Best Homeowners Insurance Companies and Ones To Avoid: December 2022

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There’s no shortage of companies offering homeowners insurance. With so many options, knowing which companies offer the best protection for you can feel overwhelming. To help make the process a bit easier, in this article, we’ll review:

Clark Howard’s Top Picks for Home Insurance

There are many factors to consider before awarding any insurance company the title of “best.” For money expert Clark Howard, it’s not about having the lowest premiums. He says the best companies are ones that will be there when you need them. Two companies stand out to Clark in this regard: USAA and Amica.

“Amica and USAA may not have the best premiums,” Clark says. “But remember my rule: Homeowners insurance is only for use in a catastrophic situation, so it’s crucial to have the best coverage in case something does happen to your home.”

USAA

Founded in 1922, USAA provides homeowners insurance for military members, veterans and their family members. Since many people don’t meet the company’s criteria, USAA isn’t always ranked by companies that compare homeowners insurance options. But when it’s included, it’s consistently ranked at the top for customer satisfaction.

J.D. Power’s 2022 U.S. Home Insurance Study didn’t officially rank USAA, but its score of 884 out of 1,000 was the study’s highest. USAA ranked second on the Consumer Reports (subscription required) 2022 homeowners insurance ratings.

Amica

Amica Mutual Insurance was founded in 1907. As a mutual insurance company, Amica is owned by its policyholders.

It also consistently appears at the top of lists comparing insurance companies. This year, it is ranked first by J.D. Power (with a score of 849 out of 1,000) and by Consumer Reports.

Clark really likes these two companies, but there are many reasons you might want to consider others. So here’s our list of all the homeowners insurance companies we think you should look into.

Top 10 Best Homeowners Insurance Companies

When it comes to the best insurance companies, consumer experience is one of the most important factors here at Team Clark. We’re not looking for the cheapest companies or companies with the most discount offerings. Instead, we believe it’s important to consider customer complaints and satisfaction with a company after a claim is filed in order to get an idea of how you might get treated as a customer.

J.D. Power rates insurance companies by measuring consumer satisfaction with how well companies handle the billing process and policy information, claims, interaction, policy offerings and price.

Consumer satisfaction ratings by Consumer Reports are based on the companies’ courtesy and professionalism, estimates of dollar amounts of damages, timely payment, and promptness in response and attentiveness when investigating a claim.

And those criteria are also what’s important to Clark.

“The way insurers end up being the best on these ratings is how they treat you with claims. ”

We have averaged the rankings from Consumer Reports and J.D. Power to generate a Team Clark grade for the best insurance companies on our list below.

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Ranking
Company
Team Clark Grade
(out of 100)
*
USAA
90.2
1
Amica
89.4
2
Auto-Owners
85.7
3
Erie
85.3
4
State Farm
83.9
5
The Hartford
82.9
6**
Automobile Club Group (AAA)
82.8
6**
Nationwide
82.8
7
Allstate
81.7
8
American Family
81.6
9
Travelers
81.2
10
Farmers
81.1
* Because USAA coverage isn’t available to everyone, we’ve included it as an honorable mention but haven’t included it in the rankings.
**Tie

You can also find the AM Best Financial Strength Rating (FSR) for each company below, which reflects a company’s financial security and ability to pay claims. This isn’t factored into the Team Clark Grade for each company, but all of our top ten companies have an A, A+ or A++ FSR rating, which represents excellent to superior financial strength.

* USAA

Team Clark Grade
J.D. Power Score
(out of 1,000 points)
Consumer Reports Score
(out of 100 points)
AM Best FSR
A-
90.2
884
92
A++

Based in San Antonio, Texas, USAA says its “products and services are open to current and former military members and their spouses” and children.

In addition to standard home insurance policies, USAA offers protection for property such as collectibles, cell phones and flood insurance. Other lines of insurance offered include auto, business, long-term care protection, life, and pet insurance.

USAA also partners with companies to offer member perks such as discounts on hotels, rental cars, entertainment and more.

Home insurance is available for residents in all 50 states and Washington, D.C., and you can save money by bundling policies, having safety and security features on your home, and by being claims-free for five or more years.

1. Amica

Team Clark Grade
J.D. Power Score
(out of 1,000 points)
Consumer Reports Score
(out of 100 points)
AM Best FSR
B+
89.4
849
94
A+

Amica is based in Lincoln, Rhode Island. Amica offers home, auto and life insurance policies plus coverage for boats and yachts, motorcycles, small businesses, weddings and special events. Available discounts include autopay, claims-free, multi-line (bundling) and more.

Members can choose between dividend policies and traditional (non-dividend) policies. If you purchase a dividend policy, you are “buying into” the company, so Amica says your policy may be more expensive the first year. But you’ll save money down the line since company profits are returned to owners as an annual dividend or reductions in premiums. The company reports that 94% of customers stay with them, and Amica offers a loyalty discount after two years.

Home insurance is available in every state except Hawaii and Alaska.

2. Auto-Owners

Team Clark Grade
J.D. Power Score
(out of 1,000 points)
Consumer Reports Score
(out of 100 points)
AM Best FSR
B
85.7
825
89
A++

Auto-Owners Insurance was founded in 1916. The Lansing, Michigan, based mutual insurance company is owned by its policyholders and offers many different types of insurance policies including homeowners, auto, life, and business.

As part of its home insurance offerings, Auto-Owners members can select specialty coverages such as cyber protection, equipment breakdown protection for items like air conditioning and appliances, and specialized coverage for high-value homes. The company offers discounts for bundling, being claims-free and for member loyalty as well as for having a water shut-off system or automatic backup generators.

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Auto-Owners home insurance isn’t available to everyone, though, as it operates in only 26 states.

3. Erie

Team Clark Grade
J.D. Power Score
(out of 1,000 points)
Consumer Reports Score
(out of 100 points)
AM Best FSR
B
85.3
827
88
A+

Based in Erie, Pennsylvania, Erie Insurance was founded in 1925 and offers insurance policies for home, auto, business, and life. The company offers discounts on home insurance for early renewals, if you have safety and security features in your home, and/or if you bundle policies. Erie’s standard policy includes 100% guaranteed replacement cost coverage on your dwelling in applicable states.

Erie currently offers insurance in 12 states.

4. State Farm

Team Clark Grade
J.D. Power Score
(out of 1,000 points)
Consumer Reports Score
(out of 100 points)
AM Best FSR
B-
83.9
829
85
A++

State Farm is the largest homeowners insurer in the United States. The company was founded in 1922 and is headquartered in Bloomington, Illinois.

In addition to homeowners coverage, you can also get insurance for auto, small businesses, life, health, and pets. State Farm also offers long-term and short-term disability options. Discounts are available for bundling policies and for having safety and security features in your home. The standard homeowners insurance policy includes replacement cost coverage on roofing.

State Farm offers coverage in all 50 states and Washington, D.C.

5. The Hartford

Team Clark Grade
J.D. Power Score
(out of 1,000 points)
Consumer Reports Score
(out of 100 points)
AM Best FSR
B-
82.9
839
82
A+

Founded in 1810, The Hartford is based in its namesake city of Hartford, Connecticut. This insurance company offers policies for auto, home and business. Members can get discounts for having home safety and security features, bundling policies, and being claims-free.

AARP members can get access to special credits and savings through the AARP Homeowners Insurance Program from the Hartford, which offers homeowners insurance in 37 states.

6. Automobile Club Group**

Team Clark Grade
J.D. Power Score
(out of 1,000 points)
Consumer Reports Score
(out of 100 points)
AM Best FSR
B-
82.8
817
84
A+

Automobile Club Group is a subsidiary of the American Automobile Association (AAA), which was founded in 1902. In order to get insurance with Automobile Club Group, you must have an AAA membership.

Because there are several companies under the AAA umbrella that underwrite insurance, depending on where you live, your insurer may have a slightly different name, usually noting the region of coverage, such as the Auto Club Insurance South Company.

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While AAA offers auto insurance options in all 50 states, homeowners insurance policies are not offered in every state. Depending on your location, the discounts and coverage available to you will vary.

6. Nationwide**

Team Clark Grade
J.D. Power Score
(out of 1,000 points)
Consumer Reports Score
(out of 100 points)
AM Best FSR
B-
82.8
816
84
A+

Based in Columbus, Ohio, Nationwide Insurance was founded in 1926 and offers insurance for home, auto, life, health and special events needs, including coverage for long-term care, pets, and weddings.

Members with home insurance can get discounts for bundling policies, having protective devices on their property, being claims-free and living in a gated community. There are also discounts for policies on homes that have been purchased within the last year and for roof ratings, which are based on the age and surface type of a roof.

Nationwide homeowners insurance is not available in Alaska, Florida, Hawaii, Louisiana, Massachusetts, New Jersey, or New Mexico.

7. Allstate

Team Clark Grade
J.D. Power Score
(out of 1,000 points)
Consumer Reports Score
(out of 100 points)
AM Best FSR
B-
81.7
815
82
A+

Allstate Insurance was founded in 1931. Headquartered in Northfield Township, Illinois, the company offers insurance policies for auto, home, life, and business needs. In addition to standard home insurance offerings, coverage is available for property such as sports equipment and musical instruments and even electronic data recovery for personal data such as pictures and videos.

The company offers home insurance across all 50 states, and members can qualify for discounts for having home protective devices, a good payment history and for being claims-free and/or bundling policies.

8. American Family

Team Clark Grade
J.D. Power Score
(out of 1,000 points)
Consumer Reports Score
(out of 100 points)
AM Best FSR
B-
81.6
842
79
A

American Family Insurance is based in Madison, Wisconsin, where the company was also founded in 1927. The company offers many types of insurance including home, auto, commercial, personal, and farm and ranch.

There are many options for add-on coverage to a homeowners policies such as protection for relatives in nursing homes or assisted living, credit monitoring services or for hidden water damage. Standard discounts are available for bundling, member loyalty, home safety and security features, home renovations and more.

Home insurance is available in 19 states.

9. Travelers

Team Clark Grade
J.D. Power Score
(out of 1,000 points)
Consumer Reports Score
(out of 100 points)
AM Best FSR
B-
81.2
794
83
A++

Travelers Insurance was founded in 1852 in Saint Paul, Minnesota, and is currently headquartered in New York, New York.

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Several types of insurance policies are available including home, auto, pets, and weddings and special events.

The company offers discounts for bundling policies and for having home safety and security devices. You may also qualify for discounts on coverage for a home purchased within a year prior to a policy’s effective date or if you have not experienced any losses within a certain time frame.

Travelers homeowners insurance is available in 45 states.

10. Farmers

Team Clark Grade
J.D. Power Score
(out of 1,000 points)
Consumer Reports Score
(out of 100 points)
AM Best FSR
B-
81.1
792
83
A

Founded in 1928, Farmers Insurance offers policies for auto, home, life, pet and business needs. In addition to standard home insurance coverage, the Los Angeles, California-based company offers several optional add-ons including coverage for vacant properties and seasonal or vacation properties.

Members with home insurance policies can qualify for discounts for bundling, home safety and security features and even for being a nonsmoker.

Home insurance is available through Farmers in 41 states.

Homeowners Insurance Companies To Avoid

According to the National Association of Insurance Commissioners (NAIC), more than half of all homeowners insurance policies are written by a major insurance company, including many on our top ten list.

But there are more than 2,000 companies that write homeowners insurance across the United States and more than 200 million homeowners. Just as every homeowner has individual needs, different factors impact what companies can best meet those needs.

When looking for the best homeowners insurance company for you, how can you know which companies to avoid?

Clark recommends paying attention to how a company is rated, particularly by J.D. Power and Consumer Reports. Even on our list, you’ll find some companies have scores that are just a fraction apart. So just because a company isn’t on a top ten list doesn’t mean that it won’t provide the support you need.

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On the flip side, Clark doesn’t recommend choosing a company only because its quotes for coverage are cheap.

“Just know there’s a risk-reward quotient. You might get a cheaper quote from somewhere else and you might think, ‘Yeah, I’m never going to have a homeowners claim; they just make me have this stuff.’

If you’re willing to roll the dice for a lower price, go for it. On the other hand, if you have experience in this area — you know how important it is that an insurer be there when you have a problem — then go by the ratings.”

If premium price is the most important factor for you, shopping around is one thing you can do to get the best deal possible for your needs. Once you identify the companies that offer coverage at rates that meet your needs, you can create your own ranking.

But Clark emphasizes the need to give a lot of weight to customer service, and J.D. Power and Consumer Reports are two organizations he trusts when ranking insurance companies.

“What makes an insurance company good or bad by the standards these people use is: When the chips are down and you have a problem, are they treating you right?” he says. “Are they fighting you like you’re the enemy, or are they working as your partner to get your life back together?”

Clark’s Advice for Getting the Best Homeowners Insurance Policy

In addition to shopping around and being mindful of a company’s reputation for strong customer service, here are a few pointers from Clark to make sure you get the best coverage for your needs.

1. Be Careful of Policy Exclusions

A standard homeowners insurance policy won’t protect your property against everything. I’ve written more about what’s usually included and excluded from policies, but in general, standard homeowners policies don’t typically cover:

  • Flooding
  • Earthquakes
  • Mold
  • Termites and other pests
  • Water backup
  • Dog attacks

Most insurance companies offer optional add-ons, also known as endorsements, to cover many of the events above. Endorsements may increase your premium but help ensure your policy will properly protect your property.

2. Make Sure Your Home Is Properly Valued for Rebuilding

The biggest mistake when purchasing a policy is not buying enough coverage to protect you financially if you face a total loss. You want to be sure that if your home has to be rebuilt, you have enough coverage to do so.

If your home isn’t properly valued, the difference between what it costs to rebuild and what your insurer is willing to pay will have to come out of your pocket. Check out this article to read more about how much homeowners insurance you need.

3. Consider a High Deductible Policy

Take the highest deductible that you can afford and that your mortgage holder will allow you to have. Doing that will both lower your premium and discourage you from making small claims unnecessarily. According to Clark, that last part is very important.

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“You should think of homeowners insurance as a ‘use it and lose it’ kind of proposition,” he says. “It’s not for use except in the case of a catastrophe.” If you use your policy frivolously, other insurers may not want to do business with you if you need to shop around and switch insurers in the future.

4. Consider an Umbrella Policy if You’re a High Net Worth Individual

If you have a lot of assets, you need to have enough liability coverage to protect them. This means you might need an umbrella policy to cover you from a catastrophic claim.

Umbrella insurance policies are usually sold in increments of $1 million.

Final Thoughts

Company reputation — including customer service, customer satisfaction and the ability to pay claims — is important. These factors determine which companies rank amongst the best of the best, but ultimately, the best homeowners insurance company for you is the company that will meet your most important needs.

One way to get the best coverage for your needs is to shop around. Then review and compare the companies that can meet those needs.

“When something goes wrong, that’s when you find out what kind of insurer you really have,” Clark warns.

If, for example, cost is a limiting factor for you, you can still compare companies that offer coverage within your budget to see how they’re rated when it comes to how they treat customers.

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