Homeowners insurance protects your biggest investment — your home. But with premiums rising an average of 12% in 2025-2026, finding affordable coverage that actually protects you has become more challenging than ever.
We compared rates and coverage from over 40 insurance companies to help you find the best homeowners insurance in 2026. Whether you’re a first-time buyer or looking to switch carriers, this guide covers everything you need to know.
Average Home Insurance Costs in 2026
The national average for homeowners insurance in 2026 is $2,377/year for a policy with $300,000 in dwelling coverage. However, costs vary dramatically by state, with some homeowners paying over $5,000/year.
| Coverage Level | National Average (Annual) | Monthly |
|---|---|---|
| $200,000 dwelling | $1,750 | $146 |
| $300,000 dwelling | $2,377 | $198 |
| $400,000 dwelling | $3,100 | $258 |
| $500,000 dwelling | $3,850 | $321 |
Several factors influence your premium: your home’s age and construction type, local weather risks, your claims history, credit score, and proximity to fire stations.
Top 5 Home Insurance Companies
1. State Farm — Best Overall
State Farm combines competitive pricing with the largest agent network in the country. Their average annual premium of $1,780 for $300,000 in dwelling coverage is well below the national average. State Farm’s claims satisfaction scores consistently rank among the highest in J.D. Power surveys.
The key advantage: State Farm’s bundling discount is among the most generous, saving you 17-25% when you combine home and auto insurance. For most homeowners, this makes State Farm the most cost-effective option overall.
2. USAA — Best for Military Families
If you or a family member has served in the military, USAA is almost certainly your best option. Their average premium of $1,400/year is the lowest we found nationally, and their claims satisfaction rating is the highest in the industry.
USAA’s member satisfaction score of 900/1000 on J.D. Power is remarkable. The only downside is limited eligibility — you must be a current or former military member, or an eligible family member.
3. Erie Insurance — Best Regional Value
Available in 12 states across the Northeast and Midwest, Erie offers exceptional value with average premiums around $1,650/year. Erie is known for rate stability — they increase premiums less frequently than national competitors.
Erie’s policies include several features that other companies charge extra for, including guaranteed replacement cost coverage and flexible deductible options. If Erie is available in your state, they should be on your comparison list.
4. Amica Mutual — Best Customer Service
Amica consistently earns top ratings for customer satisfaction. As a mutual company, Amica returns dividends to policyholders — typically 5-15% of your premium annually. This effectively reduces their already-competitive rates.
Amica’s claims process is widely regarded as the smoothest in the industry. For homeowners who prioritize service quality and are willing to pay a small premium for it, Amica is an excellent choice.
5. Lemonade — Best Digital Experience
Lemonade appeals to tech-savvy homeowners with their app-first approach, AI-powered claims processing, and transparent pricing model. Claims under $10,000 are often paid within minutes through their AI system.
Starting rates are competitive, particularly for newer homes and condos. Lemonade’s social impact model, which donates unclaimed premiums to charities you choose, resonates with younger homeowners.
How to Save on Homeowners Insurance
The most effective strategies for reducing your premium without cutting coverage:
Bundle your policies. Combining home and auto with the same insurer saves 15-25% on average. This single step can reduce your annual cost by $300-600.
Increase your deductible. Moving from a $1,000 to $2,500 deductible typically saves 15-20% on premiums. Make sure you can afford the higher deductible if you need to file a claim.
Improve home security. Alarm systems, smart locks, water leak detectors, and impact-resistant roofing all qualify for discounts ranging from 5-20% depending on the insurer.
Maintain good credit. In most states, your credit-based insurance score significantly impacts your rate. Homeowners with excellent credit pay 40-60% less than those with poor credit.
Review annually. Don’t auto-renew without checking competitors. Rates change yearly, and the cheapest option last year may not be the cheapest today.
Understanding Your Coverage
A standard HO-3 homeowners policy has four main components. Dwelling coverage pays to repair or rebuild your home’s structure. This should equal the full replacement cost of your home — not the market value or purchase price.
Personal property coverage protects your belongings, typically set at 50-70% of your dwelling coverage. If you own high-value items like jewelry or art, you may need scheduled personal property riders for full protection.
Liability coverage protects you if someone is injured on your property and sues you. The standard $100,000 is often insufficient — most experts recommend at least $300,000, and an umbrella policy for additional protection.
Additional living expenses coverage pays for temporary housing if your home becomes uninhabitable due to a covered event. This is typically 20% of your dwelling coverage amount.
What’s NOT Covered
Standard homeowners insurance excludes several common risks that you should be aware of. Flood damage requires a separate flood insurance policy, available through the National Flood Insurance Program (NFIP) or private insurers. Even if you’re not in a high-risk flood zone, consider this coverage — 25% of flood claims come from outside high-risk areas.
Earthquake damage also requires a separate policy. If you live in a seismically active area, earthquake insurance is strongly recommended despite the additional cost.
Maintenance-related damage and gradual deterioration are always excluded. Your insurer expects you to maintain your home — a roof that leaks because it’s 30 years old is not a covered claim.
The Bottom Line
Finding the right homeowners insurance requires balancing coverage quality with affordability. Start by determining your home’s replacement cost, then compare quotes from at least 4-5 companies. Don’t just compare price — look at coverage limits, deductibles, and the company’s claims reputation.
For most homeowners, bundling with your auto insurer and maintaining a higher deductible offers the best balance of protection and affordability.
Rates shown reflect 2026 national averages for illustrative purposes. Your actual premium depends on location, home characteristics, and personal factors. Contact insurers directly for personalized quotes.