worth checking to see if you could be saving. Bundling your policies with one company can also make it easier to keep track of your coverage and submit claims.

However, comparing rates and coverage before you bundle your homeowners insurance with any other type of insurance is essential to ensure you're getting the best possible deal.

If you're considering bundling your homeowners insurance, speak to one of our agents to see if it's right for you.

Types of Homeowners Insurance

Here are some popular homeowner insurance plans:

Broad Form (Form 2) 

Broad form (Form 2) covers most perils included in a typical homeowner insurance policy. This includes your dwelling and other structures on the property you own or rent out to others for profit. However, it will only insure risks identified in the contract, which means it will only cover liabilities specifically mentioned.

Special Form (Form 3) 

Special form (Form 3) will protect your dwelling, other structures, and personal property from damage or loss. It also provides comprehensive protection if you are held liable for injuries to people while on your property. These policies will cover most situations unless they're expressly excluded from the policy.

Comprehensive Form (Form 5)

Form 5 homeowners insurance is the most extensive coverage you can get. With a comprehensive form (Form 5) plan, you can take out additional named coverage for your possessions on top of what's offered in Special Form 3.

Modified Coverage Form (Form 8)

Form 8 insurance protects older homes that may not qualify for other types of homeowners insurance. These properties pose an increased risk for insurers, so this type of insurance is ideal for people with historical or period-specific houses.

Best for Easy Claims

Sample Costs
1989
AM Best Rating
4.2

Pros

  • Offers clients a digital-first experience for applications, claims, and quotes.

  • Will donate a portion of your premiums to a charity of your choice.

  • Competitive prices compared to other insurance companies.

  • Immediate payouts on certain claim filings.

Cons

  • Doesn’t offer policies in every state.

  • Limited extra coverage options.

Lemonade aims to change the way that insurance is bought and sold in the U.S. The company offers people a fully digital experience for applying, claiming, and changing their homeowners insurance.

While Lemonade doesn’t offer insurance in every state, their competitive prices and fast claims processes make them a solid choice for people who live in the areas they cover.

An added bonus with Lemonade is that the company donates a portion of all premiums you pay each year to a charity of your choice. To find out about Lemonade’s insurance products, speak to one of our agents.

How Long Does It Take to Pay Out a Home Insurance Claim?

The time it takes to pay out a home insurance claim will vary on a case-by-case basis. The process begins with submitting a claim form and supporting documents. Once the claim has been reviewed and approved, payment is typically processed by your insurance company within a few weeks.

Keep these points in mind:

  • Depending on the complexity of your claim, it can take several weeks for the insurance company to process your request.

  • More complex claims may take longer to resolve, and the insurance company may need to hire an appraiser to assess the damage, which can lengthen the entire process.

  • In some cases, additional information may be required before making a decision. It could take months to receive a settlement if you're dealing with a major disaster, such as a house fire.

  • When it comes to insurance claims, time is of the essence. The sooner you submit your documents, the sooner your claim can be assessed.

Best for Affordable Rates

Sample Costs
1344
AM Best Rating
3.2

Pros

  • Offers homeowners insurance in all 50 states. 

  • Affordable home insurance rates.

  • Customers can file claims through their mobile app, website, or with their agent.

  • Lower than average customer complaints.

  • Lots of discounts for different types of homeowners. 

Cons

  • Coverage and discounts may vary from state to state.

  • Other competitors provide more options for insurance coverage extras.

Liberty Mutual has been offering homeowners insurance since 1912 and is the third-largest homeowners insurance company in the U.S. They offer their clients multiple ways to interact with the company through their website, mobile application, or large network of agents.

The company offers homeowners insurance in all 50 states and has a strong tradition of customer service. On top of this, Liberty Mutual also has an extensive list of discounts to help their clients save on insurance and get the most out of their coverage.

A strong financial profile and their consistent approach to providing exceptional homeowners insurance make them a great choice for anyone looking to buy insurance.

If you’d like to read up on Liberty Mutual products and services, check out our latest guide

How Do Homeowners Insurance Companies Set Premiums?

Homeowners insurance companies set premiums based on the value of your home, the type of insurance you need, the possessions you own, and a risk assessment.

The most crucial factor is the home's appraisal value, which is an estimate of the amount it would cost to replace the structure in the event of a disaster.

The type of insurance coverage also plays a role in setting premiums, as more comprehensive coverage typically costs more.

Homeowners with more valuable possessions may also pay higher premiums, as they have more to lose in case of a break-in or natural disaster.

Your credit record is another factor that may be used to set premiums. Insurance companies use credit records to help predict future claims’ costs. A good credit score means you're more likely to pay your premiums on time and file fewer claims.

Best for New Homeowners

Sample Costs
1520.28
AM Best Rating
4.3

Pros

  • One of the largest insurance providers in the country.

  • Available in most states.

  • Very affordable rates compared to other insurance companies. 

  • Strong financial credentials and ratings.

  • Offers multiple coverages and discount options.

Cons

  • Doesn’t offer homeowners insurance in Alaska, Hawaii, or Louisiana. 

  • Won’t insure certain dwellings, such as mobile or manufactured homes.

  • Excessive add-ons may increase your coverage costs.

Nationwide offers a wide range of homeowner insurance policies to residents in most states. What makes Nationwide stand out is the level of coverage and customer service they provide.

For example, Nationwide’s homeowners insurance includes additional coverage, such as ordinance or law coverage, as standard. Usually, these coverage options will cost you extra with other insurance providers.

Nationwide also allows its customers to tailor their insurance with a selection of add-ons and supplemental coverage options. Some of these add-ons include roof replacement cover, identity theft coverage, and additional valuables cover. 

Contact us today to learn more about Nationwide and its different insurance products.

What Can I Do to Lower My Home Insurance Costs?

Here are a few ways that you can lower your home insurance costs.

  • Getting an appraisal of your home's value can help you ensure you're not overpaying for insurance. Use your updated appraisal to lower your coverage requirements and monthly premiums. 

  • The type of insurance you have will also affect your rate, and switching to a less comprehensive coverage option can help to reduce your monthly costs.

  • Bundling your homeowners insurance with other insurance products, such as auto or life insurance, can help lower your overall costs if you have a single insurance provider.

  • Raising your deductible on your current homeowners plan can also help with high premiums. Remember that you'll then have to pay more out-of-pocket if there's a claim.

  • Finding a better deal and changing to a different company can help you lower your monthly costs.

What Won’t My Homeowners Insurance Cover?

Your homeowners insurance policy is designed to protect your home and personal belongings in case of a covered loss. 

However, it’s essential to know that there are some things that your policy will not cover, such as flood or earthquake damage. 

If you live in an area prone to flooding, earthquakes, or natural disasters, you'll need to purchase a separate policy to cover this risk.

Similarly, your homeowners insurance will not cover any damage caused by your own  negligence, such as that broken window that you’ve failed to maintain properly. 

Policies typically won’t cover damage caused by pests, such as termites or rodents, but such options are available. 

If you're concerned about any of these types of damages, be sure to talk to an insurance agent to see what coverage options are available.

Tips For Choosing Homeowners Insurance

With so many different policy options, it can be challenging to know how to choose the right insurance plan for your needs. 

Here are a few tips to help you choose the best homeowners insurance plan:

  • Determine the value of your home and possessions: To choose an appropriate level of coverage, you'll need to have a reasonable estimate of the total value of your home and belongings. Be sure to find out the replacement cost (what it would take to repair or replace damaged items) and their actual cash value (what the items are worth today).

  • Choose a policy with adequate liability coverage: Liability coverage protects you financially if someone is injured on your property or if you're sued for damages. Your coverage will depend on your asset's value and the likelihood of being sued. However, a good rule is to purchase at least $300,000 in liability coverage.

  • Consider additional coverage, such as flood or earthquake insurance: Homeowners insurance typically does cover floods or earthquakes, so you may need to purchase separate policies if you live in an area at risk of these natural disasters.

  • Compare rates from multiple insurers: Once you know what type and amount of coverage you need, shop around and compare rates from several insurers before selecting a policy. Remember that cost shouldn't be the only factor in your decision. You should also consider the insurer's financial stability and their customer service record.

  • See if you can bundle your other insurance products: Bundling your homeowners insurance with other types can lower your monthly premiums. You can typically bundle homeowners and auto insurance from the same company, and get discounted rates on both policies.

By following these tips, we’re confident you can find the best homeowners insurance plan. If you need help finding homeowners insurance in your area, contact one of our agents.

Terms You Should Know

Premiums: A premium is an amount homeowners pay for their insurance policy based on coverage, deductible rates, property location, and the type of home.

Deductible: A homeowners deductible is the portion of a cost they must pay before their insurance company pays any benefits.

Appraisal: An appraisal is an official estimate of a home's worth done by a qualified appraiser, which is used to calculate insurance coverage and costs.

Replacement cost: Replacement cost is the amount of money required to repair or replace your home and belongings if damaged or destroyed.

Actual cash value: Actual cash value (ACV) is a term used in homeowners insurance to describe the value of personal property in case it is damaged or destroyed.

Named peril: A named peril is an event or risk specifically outlined in a homeowner's insurance policy that their plan will cover.

Homeowners Insurance FAQs

Does my age affect home insurance?

Your age may affect your home insurance rates. Older people generally pay less for their home insurance than younger people. Insurance companies view older homeowners as more responsible and less likely to take risks.

What are three ways you can lower your homeowners insurance premium?

There are a few ways to lower your homeowners insurance premium. - Shop around and compare rates from different insurers for a better deal. - Make your home more secure by installing a security system or deadbolt locks. - Improving your credit score can help you lower your premiums in some states.

What makes home insurance go up?

Factors that can cause home insurance rates to go up include the location, value, and age of your property. Older homes are typically more vulnerable to damage from weather events, fires, and burglaries, leading to higher premiums. Areas prone to natural disasters like floods or earthquakes usually have higher rates. More expensive homes will typically have higher insurance rates than less expensive ones.

Does your credit score affect your homeowners insurance?

A good credit score may save you money on your homeowners insurance, as insurance companies may use credit scores to assess risk in some states. People with high credit scores are seen as less of a risk, so they are offered lower rates. However, it's important to remember that credit scores are just one factor insurance companies use to determine rates.

Is home insurance really necessary?

While home insurance isn't a legal requirement, there are many good reasons to get it. If your home is damaged by fire, flooding, or another covered event, your insurance policy can help to pay for the repairs. It will also provide liability protection if someone is injured on your property.

FAQ: Common Home Insurance Questions

What does home insurance cover?

Generally speaking, homeowners insurance provides overall coverage for the structure of your home. A basic policy offers coverage for damages to your home and belongings inside it for events like fires, storms, explosions, etc. There are different types of homeowners insurance policies that provide more comprehensive coverage for a wider range of events.

Am I required to have home insurance?

Technically, no. You are not legally required to have homeowners insurance however, if you have a mortgage on your home then your lender will most likely require you to have some homeowners insurance coverage in order to be approved for the loan.

How much home insurance coverage do I need?

A calculation can be done to determine how much coverage you will need based on a few different factors that indicate how at-risk your home is to be damaged.

What factors can affect my home insurance premiums?

These factors include location and weather, the value and type of personal property that you keep within your home as well as potential liability risks within your home such as pools, etc.

How can I lower the cost of my home insurance?

There are a number of ways to reduce the cost of your homeowners insurance but the first thing you can do is to shop around and compare for the best price. Policy Scout experts can help you get the right plan in the budget that works for you.
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