Best Cheap Homeowners Insurance

Budget-Friendly Home Insurance Coverage

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Home insurance helps protect your investment in your home. While it’s important to make sure your policy covers your needs, many insurance companies offer ways to save money such as  discounts and customizable packages.

Buying cheap home insurance doesn’t mean choosing low-quality coverage. It’s all about finding a balance between the coverages you need and the amount you want to spend. To help you keep your costs down while still choosing reliable insurance, we researched the top home insurers and compared quotes for two sample homeowners. Here’s where (and how) to get the best affordable homeowners insurance in 2021.

Best Cheap Homeowners Insurance of 2021

Best Overall : State Farm

State Farm

 State Farm

State Farm is the largest home insurer in the U.S. Not only did State Farm quote some of the cheapest premiums for our sample home profiles, but it also offers solid coverage options with above-average customer satisfaction scores. 

State Farm provides multiple cost-saving options when you get a quote. The company makes it easy to compare coverages by providing side-by-side quotes for its Essential, Expanded, or Premium plans, which offer different deductibles to choose from. And in addition to the usual discounts, depending on your location, State Farm offers savings like:

  • Impact-resistant roofing discounts
  • Fire-resistant construction discounts
  • New home credits
  • Loyalty discounts
  • Multi-policy discounts

If you’re looking for extra coverage, the Premium plan includes water service line coverage, increased limits for valuable items, and identity theft coverage—though choosing this package might raise your premiums out of the realm of cheap home insurance.

What We Like
  • Replacement cost on building and contents available

  • Personalized service through local agents, available in all states

  • Up to 24 months of loss of use coverage

  • Higher personal property coverage than other insurers on this list

  • Above-average customer satisfaction rankings, according to J.D. Power

What We Don't Like
  • Fewer discounts than other insurers

  • Sewer back-up coverage not included in the basic policy

  • Depreciated loss settlement (not replacement cost) on cheapest options

Read the full review: State Farm home insurance

Best Overall, Runner-Up : Amica Mutual

Amica Mutual Insurance

 Amica Mutual Insurance

Established in 1907, Amica offers all the basics you need in a home insurance policy. Although you can keep your coverage simple, Amica includes options to upgrade to a Platinum Choice plan, or pick and choose coverages to customize your policy. 

Amica’s home insurance discounts include savings for having a remodeled home or setting up automatic payments.

Amica offers the same coverage through two types of policies: dividend and non-dividend. Dividend policies are available in most states and generally cost more up front than regular policies, but may return up to 20% of your premium at the end of the year. Dividends aren’t guaranteed and the cost difference depends on your location, but it might be worth comparing quotes to see whether a dividend policy is right for you.

Amica is top ranked in both customer satisfaction and claims by J.D. Power, which makes it a good option for cheap homeowners insurance.

What We Like
  • High dwelling replacement cost limits are available (up to 30% more than insured value)

  • Dividend policyholders can get up to 20% back

  • Home repair assistance program can help you find vetted contractors

  • Ordinance or bylaw endorsement available

  • Highly ranked for customer service and claims

What We Don't Like
  • Not available in Alaska or Hawaii

  • Replacement cost on contents may not be available on all policies

  • Doesn’t list all endorsements on its website, so you’ll have to ask about specific options

Read the full review: Amica home insurance

Best New Option : Lemonade

Lemonade

 Lemonade

Lemonade is a relatively new player in the home insurance market, in operation since 2016. The company offers home insurance in 23 states and Washington, D.C., with plans for additional expansion. You’ll handle everything from requesting a quote to filing a claim through its website or app, where a bot named Maya guides you through the process. The company claims it takes 90 seconds to get insured and three minutes to get paid for a claim. 

Coverage offered on the home quote is basic, but it does include replacement cost on the building. It’s worth noting that the company doesn’t advertise any discounts except for bundling home and pet insurance with Lemonade.

When we reviewed a sample policy, we noticed swimming pool and trampoline exclusions, which exclude any damages or medical payments for claims related to these features. We also saw a canine liability exclusion that specifies the policy does not cover liability or property damage caused by certain dog breeds like pit bulls, huskies, and German shepherds. These exclusions are a good reminder to carefully review the fine print to make sure the policy is a good fit for your needs before you sign up.

Lemonade is noteworthy because it runs on an innovative model where the company keeps a fixed percentage from each premium paid, and uses most of the rest of its earnings to pay claims. Each year, Lemonade donates the money that isn’t paid out in claims to nonprofits chosen by its policyholders—which received more than $1.1 million in 2020. This is part of why it’s a certified B-Corp.

In the 2020 J.D. Power Customer Satisfaction Study, Lemonade was not yet ranked for its homeowners insurance, but it was #1 in the renters insurance category.

What We Like
  • Fast policy issuance

  • Up to 24 months of additional living expenses

  • Digital policy management tools

  • Top ranked for customer satisfaction with renters insurance

  • Certified B-Corp and supports nonprofits through its Giveback program

What We Don't Like
  • Everything is automated, so it may be tough to get human help

  • Excludes coverage for owners of certain dog breeds

  • Personal property coverage is for named perils only, and actual cash value instead of replacement value

  • Newer company without a long track record

Best Claims-Free Rewards : Allstate

Allstate

 Allstate

Allstate is a well-known and reliable insurance company with a strong financial stability rating, and it’s the second-largest home insurance writer in the U.S. It also offers a wide variety of optional add-ons, such as coverage for business property and home-sharing, and reimbursement for green improvements. 

One of the greatest advantages of getting home insurance from Allstate is the variety of discounts that can help reduce the cost. Depending on your location, Allstate discounts include:

  • Early-signing discount (up to 10%)
  • Loyalty discount (up to 10%)
  • Welcome discount (up to 10%)
  • Newly purchased home discount
  • Multi-policy discount (up to 25%)
  • Claims-free discount (up to 20%) and annual claims-free bonus (5%)

Allstate offers several ways to avoid rate jumps in the event of a claim, or to reward you for being claims-free. Claim Rateguard is an optional coverage that preserves your premium if you file a claim, as long as you haven’t filed in the previous five years. Deductible Rewards saves you $100 when you sign up, and an additional $100 for each year you’re claims-free, up to $500.

What We Like
  • Large list of discounts available

  • Deductible rewards lower your deductible over time

  • Wide variety of endorsements available, including less common options

  • Multiple claims-free rewards and premium protection options

What We Don't Like
  • Doesn’t offer home insurance to owners of certain dog breeds, like pit bulls and Akitas

  • Online quotes not available in all states

Read the full review: Allstate home insurance

Best Discounts : Liberty Mutual

Liberty Mutual

 Liberty Mutual

Liberty Mutual is the fourth-largest home insurance company in the U.S. The standard policy provides basic coverages, and depending on your location, you can choose from a number of good optional coverages such as water backup, replacement cost on personal property, inflation protection, and blanket jewelry coverage (insures all jewelry without specifying each item individually). The company also offers catastrophe coverage like hurricane, earthquake, and flood insurance. 

The wide range of discounts offered by Liberty Mutual means you’re likely to qualify for at least one or two. These include fairly standard discounts for being claims-free and signing up before your current policy expires, as well as easy-to-earn savings like for having a paperless policy and signing up for autopay. But Liberty Mutual also provides a discount for insuring your home to value or for renovating it. Plus, the company offers discounts for military members and members of 14,000 other groups, such as employers and university alumni associations.

What We Like
  • Long list of discounts

  • Variety of endorsements lets you customize your coverage

  • Flood insurance available

  • Does not discriminate against certain dog breeds

What We Don't Like
  • Customer satisfaction ranking from J.D. Power is slightly below average

  • Actual cash value coverage on personal property, as opposed to replacement value

Read the full review: Liberty Mutual Home Insurance

Best for AARP Members : The Hartford

The Hartford

 The Hartford

Founded in 1810, The Hartford is highly ranked by J.D. Power for claims satisfaction (#2 out of 19 insurers) and overall customer satisfaction (#5 out of 22 insurers). 

The Hartford offers a special home insurance plan for members of AARP that includes all the basic coverages you’d expect from a home insurance policy, plus a few standout optional add-ons like green rebuilding coverage, assisted living care coverage, and valuable items blanket coverage for computers, silverware, jewelry, cameras, or fine art. Plus, if you choose the deductible waiver option, The Hartford will waive your deductible up to $5,000 when your claim exceeds $27,500.

The Hartford offers home insurance discounts for:

  • Installing a smoke detector, sprinklers, or a monitored alarm
  • Adding deadbolt locks or a burglar alarm
  • Remaining claims-free
  • Bundling home and auto insurance (up to 20%)
  • Working less than 24 hours a week
What We Like
  • Helpful videos embedded in the quote to help you understand the coverage

  • Generous coverage options, including replacement cost on contents

  • Valuable endorsements such as assisted living care coverage and deductible waiver

  • Endorsed by AARP

What We Don't Like
  • Must be an AARP member, which costs extra

Compare Providers

Insurance Company Why We Picked It
State Farm Best Overall
Amica Mutual Runner-Up, Best Overall
Lemonade Best New Option
Liberty Mutual Best Discounts
Allstate Best Claims-Free Rewards
The Hartford Best for AARP Members

FAQs

How Much Does Home Insurance Cost?

The overall average cost of home insurance in the U.S. was $1,249 in 2018, according to the most recent data available. But keep in mind that your premiums will vary based on location, the value of your home, the discounts you qualify for, and the insurance company. 

How to Save Money on Homeowners Insurance

Saving money on home insurance is all about shopping around and comparing your options. Online quotes are a good way to start the process, but it’s often worth speaking to an agent to make sure you get as many discounts as possible. 

Some things you can do to get a lower price on your home insurance include:

  • Taking advantage of easy-to-earn discounts such as for automatic billing or having a paperless policy.
  • Bundling your home and auto coverage with the same insurer.
  • Maintaining a good credit score, or if your score could use some work, choosing an insurance company that does not weight the score as heavily. 
  • Requesting a few quotes from other insurers before renewing your policy each year, to see if you’re truly getting the best deal.
  • Reviewing your insurance coverage if your personal situation or lifestyle changes—like you get married, move to a new neighborhood, renovate your house, or adopt a dog—. A policy that was once a good fit may no longer be the best deal as your needs change.
  • Instead of limiting yourself to insurers’ websites as you shop around, thinking about contacting independent insurance agents who represent more than one home insurance company. These agents may be able to suggest regional insurers who could offer better deals.
  • Considering choosing a higher deductible to save money on your premium. But before choosing a sky-high deductible option, make sure you’d be able to pay for those costs yourself, such as with an emergency fund, in the event of damage.

Do I Need Home Insurance? 

Home insurance is not a legal requirement, but unless you’re able to self-insure—read: pay for any damage or liability expenses yourself—it’s a good idea to have it. If you finance your home, the mortgage company or lender will require you to buy home insurance. 

But that doesn’t mean you need to buy the most expensive policy. If you choose your coverage carefully, you can find cheap home insurance that fits your needs. 

Methodology

We reviewed over 25 home insurance companies in the U.S. for coverage options, policy pricing, customer satisfaction, and claims satisfaction rankings. We requested quotes, spoke with agents, read reviews and policy wordings, and checked information from state regulators to determine the best cheap homeowner insurance options. 

We used two sample profiles to research the best cheap home insurers:

  1. A 35-year-old applicant with a mortgage who had been insured for five years, with no claims, a $300,000 building value, a $1,000 deductible (where available), and a 1,500-square-foot home in a residential Illinois neighborhood. 
  2. A $300,000 home in Southern California with no individualized applicant info, using pricing samples obtained from the state regulator pricing tables. 

Home insurers should not be cheap when it comes to paying claims, so we looked at data on customer experience and claims satisfaction. We also considered financial stability, using AM Best ratings, which indicate an insurer’s capability of meeting its financial obligations.

Article Sources

  1. Insurance Information Institute. "Facts + Statistics: Homeowners and Renters Insurance." Accessed Jan. 26, 2021. 

  2. J.D. Power. "Home Insurance Customer Service and Reputation—Not Price—Drive Lifetime Customer Value, J.D. Power Finds." Accessed Jan. 26, 2021. 

  3. State Farm. "Home Insurance Starts with Great Insurance Discounts." Accessed Jan. 26, 2021. 

  4. State Farm. "Have Home or Property Insurance Questions? We've Got Answers." Accessed Jan. 26, 2021.

  5. Amica. "Home Insurance Discounts." Accessed Jan. 21, 2021. 

  6. Amica. "Home Insurance Dividend Policies." Accessed Jan. 21, 2021. 

  7. J.D. Power. "Homeowners’ Satisfaction with Property Claims Reaches Record High as Insurers Focus on Relationship Management, J.D. Power Finds." Accessed Jan. 26, 2021

  8. Lemonade. "About Lemonade," see "Where is Lemonade homeowners insurance available?" Accessed Jan. 26, 2021. 

  9. Lemonade. "Forget Everything You Know About Insurance." Accessed Jan. 26, 2021.

  10. Lemonade. "About Lemonade," see "How do you calculate my premium?" Accessed Jan. 26, 2021. 

  11. Lemonade. "The Lemonade Giveback." Accessed Jan. 26, 2021. 

  12. AM Best. "Allstate Insurance Group," login required. Accessed Jan. 22, 2021. 

  13. Allstate. "Homeowners Discounts." Accessed Jan. 26, 2021. 

  14. Allstate. "Allstate Home Extras." Accessed Jan. 26, 2021. 

  15. Liberty Mutual. "Browse Home Coverage Options." Accessed Jan. 22, 2021. 

  16. Liberty Mutual. "Home Insurance Discounts." Accessed Jan. 26, 2021. 

  17. The Hartford. "AARP Homeowners Insurance Coverage From The Hartford." Accessed Jan. 22, 2021.

  18. The Hartford. "AARP Homeowners Insurance Coverage From The Hartford," see "Optional Types of Home Insurance Coverages." Accessed Jan. 26, 2021.

  19. The Hartford. "AARP Home Insurance Program From The Hartford Discounts," see "5 Ways to Get Affordable Home Insurance." Accessed Jan. 26, 2021. 

  20. Insurance Information Institute. "Facts + Statistics: Homeowners and Renters Insurance," see "Expenditures homeowners and renters insurance." Accessed Jan. 26, 2021. 

  21. NAIC. "Homeowners Insurance." Accessed Jan. 21, 2021.