Choosing the Best Homeowners Insurance Company
PriceIn order to get the most accurate estimate of what your homeowners insurance will cost, I recommend utilizing the online quote tools found on the insurer’s website or the comparison tool I included at the top.
To give you an idea of what insurance prices look like from some of the best insurance providers, I got a quote for a home in a Chicago suburb.
These are the monthly quotes I received:
Amica: $75.33
State Farm: $117.75
Liberty Mutual: $129
Farmers: $150
Amica came out to be considerably cheaper than the next provider in this scenario.
Each homeowners insurance company asks for slightly different information, but as I went through each online tool I used the same profile with the following characteristics:
Location: Address located in a Chicago suburb
Home Value: $315,000
Deductible: $1,000
Size: 1,900 square feet
Applicant Age: 40
Home Type: 1 story
Roof Type: Asphalt shingle
Payment Terms: Monthly
The great thing about online tools is that you determine the exact type of coverage you want, select the level of your deductible, and choose the payment terms. It might take a little extra legwork, but online quote tools really do put the power in your hands to find the cheapest policy.
Many online tools, like the one provided by Liberty Mutual, enable you to modify the coverage levels you select, so you can clearly see how changing one component directly impacts the price of your policy. (For example, you could enter a low value for your deductible, see what your rates look like, then enter a high value and see how your rates changed.)
Homeowners Insurance Discounts
All of the best homeowners insurance companies offer a variety of discounts. If you fail to take advantage of these discounts, you’re just leaving money on the table. To give you one example, if you took advantage of a multi-policy discount and bundled the same State Farm home insurance policy quoted above with an auto insurance policy, your monthly rate would drop from $117.75 to $76.50. That’s almost $500 in savings per year!When it comes to discounts, Liberty Mutual is one of the most competitive providers.
Some of their discounts include:
Multiple-policy Discount: Available if you have an auto, life, or other type of insurance policy with the same provider.
Protective Device Discount Available if you have a home security system, sprinkler systems, fire alarms, or other security devices in your home.
Claim-Free Discount: Available if you haven’t filed a claim over a certain period of time.
Exclusive Group Savings Available if you have membership or affiliation with certain businesses or organizations. Liberty Mutual’s group savings network includes more than 14,000 employers, alumni associations, and professional associations.
Newly Purchased Home: Available if you recently purchased your home.
New/Renovated Home Available if you recently renovated your home.
Early Shopper Discount: Available if you request a quote before your current policy expires.
Insured to Value Discount: Available when you insure up to 100% of the cost to replace your home.
Take advantage of Liberty Mutual’s discounts by completing an online quote on their website.
The best homeowners insurance companies offer a high number of discounts, helping you keep your premium low. If you’re unhappy with your current policy or feel like you’re paying too much, you can always get a quote with a new provider that offers discounts that better match your profile.
Selecting an insurance company that maps to your discount profile can result in major savings.
Claims
The circumstances that surround filing a home insurance claim have the potential to make the whole ordeal quite stressful. When your home has been damaged, the last thing you want to do is go to battle with an insurance company that you’ve been making payments to for the last several years.
Based on data from studies conducted by J.D. Power and Associates and ConsumerReports.org, when it comes to filing a claim there is a clear distinction between the different insurance companies. The company that excelled in both studies was Amica Mutual.
Amica achieved the highest numerical score across all categories in the J.D. Power 2014 U.S. Household Insurance and Bundling Study. These six categories measure factors like Overall Satisfaction, Price, Policy Offerings, Claims, and other characteristics fundamental to quality homeowners insurance.
Amica also ranked at the top of Consumer Reports’ homeowners insurance ratings. This study measures existing customers’ satisfaction with agent availability, the dollar estimate received when damages occur, and timely payment by the insurer.
In the event that you do need to file a claim, it’s comforting to know you can easily contact your agent, be treated fairly, and get the money you need to make repairs quickly. Ranking exceptionally well in separate studies conducted by two of the most reputable companies is a good indicator that Amica is doing something right.
(As a side note, the other insurance provider that ranked well in both studies is USAA. However, a major drawback of USAA is that membership is limited to those with military affiliation. If you, your spouse, or one of your parents have served in the military, USAA is definitely worth looking into.)
Homeowners Insurance Rates by State
As previously discussed, in order to be fully covered against disaster, you’ll need plenty of added endorsements, increased coverage limits, and (potentially) an extra flood insurance policy. All of these things could significantly increase your annual premiums above the original “sticker price.” While it may be tempting to cut corners to save some of those costs at the onset, the financial ramifications of not having adequate coverage when you need it could be severe. The trick of shopping for home insurance then becomes finding the best policy at the best price. You don’t want to overpay, but you also want to be protected, which might mean preparing to pay more than initially planned.In order to help you plan your finances accordingly, we’ve created the following interactive map to use as a reference tool when doing your research. With it, you can view the average monthly and annual home insurance rates for each state, and also how they compare to the national average. For the most current rates in your area, check with your insurance agency locally or online.
Risk Factors
There are any number of risk factors that can quickly raise your insurance premiums. Some of them are completely in your control, with active steps you can take to eliminate the risk and lower your costs. Others are beyond your control, such as crime and weather. However, even for those factors that aren’t preventable, there are steps you can take to either reduce your risk or minimize the eventual damage. Those simple steps could be enough to reduce your premiums.
Pets
As mentioned earlier, certain dog breeds with a reputation for being aggressive can be more expensive, or impossible, to insure. Some companies base their decisions on a dog’s history of aggression. Others will deny coverage based on breed. The simplest solution to reduce this risk is to avoid owning any dog blacklisted by your insurer. For those companies that will still insure, but at a higher rate, you may be able to reduce that premium by completing an approved training and socialization program.
Swimming Pools
Because of the drowning risks both to your family and anyone visiting your property (invited or otherwise), a pool will significantly increase your home insurance premium. Securing your pool with its own fence, installing self-locking gates, and having safety equipment readily accessible may be enough to lower your risk in the eyes of an insurance company. However, the best way to avoid the higher premiums is avoid installing a pool at all. The money saved on the insurance may even be enough for a gym or private pool membership, a place where someone else assumes all of the financial risk.
Trampolines
Along with pools, trampolines make up what insurance companies refer to as “attractive nuisances.” Their fun, but the risks involved make them a headache to insure. You can reduce your personal injury risk by installing a net around your trampoline, but it won’t be enough to lower your premium. The easiest way to do that is to invest in safer recreational yard equipment instead.
Fire Protection
It may take some research to find it, but all area have a fire protection rating based on how far it is from a water source and the distance to a responding fire department. If a fire where to break out in your home, a poor fire protection rating increases the chances of total property loss, which in turn increases your insurance premiums. Fire protection systems wouldn’t be sufficient to decrease your premiums in that case, but installing a sprinkler system could. It’s a costly solution, but one that could pay off in the long run.
Neighborhood Crime
Even if you did your research when home shopping and chose a neighborhood with low or non-existent crime rates, you can never prevent all crime. Your home is stationary, but criminals aren’t. However, simple steps like adding an alarm system or deadbolts will not only make your home safer, it may also make it cheaper to insure.
Personal Claim Frequency
If you have a history of filing home insurance claims, you’re immediately flagged as a potential liability to your insurer. If you’ve had a lot of accidents with previous insurers chances are you’ll be filing a claim at some point with the new one. As such, you can expect a higher premium. The easiest way to reduce this risk is to be a responsible homeowner. Preventative maintenance and proper safety measures can go a long way toward minimizing your claims and your premiums.
Location Claim History
While you can control your personal claim history, there’s less you can do to control your location claim history. As seen on our interactive map, insurers charge a higher rate in states that a regularly victims of weather disasters. The same is also true of areas frequented by burglaries. While there’s nothing you can do to prevent weather and crime, you can take steps to reduce your personal claims history while living in an area with a higher one. Proper weather preparedness and home security systems could make the difference between your neighbor filing a claim and you avoiding one. It may not reduce your premiums at the onset, but over time you could establish yourself as a responsible homeowner and see your rates drop.
