The Best Homeowners Insurance 2023

Finding the Best Home Insurance Provider

Home insurance is home security. That is something we truly believe. After all, your homeowners insurance policy is your best line of defense to protect your home against any number of worst case scenarios.

Just like shopping for a home security system, you should be thinking about potential disasters when you're selecting your homeowners insurance. Would you be able to rebuild if your home caught fire? What would you do if a burglar stole your valuables?

The way we look at it, you can have your cake and eat it, too. Home insurance may be required by your bank, but it’s also the smartest way to keep your property, belongings, and family safe in the event of loss.

The key is signing up for a dependable homeowners policy that will get you the right amount of coverage at the lowest possible rate.

SecureScore™

We scouted out the top homeowners insurance companies on the market, and we spent months testing them at every stage of the customer journey: from choosing coverage and getting quotes, to comparing rates and completing the claims-filing process.

At the end we awarded each home insurance company a SecureScore™. Our SecureScores are based on the six components of the home insurance experience our readers care about most:

• Affordability
• Coverage
• Customer Service
• Online Quote
• Discounts
• Bundles

Home Insurance Stats

Home Insurance Explained

What Is Homeowners Insurance?

A lot of things happen in life for no reason, and with no one really to blame. A car hits a puddle and soaks your favorite leather bag. The driver didn’t mean it. Or a gust of wind blows your hat into the river. Not the wind’s fault.

These are small incidents. At the very worst, you’ll buy a new bag and hat. You’re out 200 bucks.

State Farm offered me 40 percent off my premium for bundling auto and homeowners insurance.

But imagine if that driver was a lightning storm that knocked an oak tree through your sunroom roof. Imagine if your hat was your garage. Instead of $200, you’re out $20,000. While it’s still no one’s fault, this time you’re not going to be able to pay out of pocket. You’re going to need a little help.

That, in essence, is what a homeowners policy does. It sits quietly in your back pocket, protecting your property, possessions, and family against any future accidents.

For that peace of mind, you pay a premium (usually a monthly payment) to your home insurance provider. If disaster ever strikes, your policy jumps into action — sometimes within hours —and secures the money you need to rebuild or buy back what you lost.

Do I Need Home Insurance?

Ths short answer: yes. If you’ve taken out a mortgage, your bank or lender will most likely require a homeowners policy. This is purely self-interest, as they want to protect their investment.

But even after you’ve paid your mortgage off, you’re simply playing Russian roulette if you opt to face nature tête-à-tête. That isn’t just our expert opinion. It boils down to odds. According to the National Association of Insurance Commissioners, one in 20 homeowners files an insurance claim every year.

There are multiple bundle options available through Travelers.

If you’re one of those five percent, believe me, you’ll be grateful beyond words you took out a homeowners policy. A grease fire in your kitchen can run you between $10,000 and $20,000 in damage. Even a clogged sewer — which you’re responsible for, by the way, not the city — can cost $5,000 to unblock. These aren’t bills you’d ever want to get stuck with.

We’d be lying if we said we never once picked up our homeowners bill and thought about all the nice things we could buy with the money we spend protecting our homes from accidents that never seem to happen. A new pair of speakers for the living room, a better laptop, or a weekend getaway in Miami.

But at the end of the day, clogged sewers and fires (which break out once every 89 seconds in U.S. homes3) are just two of a long list of perils that can literally wipe out everything we’ve worked for in the blink of an eye. So the real question to ask isn’t “Do I need home insurance?”; it’s “Why would I ever want to live without it?”

What Does This Insurance Cover?

Earlier, we talked about fire and water damage. Those are just two of the “perils” standard HO-3 homeowners policies cover. Most policies will also protect you against lightning, wind and hail (usually lumped together and sometimes under a separate deductible), smoke damage, explosions, freezing, tearing or cracking, short circuits, ice and snow damage, theft, vandalism, volcanic eruption, riots, and even falling aircraft.

If you noticed the absence of floods, hurricanes, and earthquakes from that list, you have a good eye. Flood insurance is always separate. In fact, none of our top insurance companies even sell it. Hurricane and earthquake coverage are usually add-ons, or “endorsements” in the official lingo. Your insurance provider will cover you. You’ve just got to pay extra.

Geico offers several different types of insurance.

All HO-3 policies cover three main areas of your household against the covered perils listed above: your property, your possessions, and your family. Here’s a breakdown of how they do that.

Standard Coverage

Property

This is the reason you have a home insurance policy. Finding the right amount of property coverage is critical. We offer some ideas on how to approach this below. If this is your first homeowners policy, you can also read our home insurance buyer’s guide to learn all the ins and outs.

Other structures

Your HO-3 home policy covers anything you build on your property (fences, garages, gazebos, sheds, even swimming pools). Typically, insurance providers earmark 10 percent of your property coverage for additional buildings. With some providers, you can tweak this amount.

Possessions

There are two types of coverage for your belongings — actual cash value (ACV) and replacement cost value (RCV). The first gives you enough money to buy your stuff back with wear and tear figured in, so basically enough to buy your things back used.

With the second type of coverage, which is always a little more expensive, you’ll get the cash you need to buy your things back new. We’ll break ACV and RCV coverage down in more detail below. You should go through this part of your policy with a fine-tooth comb.

Lowering my rebuilding coverage lowers my Lemonade premium by $16 per month.

Personal liability

Personal liability coverage protects you in two major situations. If a guest or visitor to your property has an accident, your policy would cover the legal and medical bills, and any damage to your home, as long as the accident is covered.

But liability also works in the opposite direction. Say you’re in someone else’s house and you accidentally flood the bathroom. Personal liability coverage would have your back here, too, if you got stuck with the bill. The minimum liability coverage you’ll see is $100,000, but most experts recommend $300,000.

Medical payments to others

An extension of personal liability, medical payments to others covers doctors’ bills exclusively in the event of an accident on your property, whether you’re responsible or not.

Loss of use

If you need to vacate your house for any reason, your policy will pay for temporary lodging, food, and gas. There are some limits.

For one, you’ll usually have a cap on your expenses. Two, your insurance provider will calculate ahead of time how many days repairs should take, and that’s the time period you’ll be covered for.

Finally, if your normal living expenses are $2,000 per month, and you send a bill for $20,000, you’ll see a volcanic eruption in your living room (see covered perils above) before your insurer foots the bill for the difference.

Farmers offers tiered homeowners insurance policies.

Extra Coverage

This list varies from provider to provider, and can include all sorts of fun stuff like portable electronics coverage, insurance for your valuables, and even identity theft protection. Those are pretty self-explanatory.

Here are a few terms that may be new to you. If they appear in your quote, you should take a good look at them before you sign on the dotted line.

Additional replacement cost coverage

Whether you see additional replacement cost coverage or inflation coverage in your homeowners policy, a 10-50 percent boost to cover higher future building costs can be the difference between having the cash to build back your house and taking out another loan to do it.

Water damage

Your HO-3 policy covers you for accidental water damage (i.e., a pipe bursts out of the blue). But it won’t cover you for negligence (i.e., your roof has been leaking for years and finally drops into your TV room.) It also won’t cover you for damage from what we call a “water back-up.” This could be damage from a malfunctioning sump pump or a clogged sewer or drain. Water back-up insurance is always extra and sometimes advisable.

Service lines

Before you sweep this extra coverage aside, check out your site plan. If your property is sitting on top of a gas, power, or water line, and there’s an accident, you’re liable for repairs.

Building ordinance

Building ordinance coverage gives you extra money to rebuild to code. Even 10 percent of your total property coverage can be a big help. With many of our top providers, adding this extra protection won’t raise your premium much, so keep your eye out for it.

Equipment breakdown

Warranties for appliances cover parts and service, but they don’t cover accidents. If the HDMI slot on your Android TV starts to malfunction, and your warranty is still in effect, you can get your TV fixed for free. But if your 10-year-old spills grape juice back there, you’re in trouble. Equipment breakdown insurance is like accident insurance for your big ticket appliances, TVs included.

How Much Does Home Insurance Cost?

Ok, do you want the blue pill or the red pill?

“Matrix” references aside, homeowners insurance rates really are a huge can of worms. But if you’re shopping for an insurance policy you’ll keep for years — and want to make the most informed decision possible — you should get your hands at least a little dirty. We’ll try to make this as painless as possible.

Where you live plays a role in your homeowners premium

First of all, your state, area, and even neighborhood can affect your home insurance premium.

To give a very stereotypical example, a house in the Outer Banks of North Carolina, where hurricanes are seasonal events, would likely be more expensive to insure than a house 400 miles inland in Charlotte.

If we drill down a little further and take that house in Charlotte and place it in a low-crime neighborhood, it will probably be cheaper to insure than a home in a neighborhood where burglary is rampant.

Finally, if our house in the safe Charlotte neighborhood happens to be two blocks away from a fire station, and has monitored fire and smoke alarms, statistics say it would be cheaper to protect than a house even a mile further away.

Location, as they say, is everything.

The market value of your home can influence your home insurance rates

Every few years, the NAIC publishes a juicy 193-page document with a name so long you can’t fit it in a paragraph.5 It’s our insurance source-of-truth. In this massive doc, you can find useful information, like how much the average home costs to insure in Alaska ($823 if you’re wondering.)

When we say average, by the way, we mean a 1,800 sq. ft. house worth between $200,000 and $290,000 and built between 1985 and 1995. But, obviously, not every home falls within that size, price, or age range. Which is another reason it’s impossible to generalize rates even within a single category like market value. A quick glance at the NAIC’s insurance doc will illustrate this. Since we were in North Carolina a paragraph back, let’s stay there.

The average homeowners policy in this state costs $1,103 per year, according to the NAIC — unless you live in a house worth less than $50,000. In that case, you’d be looking at a $340 bill. If you lived in a home worth $500,000 or more, on the other hand, your bill would be closer to $2,125.

See the pattern? More expensive homes have higher premiums.

There are a few ways to save with USAA

That’s why when we’re giving advice about rates, we always err on the side of research. Before you talk to an agent, explore the average rates in your area. That’s one way to protect yourself against overstuffed premiums. The other way?

Look into your home’s condition.

Insurers take your home’s age and condition (especially the roof, HVAC system, and windows) into account when calculating your HO-3 premium

This is a true story. I was trying to get a quote from Liberty Mutual for a home in Iowa (not a real quote, a test). For some reason, the quote generator wouldn’t spit out a figure. When I asked an agent about it (her name was Shauna and she was great), she told me the reason: The roof on that house was just too old. Liberty Mutual simply wouldn’t insure it.

You’ll see when you go through the process of gathering quotes yourself that insurers will ask for a lot of information about your home. They’re not being nosy’ they’re just trying to get a handle on the potential risk involved in insuring your property.

The major factors are: roof materials and age; wiring, heating and plumbing; fixtures and floors; protective devices like locks, leak sensors, and fire, smoke, and burglar alarms; and how many additional structures you have on the property.

Which is why, if you are in the process of insuring a new home, it makes sense to vamp up home security and upgrade aging HVAC systems before you apply for a premium. You’ll likely get a better rate for having a safer, less accident-prone home.

Your credit score may be a factor in your home insurance rate

Most insurers do use your credit score to gauge your risk as a customer, and they charge higher-risk policyholders more (155 percent more by some estimates), but not in the way you might think.

Underwriters don’t throw your credit score into a pot and pull out a premium. Instead, they focus on specific elements of your credit score that they consider to be reliable indicators of your future behavior as a homeowner. They assign a value to those components and that becomes your “credit-based insurance score.”

Insurance companies started using credit-based insurance scores a few decades ago after they realized that underwriters looking at credit scores alone were having trouble making objective judgments. Basically, with the old system, they had to make educated guesses about your likelihood to default on payments, maintain your home, and file claims, which weren’t always accurate.

Credit-based insurance scores aren’t universal, however. California, Maryland, Massachusetts, and Washington have banned insurance companies from using any part of your credit score to set your premium.

How much property coverage do I need?

Property coverage, aka dwelling coverage, is many things. It’s the heart of your home insurance policy. It’s the cash you’ll get to rebuild after a disaster. It’s probably also the highest amount of coverage you have.

My quote from Progressive’s Homesite came out to about $143 per month.

But it isn’t your home’s market value. You need to understand this from the get-go because insuring your $350,000 home for $350,000 might put you in hot water if you ever need to rebuild. (Building costs go up year to year, and demand fluctuates.) An aging home you bought for $350,000 in 2016, might cost $500,000 to rebuild to code in 2024.

To arrive at a safer figure for your dwelling coverage, you need to get a handle on two basic factors: the size of your home (square footage) and local construction rates. Here’s how to get started.

Calculate the size of your home

Many of us already know how big our houses are, or at least have a ballpark figure we can use to estimate building costs. If you don’t, a phone call to your local tax assessor’s office is usually all it takes to get that info.

If you prefer a more hands-on approach, you can always whip out the measuring tape and go room to room. (Actually, you don’t even need measuring tape these days. There are a bunch of free smartphone apps that will get the job done.) This way you’ll also have up-to-date measurements.

Of course, if none of that is working for you, you can always hire an appraiser. When you consider how many thousands of dollars you’ll be pouring into a rebuild, $100-$200 for an accurate floor plan is a pretty modest investment.

Once you have your square footage in hand, you’re ready for the next step.

Estimate building costs

First, a disclaimer. Just like average homeowners rates — which fluctuate depending on where you live and what kind of house you own— building costs will vary.

According to the National Association of Home Builders, construction costs for a $296,650 home were $114 per square foot in 2019.6 (In 2011, they were $80, by the way, so you can see how much those rates change.)

But that doesn’t mean your home will cost $114 per square foot to rebuild. It’s just a ballpark figure to get your bearings by. That’s why talking to a local agent is always an excellent idea because they know the going rates in your area better than anyone else.

We’re not saying that AI quote generators aren’t smart. Lemonade has a great one. So does Travelers. We’re just saying they aren’t Shauna from Davenport, Iowa, the Liberty Mutual agent who’s been on 400 construction sites and knows the names of every contractor in town.

Multiply your home’s square footage by your local construction costs

Once you have those rebuilding rates, and you know your home’s square footage, just multiply the two numbers. So, for example, a 2,700 square-foot home that costs $114 per square foot to rebuild would give us $307,800.

That wasn’t so bad, was it? If you’re wondering where inflation protection figures into the equation, that’s an excellent question. Read on.

Do I need inflation protection?

We recommend some form of coverage to protect against higher future building costs, whether it’s additional replacement cost coverage (we discussed this a few paragraphs ago), or inflation protection. The reason is simple: over time building costs go up, rarely down.

When we were calculating contractors’ costs above, for example, we saw how between 2011 and 2019 — eight short years — construction rates shot up by $34 per square foot. A home you built in 2011, in other words, would cost 30 percent more to rebuild in 2019.

So definitely consider tucking away between 20-50 percent extra to rebuild down the line. Saving a few bucks a month on your premium might make you happier today, but that kind of savings just isn’t worth risking your entire home over.

Farmers offers a huge list of different insurance types.

What’s the difference between actual cost value and replacement cost value coverage?

Before we get into the nitty gritty of belongings coverage, a word to the wise.

If you’re shopping for homeowners insurance for the first time, or you’re preparing to switch insurers, and you haven’t made an inventory of what you own, cancel your trip to the park this Sunday and pencil in a few hours of “time with my stuff.”

Go room to room and write down what you’d want to get back in the worst- case scenario. Pro-Ject turntable? Check. Salvation Army reclining chair? Maybe you can leave that one off the list.

Keep in mind that really expensive things, like cameras, artwork, laptops, and jewelry, might require extra insurance. Coverage limits vary from provider to provider.

But back to choosing your belongings’ coverage: Do you want ACV or RCV?

Actual cash value explained

Let’s use our Pro-Ject turntable from above as an example.

If I bought my turntable in 2018 for $450, its value today would be less. In fact, used hi-fi usually depreciates by 50-60 percent once you carry it home.

So the actual cash value of my $450 turntable would be between $225 and $270. With ACV coverage, that’s the amount I’d get to buy it back if mine was stolen. Not great, right? Actually, it’s even worse.

My Pro-Ject turntable might not even cost $450 to buy new. That was 2018. The price in 2024 (when I lose it) might be $550. Then what?

Then I wish I’d invested in RVC coverage.

Replacement cost value coverage explained

RCV coverage will nudge your monthly premium up a bit, but it can be worth it.

Again, take the Pro-Ject turntable I bought in 2018. If I lose it in a burglary in 2024, instead of getting a check for $225 (enough to buy one off Craigslist), I’d get $450, or whatever it costs to buy it back new at the time I lose it.

Of course, reimbursements don’t happen by magic. There’s a process behind them, and documentation is key, especially in a burglary when things disappear. (You can’t tell the insurance inspector that you had a green Lamborghini sitting in your living room and ask for $250,000 to replace it if you have no proof that it existed.)

But if you take inventory, make sure you have enough coverage for your more expensive belongings, and go with RCV coverage, you will eventually get your things back pretty much as they were before.

Final Thoughts

All right, you’ve reached the end of this guide! But the story doesn’t end here. Check back from time to time because we’re constantly updating and expanding our content to keep up with the latest developments in the homeowners insurance market.

Home Insurance FAQs