Homeowner insurance: who has the best rates?

Is there any specific homeowners insurance you’d recommend? I’m looking for something with a low rate.

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California Department of Insurance

In California, at least, the state department of insurance has a comparison tool. I’m sure other states are similar.

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Is a low rate your only criteria? The cheapest insurance is self-insurance … costs nothing. So surely you must be looking for a company that will actually pay off in the event of a claim. The insurance companies that are consistently the highest rated are Amica, and if you qualify, USAA. I can personally attest to how great Amica is when you need them. They are not the cheapest out there, but they are the best value.

You can keep your homeowner’s insurance costs down by leaving off the extras like frozen food coverage, and any unnecessary riders not required by law. By far, the thing you should do to keep your insurance cost low is to go with the highest possible deductible that you could cover on your own. You might could get a deductible as high as $10,000, although I think there is a point of diminishing returns around $2,500.

You should also look at keeping your auto and homeowners together. Most ins companies that I’ve dealt with generally will give discounts for multiple lines. Most of them also require all items to be with them for an umbrella policy.

As @StatGren mentioned, a higher deductible is what generally drops your rates the most. You can even get deductibles that are a percentage of the home’s value.

Finally, if you’re trying to get pre-purchase quotes, ask the current homeowner to provide a clue report on the home. It may be a long wait though. My most recent experience with Lexis Nexis has made me think they are managed by the same crew as Equifax.

Depending on where you live, Erie offers competitive essential services. Fluff coverage can be added through riders, if desired. Be sure to consider the risks of your insured property’s location. Most homeowner policies do not cover earthquakes, floods, mold, and sewage backups.

Above all else, be sure that your net worth, including the equity in your home(s) is fully covered by liability insurance. On slip and fall case could cost $50,000 to defend and more if you lose.

If you can afford it and can stand assuming the risk, I suggest taking the highest deductible you can afford and banking the savings. This forces you to self-insure nuisance claims, but still maintain effective coverage for disasters and calamities that would otherwise bankrupt you.

Also, be sure to take advantage of bundling (home, auto, life, etc.) and discounts for common-sense and affordable risk mitigators. Dead-bolt locks, dusk-to-dawn lighting, and up-to-code smoke and carbon monoxide detectors, for example, often provide discounts that cover their costs.

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I’ve looked into combining home/auto a couple times but I personally have never found cost savings over using my two different companies.

Also, be sure to do the math on increasing your home insurance deductible. While cheaper, my home insurance premium decrease with a higher deductible would have taken 40 years without a claim to break even on the deductible difference. I have never filed a home insurance claim in my 6 years as a home owner but I can’t project a savings plan where I might never file a claim in the next 40 years to make up the deductible/savings difference.

I do however drop all but state minimum insurance on my auto policies once my vehicle value drops below around $6k in value and that is a great source of savings.

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Have you accounted for the fact that any claim, however small is likely to cause your rates to increase? I probably wouldn’t bother with a small claim for fear that they’ll just raise my rate to recover the loss, so I might as well “save” a few bucks with a higher deductible.

The auto coverage isn’t just for your vehicle, it’s also for other vehicle(s), property, and people involved.

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I don’t know about Corndogg’s situation, but when I was looking at raising my deductible recently, the savings didn’t seem worth it since the pay back was well into the longer term (20yrs or so). Even with rate increases (assuming not 100%+ increases, but I don’t have any experience with typical rate increases), it would still seem like it would take several years for the breakeven.

Plus, any loss is probably going to raise your rate so how would you know your rate isn’t going to increase even with the larger deductible if you really need to use your insurance for a large loss.

side note: on our old house, we had a low deductible for hail/wind protection (I think it was $500) and we would up using it to get a new roof which cost $6,000. I was prepared for my rate to jump, but it never did because our area got declared some sort of disaster zone. All rates in the state wound up going up a year or two later, but even at the increased rate, it would have taken 10+ years of rate increases to pay back the roof and I would have just saved maybe $600 in premiums to pay an additional $1,500 to $4,000 in deductible. Sold the house 4 years after the incident with a new roof and more money in my pocket with the lower deductible.

I just ran the numbers on my insurance. Save $125/yr to increase deductible by $2,700. Not sure if that is worth it or not since I can’t tell how much my rates would be affected in the future with a claim, but the breakeven is 20 years on the deductible alone.

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One should certainly look at the multiple options and determine their capacity for risk. How much you will or will not save with a higher deductible varies by insurer and by state. In my post above, I said there seems to be a point of diminishing returns at around $2500 deductible. But when I did the math raising from $500 to $2500, it was a no-brainer.

This link might be of interest on this topic, but nothing beats doing the analysis for your own situation.

https://clark.com/insurance/high-or-low-insurance-deductib/

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I completely concur with your statements, Scripta. I wouldn’t plan to file a claim for any small event other than a major payout as it is likely your premiums will go up. That’s the crappy thing with insurance. They love taking your money when they’re not paying out but like to ding you to recoup their loss if they do have to pay out.

I don’t mind assuming more risk myself if the savings make sense. In my case of higher homeowner’s deductible, I didn’t find the savings to be worth the higher deductible. In my case of auto, the savings is worth the higher risk to me and there were a lot of considerations that went into that decision. In the end, consider what you can afford to pay for a deductible in the event of a loss or catastrophe and what allows you to sleep comfortably at night. The risk of possible lawsuit claims if under-covered and your net worth and future earnings is also an important factor in this decision.

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I’ve had good luck with Wawanesa so far. I used to use them for auto but their rates went way up (higher than Geico). I have an HO-6 with them and they were considerably less than my previous insurer (State Farm), almost half, and I’m getting double the liability coverage (1M).

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Thanks for this info, I’ll have to check out Geico.

FYI, 2 years ago Wawanesa added a multi-product discount for HO-6, so if you also have auto coverage from them, your home premium goes down (a good 45% in my case). So yes, their auto rates went up, but combined they’re still pretty good.

Try going through an independent broker.