Compare Home Owners Insurance
Homeowners Insurance-What You Need to Know
Although you can technically own your home with without homeowners insurance, if you are financing your home with a mortgage the lender will require you to have it. Homeowners insurance covers your dwelling and its contents from most major calamities. Things like fires, hurricanes, tornados, etc. Floods and earthquakes are not typically covered and have to be purchased independently or as add-ons.
Many factors influence the cost of homeowners insurance. Location, proximity to emergency services, type of coverage all play a part.
It is estimated that two thirds of Americans are currently underinsured when it comes to homeowners insurance. People typically choose an amount of coverage equal to the current value of their house, as required by the mortgage lender. This theoretically would be enough to replace the house in the event of a catastrophic total loss.
As time passes though, a variety of things could cause the actual cost of rebuilding the dwelling to far exceed the original covered figure. Building materials and labor may be more expensive, codes could have changed, etc.
How does homeowners insurance work?
In the United States, standard homeowners insurance policies covers six (6) core components. Meaning, when you purchase homeowners insurance this is what typically is being covered.
1. Dwelling -The actual physical structure in which you live.
2. Other Structures - Any other structures on your property not used for business.
3. Personal Property - This is subject to certain restrictions and limits depending on your policy and provider.
4. Loss of Use - This will pay for additional expenses you may incur if you cannot live in your home. For example, a hurricane renders your house unlivable and you have to live in a hotel or rent a trailer.
5. Personal Liability - This will cover any damages sought by someone injured on your property. The vast majority of these cases are due to dog bites.
6. Medical Payment - Pays the medical expenses of the above person injured on your property.
The different policies home insurance entities offer are defined by what types of events that can befall your property. These events have traditionally been called “perils”. Policies are categorized from HO (home owners) 1-6. For our purposes, we will be focusing on H02, HO3 and HO5. HO1 is so basic most US states no longer accept it. HO4 is insurance for renters and HO6 is for condominium owners.
The difference between these 3 policies has mainly to do with how they cover 1) the physical structure of your dwelling, and 2) the contents.
Covers your dwelling and its contents if they are affected by the “16 named perils” and no more. These are:
Ice, sleet, snow
Sudden or accidental burning or tearing apart
Damage from electrical current
Overflow from plumbing, AC, etc.
Homeowners Claims by Type 2010-2014
This is the most popular form of homeowner’s policy. It covers your dwelling from any possible peril (beyond the 16 named perils) except if the peril is specifically excluded in the policy. Floods and earthquakes are a good example of perils that are usually specifically excluded.
However, HO3 only covers the contents of your home (your belongings) for the 16 named perils.
This coverage is also called “Comprehensive Form.” It covers your dwelling AND contents from any possible peril unless it has been specifically excluded in the policy.
**When talking about replacing damaged contents it is also important to understand there are two basic options. A policy with “cash value” replacement will pay for your items factoring in depreciation, i.e. what they are worth now. A “replacement value” policy will pay to have your items replaced with brand new items.
As mentioned above, many factors influence the cost of your premiums including the location of your house and amount of coverage. What’s more, the cost of homeowners insurance fluctuates wildly depending on the state in which you live, making it exceedingly difficult to compare company premiums with any degree of accuracy.
Homeowners Highest and Lowest Cost by State 2013
Your premium can also be influenced by discounts offered by a given company. Some providers offer reductions for things like your house’s proximity to a fire station, fire alarms and air monitors, or sprinkler systems just to name a few.
Taking everything into consideration, we’ve decided to ranks homeowners insurance providers by these 5 criteria:
How we Compare Home Owners Insurance
|Standard and Poor's||AAA||AA||A||AA-||A+||AAA||A+|
|Years of Operation||18 years||80 years||105 years||85 years||89 years||95 years||91 years|
|States of Operation||42||48||50||50||50||50||50|
Home Owners Insurance with the Best Customer Experience:
|NAIC Complaint Ratio||1.93||2.73||0.00||0.88||0.00||0.48||0.00|
|2016 JD Power Home Insurance Study||None||825||812||829||815||898||817|
|Insure.com 2016 Home Insurance Study||None||84.5||84.2||90.3||86||97.5||84.7|
|Higher Deductibles/Lower Premiums||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|New/Remodeled Home Credit||No||No||Yes||Yes||Yes||Yes||Yes|
|Automatic Detection Devices||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Claims-Free (discount for never making claims)||Yes||No||Yes||Yes||Yes||Yes||Yes|
|Automatic Payment Discount||No||No||No||Yes||Yes||Yes||No|
|Gated Community – Extra layer of security||No||No||No||Yes||Yes||No||Yes|
|Impact Resistant Roofing||Yes||No||No||Yes||Yes||Yes||Yes|
Home Owners Insurance with the Best Online Presence:
|Online Policy Management||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Online Educational Materials||Provides how-to videos and other helpful information||Very informative technical help and resources||Gives several informative topics||Helpful quick links||Useful tips and resources about home insurance and oter products||Gives helpful topics and links||Informative member resources and learning center|
Home Owners Insurance with the Best Customer Service:
|Hours of availability||24/7||24/7||Mon.-Fri. 8 am-10 pm ET, Sat. 8 am-8 pm ET, Sun. 11 am-5 pm ET||24/7||Mon-Fri 7:00am to 11:00pm CST, Sat-Sun 8:00am to 8:00pm CST||24/7||24/7|
|Social Media||Twitter, Facebook||Twitter, Facebook||Twitter, Facebook||Twitter, Facebook, Pinterest, Instagram, Google +||Twitter, Facebook||Twitter, Facebook, Pinterest, Instagram||Twitter, Facebook, Google +|
Full Home Owners Insurance Comparison
|Company Reputation||Customer Experience||Discounts||Online Presence||Customer Service|
|Esurance Home Insurance||9.5||9.8||9.5||10.0||9.0|
|Progressive Home Insurance||10.0||10.0||9.0||9.0||9.0|
|Liberty Mutual Home Insurance||9.5||9.5||9.0||10.0||10.0|
|Allstate Home Insurance||10.0||8.0||9.0||9.5||8.0|
|Farmers Home Insurance||9.5||8.5||9.0||9.0||8.5|
|USAA Home Insurance||9.0||9.0||9.5||8.5||8.0|
|Nationwide Home Insurance||9.5||8.0||8.0||9.0||8.0|
|InsuraMatch Homeowners Insurance||9.0||8.0||9.0||8.5||9.0|
What is Home Insurance?
Home insurance (also referred to as homeowners insurance) protects your home, property and personal belongings from damage resulting from accidents such as fire, natural disaster, theft and vandalism. Additionally, it also includes liability coverage in case you or your property are responsible for accidents and bodily injury that occur in connection with your property. For instance, if your usually harmless dog bites the mailman, a tree in your yard falls on your neighbor’s new sports car, or a girl scout falls on your driveway while delivering cookies.
Am I required to have homeowners insurance?
Homeowners insurance is not required by law, but if your home is being financed by a mortgage, chances are the lender will require you to have a homeowner insurance policy. This will protect you (and their financial interest in your home) against any unforeseen damage.
If you buy a condominium or co-op, your housing association may also require you to purchase insurance regardless as to whether or not you have a mortgage. And some townhome communities have group insurance coverage, which only requires you to have renters insurance, so it’s worth looking into before making any purchases.
Even if you aren’t required to have homeowners insurance, many people still choose to cover themselves. The cost of repair after a natural disaster or accident can cost tens of thousands of dollars, making home insurance a worthwhile purchase for most.
How much does home insurance cost?
The answer to this question is based on a number of factors including your home’s age, quality of construction and materials used, location, risk factors, your credit score, preventative measures taken (like smoke detectors or home security systems), and others.
The average cost of homeowner insurance varies significantly by state, and most sources report state averages fall between $550 and $2000, with the national average around $1000.