Largest Homeowners Insurance Companies

How do the biggest homeowners insurers stack up?

State Farm and USAA make the list of the 10 biggest homeowners insurers in the U.S., according to the Insurance Information Institute (they're No. 1 and 6, respectively), and both make our Best Reviewed list. Other big insurers hover around average in reviews -- some better, and some worse.

American Family, the nation's ninth-largest homeowners insurance company, does quite well in reviews -- but it's available in only 19 states (Arizona, Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Nevada, North Dakota, Ohio, Oregon, South Dakota, Utah, Washington and Wisconsin). If you live in those states, American Family Home Insurance might be worth a look; it gets respectable financial strength ratings, above-average overall ratings in two major customer surveys and is accredited by the Better Business Bureau. Insurance regulators did find American Family at fault in customer complaints a bit more often than the national median for home insurers in 2009, according to data from the National Association of Insurance Commissioners. But overall, American Family does better in reviews than most of the big homeowners insurance companies.

Liberty Mutual (the fourth-biggest homeowners insurer), Nationwide (No. 7) and The Hartford (No. 10) all get average-to-good marks for financial strength. They all get average marks for customer service and claims handling in big customer surveys, too -- although Liberty Mutual does make the AAJ's list of the "Ten Worst Insurance Companies" for some of the same reasons as State Farm.

Trailing in reviews are Allstate (No. 2), Zurich Financial/Farmers (No. 3) and Travelers (No. 5). All three get average marks for customer service in J.D. Power and Associates' latest survey, but they cluster at the very bottom of another major survey, with more customers complaining about general problems with their homeowners policy claims. Customers in that survey specifically downgrade Allstate and Farmers for underpaying on claims -- and indeed, AAJ names both companies to its 10-worst list, saying Farmers rewarded low-paying adjusters with pizza parties and Allstate has adopted a deliberate moneymaking strategy that focuses on "reducing the amount of money it paid in claims, whether or not they were valid." Although these companies get passable financial-strength ratings, reviews reveal plenty of better choices.