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A home is one of the most significant investments you’ll likely make in your life, and naturally, you’ll want to protect it. That’s where homeowners insurance comes into play. Most homeowners insurance companies offer the same basic coverage. Still, some companies are one step ahead in customer service and provide more extensive coverage at a better value than others.
If you’re shopping for homeowners insurance, you’ll want an insurer with affordable rates, good customer service, and quality coverage. If you don’t know what to look for in a home insurance provider, you might end up paying more for inadequate coverage.
To help you find a homeowners policy that works for you, NextAdvisor looked at over a dozen insurance companies and took into consideration their financial ratings, customer service and claims satisfaction ratings, discounts, and additional coverage options.
Based on our research, here are the homeowners insurance companies that we think stand out in 2021.
Our Picks for the Best Home Insurance Companies
Established nearly 100 years ago, Nationwide has become one of the largest insurance companies on the market, offering coverage in all 50 states. The company is well known for its auto insurance policies, but it also offers a variety of home and life insurance products. Nationwide’s broad range of policies in home, auto, and life allow you to consolidate your coverage with the same brand while getting policy discounts — and when it comes to discounts, Nationwide is your best bet. It offers eight different discounts for homeowners insurance, making it relatively easy to reduce your insurance premiums.
Average annual premium for a $250K dwelling: $1,042
Nationwide Coverage Types
Nationwide Home Insurance Discounts
Travelers isn’t the biggest player in the auto insurance space, but it is mighty when it comes to homeowners insurance.
Not only does the company offer all the basic protections for a home, but it also offers home insurance policies for eco-conscious homeowners and plenty of optional add-ons. It offers a 5% green home discount and green home coverage, which provides extra protection for the use of green materials when rebuilding after a covered incident. In addition to its green home discount, it also offers several other policy discounts. For example, you can save up to 12% on average on home insurance when you have an auto policy and three other policies with Travelers, according to its website.
Travelers’ home insurance policies tend to be competitively priced. Travelers’ average annual premium costs $1,269, slightly below the national average of $1,312, according to Bankrate data.
Average annual premium for a $250K dwelling: $1,269
Travelers Coverage Types
Travelers Home Insurance Discounts
Founded in 1937, Progressive is the third-largest insurance provider, holding 12.2% of the U.S. overall insurance market, behind Geico and State Farm. The Ohio-based company offers 34 insurance products, as well as a personal loan program.
Progressive gets high marks for some of the most innovative insurance technology and online resources of any provider. It’s one of the few companies that mostly uses online tools to offer its pool of services.
Progressive home insurance is fairly basic in terms of coverage, but the company offers more than five homeowners insurance discounts and extra ways to save on your policy’s cost. For example, you can save an average of 5% when you bundle homes and auto insurance with Progressive. Progressive also has a HomeQuote Explorer tool that lets you compare Progressive’s rates with some of its biggest competitors. The average cost of home insurance with Progressive is the lowest among our top picks, at $1,026.
Average annual premium for a $250K dwelling: $1,026
Progressive Coverage Types
Progressive Home Insurance Discounts
Honorable Mentions for the Best Home Insurance Companies
USAA has been providing auto, life, homeowners, health, and property insurance exclusively to active duty military, veterans, and their families since 1922. While it’s not available to civilians who have never served, USAA still serves more than 13 million members nationwide and has a strong reputation for financial stability, customer service, and claims satisfaction.
USAA homeowners insurance offers all the standard protections, including coverage for fire, theft, vandalism, or weather-related events, and even helps cover liability costs and identity theft losses. According to the latest Bankrate data, the average annual premium from USAA for a $250,000 dwelling is $992, which is cheap compared to the national average of $1,312.
Average annual premium for $250K dwelling: $992
USAA Coverage Types
USAA Home Insurance Discounts
Best Home Insurance Companies of 2021 Summary
|Insurance Company||Average Annual Premium for $250K Dwelling||J.D. Power Customer Satisfaction Score, 2020||A.M. Best Rating, 2020||States Available|
|USAA (Honorable Mention)||$992||889||A++||50|
Bundling your homeowners policy with other insurance policies with the same company is an easy way to save money and offers the convenience of one bill and minimal paperwork. It can lead to a sizable policy discount, up to 25% off with certain insurers like Allstate and GEICO, plus other perks like single deductible claims if your home and car sustain a covered loss.
But there are instances where using two separate providers could still be cheaper, so it’s always a good idea to shop around for unbundled quotes and bundled quotes to compare. For example, customers only save an average of 4% when they bundle home and auto insurance with Progressive.
According to J.D. Power, homeowners insurance customers have a significantly higher bundling rate, and they’re likely to stick with the same company for twice as long compared to customers who only carry auto insurance.
If you’re set on the idea of bundling, look for companies that underwrite multiple policies themselves. Most popular insurance companies offer the option to bundle but some insurers will package policies from multiple different companies as a “bundle” with discounted rates. While the savings may be worth it, it may prove to be a headache when it’s time to make updates to your policy or file a claim because you’ll have to speak to two different insurers.
“That’s important to pay attention to because you could have two claims with two different companies and they’re not speaking to each other,” says Ken Gregg, CEO and president of Orion180, a home insurance provider based in Florida.
How to Choose the Best Home Insurance Provider
Picking an insurer can prove challenging if you don’t know what to look for or where to start. When shopping for a home insurance provider, here’s a checklist of things you should do.
To determine our picks for the best home insurance companies, we started with a list of 25 of the largest home insurance companies by premiums collected, based on data from the National Association of Insurance Commissioners. From there, we applied a series of filters to narrow the field across key categories like cost, availability, and customer satisfaction.
For starters, all our top picks must be universally available to all consumers in at least 40 states. Our top picks all offer at least three discount programs, which are key to lowering premiums. To gauge affordability, we looked at Bankrate’s average annual premium across these carriers and eliminated any with an average yearly cost of more than $1,300 for a home with a dwelling coverage amount of $250,000, which represents a mid-range home. (Bankrate, like NextAdvisor, is owned by Red Ventures.) Next, we looked at J.D. Power’s 2020 U.S. Home Insurance Customer Satisfaction Study, and ruled out any companies that scored below 800 on a 1,000-point scale (the industry average was 823).
Finally, we looked at each insurance company’s A.M. Best rating, which evaluates a company’s financial standing. Financial solidity matters for insurance companies because their customers depend on them to pay their claims if they’re in an accident or experience an insured loss. In other words, an insurance company that has the wherewithal to stay in business is more dependable in the long term. We ruled out any company that doesn’t have A.M. Best’s rating of A+ or higher. We also eliminated any companies that are involved in any active fraud investigations.
This content was originally published here.