How To Choose The Best Home Insurance Company

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If you own a home, chances are you’ve shopped for home insurance either on your own or with some help from an independent agent. Your home insurance policy is more than just another box to check for your mortgage company; home insurance can provide valuable protection for what’s likely your largest asset. Choosing the right home insurance company is an integral part of protecting your finances, and Bankrate’s insurance editorial team can help you do it. 

How to choose homeowners insurance

There are many home insurance companies on the market, so comparing providers can help narrow down your options. Some of the most important things to consider are your location, the cost of coverage and the provider’s third-party ratings. The following five steps will help you understand how to choose the best homeowners insurance company for your needs:

1. Consider your location

Home insurance rates vary by state, city and ZIP code and are typically based on common causes of loss in the area. For example, the cost of home insurance in high-crime neighborhoods is typically more expensive than the average rates in an area with a lower incident rate. Knowing the common causes of loss in your location can help determine what kind of coverage you need. Here are some things to consider:

• Crime rates: If you live in an area with a high rate of home break-ins, theft or vandalism, it’s possible that your home insurance premium could be more expensive. You may even consider an alarm system to protect your home and potentially earn a discount from your insurance company.
• Weather events: Living in an area with severe weather risks, like hurricanes, tornadoes or hail, could have a major impact on your home insurance premium. Keep in mind that the cost of home insurance in states with a high risk of severe weather is typically more expensive.
• Proximity to fire station: Homes that are located within one mile of a fire station are often cheaper to insure. On the other hand, if you live several miles away from a fire station, you could pay more in premiums due to the increased time it would take for help to arrive. In this case, it may be beneficial to look for a company that offers discounts for fire risk mitigation.

Some states, like California and Florida, have tighter home insurance markets. This can make finding any home insurance company — let alone, one you prefer — that’s willing to write you a policy a challenge. Working with an insurance broker can help you shop for the right policy. If your home insurance applications are repeatedly denied, you may want to look into your state’s FAIR Plan, an insurance option of last resort. 

2. Factor in your home’s features

Certain factors, like your home’s square footage, construction materials and safety features can influence the cost of home insurance. When shopping for insurance companies, it helps to look for providers that offer coverage for those features, as well as related discount opportunities. For instance, many home insurance companies will lower your rate for having an impact-resistant roof or a home security system.

To help avoid being underinsured, consider adding an extended replacement cost value (RCV) endorsement. It might also be a good idea to look at endorsements that could come in handy based on your home’s features, like yard and garden coverage or water backup and sump pump coverage.

3. Check trusted third-party ratings

Many home insurance companies are rated by third-party organizations. When comparing insurers, consider looking at their J.D. Power ratings for overall customer satisfaction, which takes into account real customer feedback around cost, agent interactions and claim handling.

Additionally, it can be helpful to look at each provider’s rating from AM Best and Standard & Poor’s (S&P) for financial strength. A company with strong financial stability has historically demonstrated the ability to pay policyholders’ claims.  Many insurance companies publish these ratings on their website.

4. Compare quotes based on coverage

When you purchase a home insurance policy, the rate will vary based on a number of factors that are unique to you and your home. Additionally, home insurance companies calculate rates differently. Comparing quotes from a few providers for the same amount of coverage will help you determine which home insurance company is the cheapest for you.

Keep in mind that home insurance policies may reimburse you for covered personal property losses based on actual cash value (ACV), which factors depreciation into your payouts. If your policy defaults to ACV on personal property, you have the option to upgrade to RCV, but it will be more expensive. If you purchase options like home sharing coverage or scheduled personal property coverage, your rate will also increase.

Why it’s important to choose the best home insurance company

While the basic home insurance coverage types are standard across carriers, each home insurance company may offer a different experience to its policyholders. This could be during policy shopping, renewal or the claims process. Because of this, it may be a priority for some homeowners to also consider the experience they want in addition to their desired coverage amount and annual premium.

Here are some factors that could influence your decision when picking the best home insurance company:

• Accessibility: Consider each company’s customer service options and accessibility. If you want peace of mind knowing that you can reach an agent at any time, you may want to prioritize companies that have 24/7 customer service and claim reporting.
• Local agents: Although it may not always be the case, many top national insurance providers have offices across the country with local agents who are experts in your geographic area.
• Digital management: If you prefer not to work with an agent, you could look for home insurance companies that have a mobile app or online customer portal that allows you to manage your policy and file claims anytime, anywhere.
• Claims: Check out J.D. Power’s 2025 U.S. Property Claims Satisfaction Study to get a sense of the sentiment surrounding each company’s claims handling. J.D. Power ratings account for things like settlements, claim servicing and the home repair process.
• Available discounts: Discounts can be a great way to save on your premium. Before deciding on an insurance provider, it can be helpful to see which discounts they advertise and which ones you qualify for. Bundling discounts tend to offer the highest savings.

Common mistakes to avoid when choosing homeowners insurance 

Avoiding these pitfalls can help ensure you choose the right home insurance company for your financial needs:  

• Skimping on coverage for a cheaper premium: Price is important, but it isn’t everything. If your home is completely destroyed in a covered loss, you’ll probably regret lowering your coverage limits to save money in the short term when you now need to dip into your own funds to finance the remaining repairs. Something most people overlook with home insurance is that you usually can’t “cash out” if your home is destroyed in a covered loss — in most cases, you must rebuild your home. You’ll want to set adequate coverage limits to restore your dwelling and property after a loss.
• Not reading your policy: Knowing what isn’t covered by your policy is just as important as knowing what is. Reading your policy can give you some insight into what you’re covered for, and where you may need to purchase an endorsement or additional policy, like flood or umbrella insurance.
• Insisting on doing it all yourself: Insurance can be confusing. You don’t need to navigate the whole process by yourself if you’re not confident doing so. A licensed insurance agent or insurance broker can help you navigate the shopping process.
• Neglecting your deductible: Your deductible represents the amount of money you are responsible for after you file a claim. Higher deductibles usually yield lower premiums, so if you’re getting pricier insurance quotes, consider raising your deductible.
• Cheaper doesn’t always mean better: The best home insurance company for you won’t necessarily be the one that offers you the cheapest rate. If something happens to your home in a covered event, you’ll want to make sure your home insurance company is there when you need it through its service availability and ability to pay out on claims.

I felt that choosing quality coverage over the cheapest rate gave me the peace of mind I needed to make sure my home was properly covered.

— Amy Sims
Editorial director, Bankrate

Amy Sims, Bankrate editorial director, explained why quality of coverage ended up being more important to her than finding the cheapest policy for her home.

“When buying my house, I had a Realtor recommend getting homeowners insurance quotes with an insurance broker that was offering ‘cheap rates,’” Sims said. “However, I chose to stay with USAA, the homeowners insurance company for my previous home, and ended up paying double what those ‘cheap rates’ would have been. I stayed with USAA because I had a history with them, they already had my auto insurance policy and a family member had just experienced a weather-related loss in their area where USAA stepped up to cover their claim faster than their neighbors’ insurance companies.”

Frequently asked questions

• What should you look for in homeowners insurance?
  

  What to look for in homeowners insurance depends on several factors specific to you and your home. The best home insurance for you will vary based on where you live, how much coverage you need, how much you want to spend and what you value in an insurance carrier. To begin, decide what you’re looking for from an insurance company. For instance, you might prioritize companies that offer the cheapest rate or insurers with local agents. Once you know what you’re looking for, shop around and compare rates from a few providers. When requesting quotes, be sure to specify the same coverage types and amounts (or as close as possible) for a fair comparison.

• What does home insurance cover?
  

  A standard HO-3 home insurance policy covers many things, including your home’s physical structure, as well as other structures like a swimming pool or detached garage, your personal belongings, liability, medical payments and loss of use. Many insurers sell endorsements or separate policies that you can purchase for more added financial protection. For example, if you live in an area prone to flooding, you might consider buying flood insurance since damage caused by flooding is not covered by a standard home policy.

  Learn more: Surprising things your home insurance policy covers

• Is home insurance required?
  

  Unlike auto insurance, which is required in most states, home insurance is not legally required in any state in the nation. That said, if you have a mortgage on your home, your lender will likely require you to carry home insurance until you fully repay your loan. Even if your home is paid for, though, a homeowner’s insurance policy is a good way to protect your investment in your home in the event of a covered loss.

• What is the 80% rule in home insurance?
  

  In homeowners insurance, the 80 percent rule refers to the fact that most insurance companies require homeowners to insure their home for at least 80 percent of its total replacement cost. If you choose to insure your home for less than 80 percent of its replacement cost, it is possible that your insurer will not fulfill the full amount of your claim. That means you may end up responsible for paying more out of pocket for repairs.

• Is home insurance included in closing costs?
  

  If your mortgage lender requires you to have an insurance policy, those costs will likely be included in your prepaids, as opposed to the closing costs.