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Tips for Picking the Best Home Insurance Company

Ben Gran

If you’re in the market for a home insurance company but don’t know which one to choose, you’re in luck. Consumer Reports recently surveyed more than 11,000 home insurance consumers to rank the best home insurance companies in a variety of categories, including promptness and overall satisfaction with resolving claims.

According to the Consumer Reports survey, the top 10 insurers are:

Name of insurer Rating out of 100)
Amica Insurance 92
Auto-Owners Insurance 90
Farm Bureau Property & Casualty 86
Erie Insurance 84
State Farm 83
American Family Insurance 83
Tower Hill 83
Nationwide 82
Liberty Mutual 80

So, how can you choose the best home insurance company for your needs?

Do your homework

Consumers should be prepared to do their research and shop around among various home insurance companies, says Daniel Schwarcz, an insurance expert who teaches at the University of Minnesota Law School.

“Consumers need to have a sense of a company’s reputation and overall attitude toward policyholders. But you also have to look at the policy’s fine print. If you buy a policy that only has a certain level of coverage, insurers) are not going to pay more than that,” Schwarcz says.

Schwarcz recommends investigating the financial strength of home insurers. A.M. Best publishes ratings that show which companies are on the strongest financial footing. Meanwhile, Consumer Reports and J.D. Power and Associates publish rankings of home insurance companies based on consumer surveys.

Robert Hunter, director of insurance at the nonprofit Consumer Federation of America, says consumers can get a good overview of insurance companies’ rates and reputations just by spending an hour online.

“Many state insurance department websites have rate comparison tools where you can get general rate information about various home insurance companies,” Hunter says. When shopping for insurance, he says, “do not go to only one source for the decision.”

Check for inclusions and exclusions

Jeremy Bowler, senior director of the insurance practice at J.D. Power, says every home insurance buyer should think about his or her unique needs and belongings, whether that means expensive jewelry, valuable antiques or a home office.

“Home insurance companies will usually insure whatever you want, but you might need to declare the value separately or write a separate rider for the policy,” Bowler says.

In addition to looking for additional coverage such as riders, home insurance shoppers also should inquire about policy limitations, Hunter says.

“Ask if the policy has any exclusions, and ask for an explanation of each exclusion in writing,” Hunter says. Two typical policy exclusions are floods and earthquakes.

Watch out for complaints

Michael Barry, a spokesman for the nonprofit Insurance Information Institute, says home insurance shoppers should check the website of their state insurance department or the National Association of Insurance Commissioners to see whether any complaints have been filed against a particular insurer.

“People should look at not only the number of complaints against a company, but also look for the number of complaints that have been upheld by the regulator, as this indicates that the complaints have merit,” Barry says.

Look for the personal touch

Bowler says consumers should ask how an insurer handles home insurance claims. Different insurance companies have different staffing strategies for responding to claims, especially after major disasters like hurricanes.

“Find out who you would be dealing with as your first point of contact,” Bowler says.

He recommends asking these questions:

  • In the event of a claim, will I be talking to a local insurance agent, a claims representative or an independent insurance adjuster?
  • Can I get help with emergency expenses, such as hotel stays?
  • Will I receive any money upfront to help pay for expenses, or do I have to pay out of my own pocket and get reimbursed later?

Don’t be afraid to ask for help

Although it’s important to do your own research, consumers should be open to seeking out an independent insurance agent.

“A typical independent insurance agent is under contract with six or more companies, and so they are uniquely able to compare prices and policies and can explain strengths and weaknesses of different companies,” Bowler says.

Ryan Woythaler, an independent insurance agent in Iowa, says a good agent can help customers find home insurance companies that are easy to work with and that pay claims promptly and fairly.

“We look for companies that treat customers right,” Woythaler says. “If there are companies that fight with customers over a small amount of money, we stop doing business with them.”

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