Cheapest home insurance companies

Finding the right balance between low prices and quality

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Homeowners insurance is much more expensive than renters insurance, which costs between $14 and $30 per month. With average annual premiums of around $1,900 for homeowners insurance, you might be looking for cheaper options.

We’ve identified the cheapest home insurance companies and those with the best available features. We also considered financial strength when choosing the five cheapest home insurance companies available today.


Key insights

Our top choices include established insurance companies and some lesser-known alternatives.

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Along with low rates, financial strength and availability are important factors.

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Homeowners insurance rates can vary significantly depending on your home’s value and state of residence.

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Our top 5 picks for cheap home insurance

When selecting our top choices for cheap home insurance, we focused on more than the monthly premium. Our picks offer discounts, are widely available and have a strong financial rating. No company is perfect, but these insurers have much to offer at reasonable prices.

  • Lemonade
  • Pacific Specialty Insurance
  • Liberty Mutual Insurance
  • The Hartford Homeowners Insurance
  • Farmers Homeowners Insurance
Available discounts
Protective devices, bundling
AM Best Rating
N/A
Availability
23 states and Washington, D.C.

Lemonade is our top choice for cheap homeowners insurance because it uses artificial intelligence to streamline the process of insuring your home. You can get a quote or file a claim instantly through the Lemonade app.

According to the app’s description in Google Play, you’ll be paid in as little as three seconds if your claim is instantly approved. It also notes that you can easily adjust your policy through the app.

While Lemonade doesn’t offer as many discounts as some competitors, it offers discounts for protective devices and bundling. While AM Best hasn’t rated its financial strength, it rates its financial outlook as “stable.”

Reviewers appreciate how quickly Lemonade processes claims. It uses AI to process claims significantly faster than other companies. Reviewers also like how simple and easy the Lemonade app is to use.

“They made filing a claim easy and walked me throughout the entire process,” said Juan from Texas. “From filing to getting a settlement took less than a week and everything was explained and taken care of quickly.”

Available discounts
Bundling, gated community, security systems, new home, tile roof
AM Best Rating
A- (Excellent)
Availability
All 50 states and Washington, D.C.

Homeowners insurance from Pacific Specialty Insurance Company is available in all 50 U.S. states and Washington, D.C. The company has competitive rates and a slew of discounts that can make it even cheaper. In addition to standard home insurance policies, the company offers flood and earthquake policies.

Another thing we like about Pacific Speciality is that it offers flexible payment options. For instance, deductibles range from $500 to $5,000, allowing you to make the best choice for your budget.

Our reviewers like that Pacific Speciality processes claims quickly and in a straightforward manner. They also appreciate that customer service is courteous, professional and willing to help resolve issues.

“I have had several positive experiences with Pacific Specialty Insurance,” said Jerry from Colorado. “When the hail storm hit, the claim was paid. It was as simple as that.” Jerry added that several of his neighbors who haven’t been happy with their homeowners insurance use more popular companies.

Available discounts
Multipolicy, claims-free, newly purchased home, new roof, insured to value, autopay, online purchase
AM Best Rating
A (Excellent)
Availability
Nationwide

Liberty Mutual offers a wide range of coverage options, including home, condo, mobile home, landlord, flood and umbrella insurance policies. If you opt for more than one policy, it’s possible to bundle and save money. Several other discounts are available, like those for new and newly purchased homes, safe homeowners and those with no recent claims.

Liberty Mutual has a long history, having been in business since 1912. It is also the fifth-largest property and casualty insurer worldwide. These factors, combined with its A rating from AM Best, mean customers can feel good about the company’s financial security.

Our reviewers like Liberty Mutual’s customer service, saying representatives go above and beyond to find the best policy for your needs. They say it’s easy to do business with the company and that it has good rates and coverage options.

“I've had all good experiences so far. Everything about the company is positive,” said Tara from Connecticut. “Their customer service is good. Easy to do business with, good rates and good coverage too.”

Available discounts
Fire protection, retiree credits, home security system, bundling, claim-free
AM Best Rating
A+ (Superior)
Availability
Not available in Florida

In addition to its competitive rates, The Hartford offers several add-on coverages, such as personal liability, identity theft and equipment breakdown coverage. This allows you to protect your home and everything it contains.

The Hartford also makes filing a claim as easy as possible, with specialists available 24/7. The company ranked #1 in customer satisfaction in the J.D. Power 2022 U.S. Property Claims Satisfaction Study.

Customers have had good experience with The Hartford’s customer service, saying representatives are friendly and helpful. They also say The Hartford is helpful when they need to file a claim.

“We are very happy with our homeowners insurance company,” said Karen from Iowa. “They help us, whether it be a claim, a question on a bill. Or just making sure we have the right coverage for our needs.”

Available discounts
Multipolicy, multiline, paperless, new home, protective devices, claims-free
AM Best Rating
A (Excellent)
Availability
41 states

We like that Farmers has a large network of local agents, making it easy to get help from someone in person. The company offers a wide range of coverage options and discounts to help you save, including bundling and discounts for specific professions.

Farmers home insurance is available in most U.S. states, though it has exited the insurance business in some states recently. For instance, the company is no longer insuring homes in Florida.

Our reviewers say Farmers has professional agents who are knowledgeable and always willing to step in to help. They praise agents for the support they provide during the claims process, saying they have no problems getting help whenever they need it.

“I was recently involved in an accident where I was injured as the passenger and the driver was at fault,” said Leni from Tennessee. “Jennifer was my agent and arranged the liability coverage for my claim. She was professional and courteous. Her knowledge of what I needed was excellent.”

How much is homeowners insurance?

The cost of homeowners insurance can vary widely depending on the value of the home and where you live. For instance, a quote from Farmers shows a $500,000 home in Chicago, Illinois, would cost about $1,400 per year to insure, while a $200,000 home in Springfield, Illinois, would cost about $1,100.

Each state has different policies and laws, which can greatly affect the cost. Check several quotes to find the best rates available for your home’s value and location.

» COMPARE: Best homeowners insurance companies

Factors that impact home insurance costs

There are many factors that can affect the cost of home insurance. These are some of the key factors that affect the cost:

  • Location: Different locations can vary in construction costs and extreme weather risks, affecting insurance premiums.
  • Age of home and replacement cost: Older homes and those with a higher replacement cost are more expensive to insure.
  • Credit score: Your premium may be lower if you have a good credit score.
  • Safety features and discounts: Homes with safety features like security systems and smoke alarms are often cheaper to insure. Many insurers offer several other discounts, like bundling and new homeowner discounts.

Understanding home insurance and how it is calculated can be tricky. While giving rough estimates of home insurance costs is possible, each quote will vary depending on the insurer and how it calculates rates.

How to save on homeowners insurance

Homeowners insurance is a significant expense, but there are numerous ways to save money on your premiums. Ways to save include:

  • Multipolicy discounts: Bundling home insurance with auto insurance or other policies typically means you’ll pay less than you’d pay for each policy separately.
  • Home security: Increase your home safety with security systems, fire prevention and other measures for a discount.
  • Increase your deductible: Some insurers will let you increase your deductible, meaning you’ll pay more out of pocket before your policy kicks in. This can be cheaper in some cases, like if you have a newer home in a safe area.
  • Improve your credit: While improving your credit isn’t an overnight fix, it can lower your monthly premium.

Even if you think your policy is inexpensive, you might still be able to find a cheaper policy elsewhere. It might be worth shopping around and comparing rates to see which insurers are the most affordable.

» LEARN: How to save on homeowners insurance

What does homeowners insurance cover?

Homeowners insurance covers many things, such as damage to the home from a fire, storms, or vandalism. However, it’s important to note that flooding isn’t covered unless you have a separate flood policy. Other common coverages include personal belongings, liability and detached structures like sheds and garages.

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FAQ

How does my deductible affect my insurance premiums?

Your deductible typically moves in the opposite direction as your premium. In other words, a higher deductible means a lower monthly premium, while a lower deductible means a higher premium.

Does my credit score affect my homeowners insurance rates?

While this can vary by state, your credit score typically has a significant impact on your homeowners insurance rates. However, in certain states, the use of credit scores in setting homeowners insurance premiums is prohibited.

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

Actual cash value is how much the home is worth today, including depreciation. Replacement cost is how much it would cost to replace your property, including personal belongings, without factoring in depreciation.

How often should I review my homeowners insurance policy?

Most experts recommend reviewing your homeowners policy once per year. This allows you to account for life changes like marriage or having children, as well as any market fluctuations, which can affect rates.

Bottom line

Homeowners insurance is a significant expense, but several companies offer competitive rates and great value. Our top pick for cheap homeowners insurance is Lemonade, thanks to its affordable premiums and streamlined quotes.

When choosing a homeowners insurance policy, consider rates, strong financial rates, broad availability and available discounts. To find the best choice for your home, you’ll need to consider your location, home value and specific needs.


Article sources

ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:

  1. AM Best, “Best’s Review.” Accessed May 3, 2024.
  2. AM Best, “AM Best Affirms Credit Ratings of Liberty Mutual Holding Company Inc. and Its Subsidiaries.” Accessed May 3, 2024.
  3. AM Best, “Hartford Fire Insurance Company.” Accessed May 3, 2024.
  4. WFLA News Channel 8, “Slide acquires all Farmers Insurance homeowner policies in Florida.” Accessed May 3, 2024.
  5. National Conference of State Legislatures, “States Consider Limits on Insurers’ Use of Consumer Credit Info.” Accessed May 3, 2024.
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