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Most Chicago area homeowners can save hundreds of dollars a year by switching from their current insurance company to a lower-priced one. Some will save more than $1,000.
Our researchers collected annual premiums for sample policyholders from the companies that write almost all of the homeowners insurance business in the area. Costs vary significantly from company to company. For instance, our family living in suburban Cook County would pay $706 per year with Liberty, $769 with Auto-Owners, $813 with Nationwide, or $823 with Farmers, compared to $1,550 with State Farm, $1,645 with Amica, $1,653 with AAA, $1,672 with Progressive, or $1,871 with Hippo. Condo owners and renters will also save money by shopping around for better rates.
The companies that will offer you the lowest rates depends on many factors. In Illinois, companies are permitted to use credit scores to set their rates. With some companies, a poor-credit penalty more than triples their premiums. Insurers increasingly use other secretive and opaque formulas to calculate what you’ll pay for coverage.
Because pricing methods and premiums can dramatically change over time, shop around for a better rate every few years. But don’t wait until the end of your policy term. If you change insurers, your old company must reimburse you for the unused portion of any payments you’ve made.
Although what you’ll pay to insure your home depends largely on variables you can’t control, there are steps you can take—besides shopping for the best rate—to minimize costs:
- Choose a high deductible.
- Avoid buying too much coverage or lousy optional protection.
- Limit the number of claims you make.
- Consider buying your home and auto policies from the same company. Many offer discounts to customers who insure both their homes and cars with them. But keep in mind that such discounts are usually small and won’t make a high-priced insurer a good deal.
You can choose a low-priced company and still get good claims service. We also provide insight on companies’ service performance.