How to Find Affordable Homeowners Insurance Rates From Quality Companies

The Cheapest Home Insurance Companies in 2021

Changing homeowners insurance companies could save you as much as $300 per year. MoneyGeek found that the cheapest insurance company on average is Allstate, but the cheapest for you may depend on your location and how much coverage you want.

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Cost is not the only consideration you should have when shopping for homeowners insurance, but comparing quotes across multiple quality companies can help you save on your monthly bill.

To help you find the best rates, MoneyGeek researched average premiums for various dwelling coverages levels and individual home insurance needs. Insurance rates vary from company to company and state to state, so it is important to find the profile that best fits your needs and then get your own quote.

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Key Takeaways

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MoneyGeek found that Allstate is the cheapest home insurance company on a national level.

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But where you live matters. Travelers isn't the cheapest company nationally, but it's the cheapest in the most states.

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Other factors matter too. For instance, the cheapest home insurance company on average for those with a poor credit was Nationwide.

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Cheap Homeowners Insurance: Which Companies Are Cheapest in 2021?

MoneyGeek's research found that Allstate has the lowest average insurance rates based on our chosen criteria, coming in at $1,748 annually. With rates just $13 more expensive, Chubb is not far behind.

Our analysis shows that an identical homeowner can be charged almost $300 more per year by the most expensive insurer (Farmers) compared to the cheapest. To ensure apples-to-apples comparisons, these rates are based on dwelling coverage of $250,000 and personal property coverage of $100,000. For those who need a comparison that fits their home rebuilding cost, MoneyGeek also identified the cheapest companies by dwelling coverage.

However, it is important to note that your insurance rates could vary significantly from the average premiums listed. Insurers determine pricing for each policy based on various factors, including the location and age of your home.

Average Annual Home Insurance Costs

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Cheap Homeowners Insurance in Your State

When it comes to insurance costs, location is one of the most significant factors impacting your rates. Weather events and associated issues are the cause of many home insurance claims, which means that the wildfires that ravage California each year and the hurricanes that hit Florida drive up insurance costs in those states. Weather doesn’t have to be directly responsible for damage to cause your rates to increase. For example, areas that are prone to humidity are likely to see higher rates because of potential mold damage.

One of the best ways to find cheap home insurance is to compare quotes from multiple insurance companies. The data tables below show the most affordable insurance company in each state for three different dwelling coverage levels:

  • $100,000 in dwelling coverage
  • $250,000 in dwelling coverage
  • $500,000 in dwelling coverage

If you're shopping for a policy with $100,000 in dwelling coverage, MoneyGeek found that Travelers is most frequently the cheapest company, followed by Chubb. Click your state below to learn more about rates where you live.

Cheapest by State: $100K Dwelling Coverage

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If you're shopping for a policy with $250,000 in dwelling coverage, Travelers is once again the most frequently affordable, followed by Allstate. However, 13 different companies were the cheapest option in at least one state, showing the importance of local factors in affecting home insurance rates.

Cheapest by State: $250K Dwelling Coverage

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If you're looking for more expensive policies with $500,000 in dwelling coverage, Allstate is actually the cheapest option in most states. In fact, Allstate is cheapest in 15 states. The runner-up, USAA, is the cheapest option on average in nine states, but it's only available to military families.

Cheapest by State: $500K Dwelling Coverage

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Cheap Home Insurance by Dwelling Coverage Amount

Dwelling coverage is the portion of your insurance policy that pays to repair or rebuild your home’s physical structure in the event of a covered loss. Your dwelling coverage only includes the cost to rebuild your home, not the value of your land.

MoneyGeek found that Allstate is the cheapest widely available insurance company for two of the more common dwelling coverage levels: $250,000 and $500,000. For all other coverage levels, Chubb is the cheapest on average, especially for expensive homes.

If you have a military background, you should get a quote with USAA. It was one of the cheapest home insurance companies across all dwelling coverage levels.

Annual Home Insurance Rates by Dwelling Coverage
Company
Dwelling Coverage $100,000
Dwelling Coverage $250,000
Dwelling Coverage $500,000
Dwelling Coverage $750,000
Dwelling Coverage $1,000,000
Dwelling Coverage $2,000,000
Dwelling Coverage $3,000,000

Allstate

$1,086

$1,748

$2,953

$4,180

$5,437

$9,925

$14,414

Chubb

$706

$1,761

$3,069

$4,153

$5,222

$9,558

$14,112

Farmers

$1,196

$2,046

$3,793

$5,214

$6,694

$13,255

$19,627

MetLife

$863

$1,813

$3,251

$4,960

$6,589

$13,428

$20,229

Nationwide

$948

$1,782

$3,237

$4,796

$6,345

$12,490

$18,326

State Farm

$1,146

$2,027

$3,417

$4,861

$6,143

$12,440

$19,077

Travelers

$1,044

$1,887

$3,332

$4,853

$6,512

$13,298

$20,421

USAA

$1,022

$1,834

$2,920

$4,013

$5,094

$9,427

$13,686

Allstate

Our 2021 study concluded Allstate offered the cheapest home insurance on average for common dwelling coverage limits. If you get an affordable quote with Allstate, you can also add on a variety of optional coverages including water backup damage coverage, and coverage for specific valuable items like engagement rings, antiques, musical instruments and more.

This portion of your policy has the most significant impact on your insurance rates, but that doesn’t mean you should skimp on coverage to save money. It is crucial to figure out how much home insurance you need and to have enough coverage to completely replace your home in the event of a total loss. Therefore, people with more expensive homes need to have detailed records of their property features and an appraisal to ensure they do not underinsure their property.

The Best Cheap Homeowners Insurance Companies

Price is typically the biggest concern for most people looking for cheap homeowners insurance, but it isn’t the only thing you should think about. Customer support is also an essential part of finding the best home insurance because filing an insurance claim can be stressful and confusing. Having a company that understands your pain and wants to make things simple during a difficult moment is worth its weight in gold.

Balancing both affordability and customer service, MoneyGeek rates Allstate as the best home insurance company, receiving a MoneyGeek score of 93 out of 100. USAA is also an excellent option, but it did not receive a MoneyGeek score as only military families are eligible.

MoneyGeek used J.D. Power scores to determine customer service quality. J.D. Power ranks each insurance company for customer satisfaction to help you find the right insurance company for your circumstances. The table below shows the companies who earned a J.D. Power ranking of four or higher for customer service.

Average Annual Rates for the Best-Rated Companies
Company
MoneyGeek Score (out of 100)
J.D. Power Score (out of five)
Annual Premium

Allstate

93

4.21

$1,748

Nationwide

92

4.35

$1,782

State Farm

82

4.06

$2,027

MetLife

81

4.03

$1,813

Farmers

74

4.6

$2,046

USAA

N/A

5

$1,834

Allstate

Not only was Allstate affordable, but they scored great in the customer service category according to J.D. Power surveys.

Cheapest Home Insurance if You Have Bad Credit

Insurers often use a customer’s credit score to help determine their rates. The reasoning behind this decision is that they have found a statistical correlation between someone’s credit score and the number of claims they are likely to file. The higher your credit score, the less likely you are to file a claim.

For homeowners with poor credit, MoneyGeek found that Nationwide was the cheapest insurance company, with average annual rates of $2,948. Chubb was the runner-up. Allstate, typically among the most affordable insurers for those with good credit, was relatively expensive when you have poor credit.

Some experts don’t believe credit scores are an effective way to determine risk and even go so far as to say that this practice contributes to prejudicial practices, such as redlining. Because of this, California, Maryland and Massachusetts have all made it illegal to use credit scores when determining insurance rates.

For residents of the other 47 states, the chart below shows you the average annual rates for people with low credit scores.

Home Insurance Costs - Poor Credit and Dwelling Coverage of $250,000

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  • Company
    Annual Premium
  • 1.
    Nationwide
    $2,948
  • 2.
    Chubb
    $3,095
  • 3.
    USAA
    $3,984
  • 4.
    Allstate
    $4,011
  • 5.
    MetLife
    $4,250
  • 6.
    Travelers
    $4,558
  • 7.
    State Farm
    $4,981
  • 8.
    Farmers
    $7,730
Nationwide

In our study, Nationwide was the least expensive option for people with poor or bad credit. You should always compare multiple insurance companies before deciding where to buy a policy, but Nationwide is a good place to start if you feel you are being charged higher rates due to your credit history.

7 Steps to Reduce Your Homeowners Insurance Costs

Who has the cheapest homeowners insurance? There is no single answer to that question, but there are steps you can take to find the most affordable homeowners insurance for you, including:

  • Compare quotes: Comparing quotes from multiple insurance companies can help you guarantee you are getting the lowest available rate.
  • Shop for discounts: Every insurance company offers discounts. Some are pretty basic and widely available, such as discounts for bundling your insurance coverages, while others are more complex. For example, USAA offers a discount to members who use ADT for their home security, and Allstate offers a discount to members who use automated payment options.
  • Claims-free status: Farmers, Allstate and USAA are just a few insurance companies that provide a substantial discount for members who go for 3–5 years without filing a claim.
  • Increase your deductible: The higher your deductible, the lower your rates will be each year.
  • Improve tour credit score: Paying your credit card bills on time can save you money on late fees, but if it helps improve your credit score, it can also reduce your homeowners insurance rates.
  • Choose your home wisely: A home near a fire hydrant or the fire department is cheaper to insure. The same is true of homes that are not in a flood zone.
  • Review your policy each year: Every year, you should review your policy to ensure you have the correct amount of coverage. However, you should also get quotes from other companies to make sure you are still paying the lowest possible rate.
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FAQs on Comparison Shopping for Cheaper Home Insurance

Finding the best deal on your homeowners insurance can be tricky, even with all the information presented above. Many people still have questions about buying insurance, so some of the most frequently asked questions regarding shopping for affordable home insurance are listed below.

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Expert Insight on Affordable Homeowners Insurance

Finding homeowners insurance can be difficult, and finding affordable homeowners insurance even more so, making the process of insuring your home slow and cumbersome. MoneyGeek spoke to experts, industry leaders and academics across the country to gain insight on homeowners insurance to help you make an informed purchase.

  1. Are there any homeowners insurance endorsements (flood coverage, guaranteed replacement cost, etc.) that you recommend for most, if not all, buyers?
  2. Is there a common mistake that first-time buyers make and, if so, how can they avoid it?
  3. Are there any homeowners insurance exclusions that might be surprising to a first-time buyer?
Orlando Frasca
Orlando Frasca

Principal, Rogers Insurance Services

Earl L Jones
Earl L Jones

Insurance Agent and Agency Owner at Farmers Insurance

David Cusick
David Cusick

Chief Strategy Officer, House Method

Dr. Kevin Krieger
Dr. Kevin Krieger

Professor of Finance at the University of West Florida

Greg W. Marshall
Greg W. Marshall

Professor of Marketing and Strategy at Rollins College

Ricardo Cervantes
Ricardo Cervantes

Insurance Broker at The Garzella Group

Jenny Usaj
Jenny Usaj

Broker/Owner at Usaj Realty

Kuzey Yilmaz
Kuzey Yilmaz

Assistant Professor at Cleveland State University

Bud Nelson
Bud Nelson

Adjunct Professor of Finance at Point Loma Nazarene University

Read More About Home Insurance

About the Author


expert-profile

Rachael Brennan is a professional freelance writer. She has been published on a number of websites, including Adweek, Glamour and Cracked. She has also worked in the insurance industry for more than a decade, earning her P&C license in all 50 states and her Life, Health and AD&D license in New York and the surrounding states.


sources
  • Federal Emergency Management Agency. "Flood Insurance." Accessed October 15, 2020.
  • U.S. Government Services and Information. "Property Insurance." Accessed October 15, 2020.