Business Insider’s Homeowners Insurance Review Methodology

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Insurance is always in the background of our lives, and it’s easy to forget until we need it. Some insurance products, like auto, are required by the state. Others, such as pet and travel, are entirely optional. But a plan fitting your needs could save you thousands of dollars in an emergency with affordable monthly premiums.

Personal Finance Insider asks what it takes to balance cost and benefit. To assess insurance companies, we go beyond customer satisfaction and online reviews and delve deep into the coverage, customer service, company mantras, and other factors creating positive consumer experiences.

Comprehensive Ratings

We rate all categories on a scale of 1-5. Things like customer service and monthly premiums may be more evident to the average consumer. But we consider other factors in our ratings to be just as crucial in finding insurance that performs when you need it most.

Each category gets unique ratings combined to get one average for each product. Some rating categories only apply to specific product types. However, we consider customer satisfaction and financial stability across the board. We also assign extra points when we find proof of ethical practices with no significant controversies or known misdeeds within the past five years.

Read on to see how we rate insurance products to give every reader the most objective ratings and comparisons.

Is There A Perfect Insurance Company?

Insurance is a game of risk with tradeoffs. Lower premiums could mean less employee training and fewer agents to support you when you file a claim or adjust your plan. It might also suggest lower death benefits and more restrictive underwriting. Coverage for a broader range of insured parties might lead to higher premiums and insurance agents who aren’t familiar with the insurance product you want. High customer service ratings could lead to lower financial stability if the company earns those ratings by giving customers whatever they want. Ultimately, lower financial stability could put you at risk of not getting your claims paid later, as the company could shut down.

We have reviewed a lot of excellent insurance companies, striking a balance to serve customers better. These include both general providers and those offering specialty coverage. We evaluate all insurance types on a few fundamental bases.

Homeowners Insurance

Homeowners insurance protects homeowners in obvious areas (personal property and the home’s structure). It also offers liability protection if someone gets hurt on your property or hotel costs should you be displaced from your home for a short period. Choosing your homeowners insurance policy carefully up front could mean avoiding long waiting times, denied claims, and other complications later on. The additional factors we consider when rating homeowners insurance products include:

Policy Types (Weighted 20%)

Homeowners insurance companies offer products for single-family residences, condos, homes under construction, and more. In some states, most homeowners policies exclude hurricanes, tornadoes, earthquakes, etc. As a result, mortgage companies may require homeowners to buy separate policies to fill those gaps.

Average Premiums (Weighted 10%)

You might expect large national companies like GEICO, Progressive, and Allstate to offer lower rates. However, you might be surprised how low rates can be with a smaller state-specific provider for homes in good shape with no history of claims or other issues. We consider average premiums for all covered populations. A homeowners insurance company with five stars will provide low rates based on the coverage offered. One-star insurance companies charge more without justification (such as covering high-risk areas like beachfront properties and certain lava zones).

Claims Paid (Weighted 15%)

Our five-star ratings go to homeowners insurance companies with various claims options. Insured parties can file claims online, with an insurance agent, or over the phone. According to customer reviews, claims are processed quickly, and the BBB has minimal complaints about claims. One star goes to companies with extreme complaints about unpaid claims.

Standard Exclusions (Weighted 15%)

Each insurance company takes on certain risks balanced against its premiums and profits. While no homeowners insurance company can cover everything, many companies partner with other insurers. For example, the primary insurer may provide homeowners insurance while quoting hurricane or earthquake coverage with a trusted partner. We’re looking for providers that make insurance shopping as simple as possible for consumers.

Agents (Weighted 10%)

The top homeowners insurance companies in this category offer quoting online, through licensed insurance agents, and over the phone. We look for companies that come to potential customers. The personalized option of an insurance agent coupled with online and other options is essential for a premium insurer.

Homeowners Insurance We’ve Reviewed

Renters Insurance

Renters insurance offers considerable value for your money, but many renters know they need it. Expressly, these renters assume homeowners insurance will cover their claims too. Unfortunately, it doesn’t work that way. A homeowners policy covers the building, personal property, liability, and other demands of the homeowner. If the owner has renters, renters insurance provides the same coverages besides the building if losses are associated with the renter. The additional factors we consider when rating renters insurance products include:

Average Premiums (Weighted 25%)

Renters insurance works differently than other insurance types. Premiums are generally around $200 annually. However, pricing can vary for specific riders to enhance coverage. For example, if you rent in a particular apartment building, the management may require you to buy renters insurance. Some of these apartments have contracts with renters insurance providers for lower rates. But renters need to live in specific buildings to qualify.

Claims Paid (Weighted 25%)

Renters insurance can cover personal belongings, as you might expect. It also covers the cost of your hotel room if you’re temporarily displaced due to flood, fire, etc. While claims are generally small, premiums paid are small. So a financially unstable insurer may be slow to pay claims. We look for companies processing and paying claims efficiently. Frequent denials or underpayments reported by customers would constitute a one-star rating for claims paid.

Agents (Weighted 20%)

The most common way to buy renters insurance is online. Many renters run a quote through their auto insurance company and enjoy multi-policy discounts. Our five-star ratings in this area go to companies offering online, agent, and other options tailored to diverse buyers.