We’ve all seen those catchy insurance commercials featuring Geico’s talking gecko, Jake from State Farm, Flo from Progressive, Allstate’s destructive “mayhem” dude, the Aflac duck. Need we go on? (We didn’t think so.)
As you can tell from all these ads, home insurance is big business. So how do you know which is the best home insurance company for you? Funny commercials don’t tell you much about how an insurer will respond when you need help repairing your home after a hailstorm.
In this last installment of our Home Buyer’s Guide to Home Insurance, we’ll explore all the different factors to consider when selecting the best home insurance company for you.
How to find the most affordable home insurance company
Of course, one of the first things to consider when comparing home insurance companies is price—who can give you the best deal on your policy?
Start by getting quotes from at least three insurance companies, taking care to select the same (or very similar) coverage levels and deductibles so you get a truly apples-to-apples comparison. And yes, while getting quotes is probably the last thing you want to be doing with your precious free time, it’s well worth it since it could save you hundreds (or possibly thousands) of dollars in the long run.
To get a quote, simply call an insurance company or visit its website. You’ll be asked to share specific information about your home and your family—ranging from the age of your roof to whether you have a swimming pool. After you’ve answered all the questions, the insurance company will calculate a few different quotes based on varying coverage levels (cheaper typically means less coverage, while more expensive typically means better coverage). You can often tweak and customize the quotes by making changes to the policy.
If you don’t have time to do this work yourself, you can also work with an independent insurance agent or broker (aka an adviser), which is a professional who sells insurance from multiple companies. This pro can do most of the homework and research on quotes for you, in exchange for a commission. Plus, since the agent works with local insurance agents from many companies, you can get the scoop on who provides great service.
Just remember that these agents do make money off of your decisions, so be sure to vet their suggestions on your own.
“You want someone who is able to design your insurance program to fit your unique situation, rather than trying to fit your needs into what the insurance company has to offer,” says Josh Herz, president of Associated Agencies, an Illinois-based independent insurance agency and risk management firm. “Your broker should be able to explain what makes one company better than another.”
How to shop for the best home insurance company in terms of customer service
Price isn’t the only criterion you should consider when it comes to selecting a home insurance company. After all, cheaper isn’t always better and, in fact, could mean that you’re now stuck with an insurer with some shortcomings (e.g., limited call hours, which will hurt if a tree crashes into your living room on Friday night).
Another big factor is customer service—how quickly does the company respond to phone calls and emails? How fair are its damage estimates, typically? How easy is the company to work with?
“Borrowers should look for an insurer with a strong track record of paying claims quickly and fairly, and with a reputation for good customer service,” says Brian Rubenstein, senior director at Ally Home. “Insurers should also be financially sound so they are ready and able to pay claims when needed. Ratings, rankings, and customer comments are widely available online.”
To figure out which companies offer the best customer service, research their customer claims satisfaction ratings online. Talk to your neighbors, your family, and your friends about their experiences with their insurance company. Set up meetings or phone calls with local agents, and see how you feel in their presence.
Sure, you can’t totally predict how your insurer will respond if you ever need to file a claim, but you can probably get a pretty good sense with a little research.
Armed with this information, cross-reference your list of insurance companies with good customer service with those that offer the lowest prices. You may decide to pay slightly higher premiums for an insurance company with top-notch customer service, or you may decide to go with the cheapest option after all—it’s really up to you and your priorities.
“Your best pick is at the intersection of good customer service and a good price,” says Amy Danise, chief insurance analyst at Forbes Advisor.
Other factors to consider when shopping for home insurance
Price and customer service aside, you may be limited to certain companies because they specialize in certain types of homes or coverage.
For example, there are just a few companies that specialize in insuring high-value homes, Danise says. Not all companies offer certain policy add-ons, such as extended replacement cost coverage, which gives you a safety net if your home needs to be rebuilt and the cost is above your coverage amount.
Also take into account whether you’ll be bundling your home insurance policy with other types of insurance, such as auto. You can typically get a better deal when you bundle multiple policies together with one insurer, rather than having them split across multiple companies. Similarly, insurance companies offer different levels and types of discounts, so keep those in mind while you’re comparing quotes.
What to do if you have concerns about a home insurance company
Insurance companies are licensed and regulated by your state government. The office or division that regulates insurance can be a great resource if you have general questions about insurance or you feel an insurance company is doing something sketchy and you’d like to file an official complaint.