Travelers, Progressive, and USAA Lead as Cheapest Large Home Insurance Providers
NerdWallet's comprehensive analysis of over 270 million home insurance rates from more than 50 insurers across all U.S. states and Washington D.C. identifies Travelers, Progressive, and USAA as the most affordable large home insurance companies.
Travelers offers the lowest average annual premium at $2,055, followed by Progressive at $2,170 and USAA at $1,790, with the caveat that USAA serves only active military members, veterans, and their families. The study considers a standard policy for a 40-year-old homeowner with good credit, $300,000 dwelling and liability coverage, and a $1,000 deductible, but actual rates vary based on individual circumstances. Travelers provides an accessible online management platform and customizable policies with optional coverage additions such as water backup and identity theft insurance. Progressive acts as a marketplace offering policies from multiple insurers with varied coverage options, including water and sump pump backup and personal injury liability. USAA covers belongings on a replacement cost basis and offers unique benefits for military-specific coverage, including no deductible for military uniform damage and war-related losses.
Further segmentation reveals that Progressive and Auto-Owners offer the cheapest rates for homeowners with a claims history, while Travelers and Progressive lead in affordability for homeowners with poor credit, a factor that significantly increases premiums outside of states like California, Maryland, and Massachusetts where credit is not used in underwriting. New homes are generally cheaper to insure due to compliance with updated safety codes and newer systems, with Progressive leading in affordability for new home coverage. Increasing deductibles to $2,500 reduces premiums, with Travelers remaining the most affordable in this category.
Geographic analysis shows that insurance costs vary widely by state, influenced by local factors such as proximity to coasts, crime rates, and population density. The report highlights the cheapest insurer for each state and the 20 largest metro areas, noting USAA's presence as the lowest-cost option in several states for eligible policyholders. Various strategies for reducing homeowners insurance costs include insuring for replacement cost rather than market value, shopping around for quotes, increasing deductibles, avoiding small claims to maintain discounts, adding safety and smart-home features, bundling policies, and improving credit scores.
The findings underscore the complexity of homeowners insurance pricing and the importance of tailored options to fit different homeowner profiles and market conditions. The research aids insurance professionals and decision-makers in understanding competitive pricing, credit and claims impacts, and regional insurance market dynamics to better serve clients and optimize policy offerings. This analysis also highlights the ongoing influence of economic factors like inflation and natural disaster frequency on premium trends.