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Best digital insurance companies of 2021

Fact-checked with HomeInsurance.com

    Article Highlights

    Digital insurance is a modern solution for an increasingly technological world, with clear advantages to benefit from. There are many reasons why the best insurance companies are developing a digital approach to insurance, with new technologies offering improved customer service with more immediate response times. Greater efficiency in shopping and comparing policies is also more possible, because digital insurance providers specialize in easy-to-use online tools that help you shop for coverage, purchase a new policy and file claims as needed.

    For customers, it’s a win-win. There is better price transparency, making it easier to shop prices. Meanwhile, by moving their operations online, many insurance companies have been able to significantly improve the efficiency and convenience of shopping for and managing a new policy, no matter what kind of insurance you need.  

    The best digital insurance companies

    • Lemonade: Best for home insurance
    • Kin: Best for custom home insurance
    • Root: Best for safe drivers
    • Swyfft: Best for homeowners with a claims history
    • Metromile: Best for drivers with low mileage

    Lemonade: Best for home insurance

    Established in 2015, Lemonade is a peer-to-peer insurance provider that provides coverage to about half of the country. While Lemonade does not currently offer auto insurance, the company specializes in home insurance, renters insurance and pet insurance to keep the homefront secure. Basic insurance coverage includes critical protections like personal property coverage with replacement value, medical payments, personal liability, off-premises and loss of use coverage, for covered losses. Homeowners also have the option to add on protections like insurance for jewelry and fine art. 

    Pros

    • You don’t need to work with an agent to purchase Lemonade insurance.
    • Lemonade donates a portion of unclaimed insurance premiums to a non-profit of your choice.
    • Enjoy immediate online support through the app’s A.I., Jim.  

    Cons

    • Service is only limited to 25 states.
    • Lemonade offers only insurance solutions for your home.

    Kin Insurance: Best for custom home insurance

    Kin Insurance is a great choice when you have unique needs for your home insurance. It covers not only traditional homes but also older homes, which can be more complicated to insure. Kin also provides condo and renters insurance options. If you need help, customer service is available via phone, email or online chat, so you can choose the method that works best for you. 

    Pros

    • Kin offers flexible home insurance options for all types of properties.
    • Friendly agents can help you find the right coverage for your needs. 
    • Kin has strategic partnerships that can help reduce your premiums, like home security and flood detection. 

    Cons

    • Service is only available in five states.
    • Required to purchase a policy directly through an agent.

    Root: Best for safe drivers

    Root is one of the newest companies in the digital insurance industry, but it is no less impressive. Root has its own app that tracks your driving habits to price your auto insurance quote, saving its policyholders hundreds of dollars each year. The app also gives you full control of your policy, allowing you to make changes to your plan, access ID cards and file claims using your phone. Because of this, Root offers no human agents in its AI-driven customer service sector. 

    Pros

    • Root offers an iPhone and Android-friendly mobile app to track your auto insurance.
    • The entirely digital experience means instant service and assistance when you need it. 
    • Root specializes in extensive, robust tools to help you maintain safe driving habits.  

    Cons

    • Not everyone is approved for Root car insurance, only those who qualify based on safe driving habits.
    • Root’s services are limited to just 19 states, but it is expanding rapidly.
    • Almost all of the policy management must be conducted through the app

    Swyftt: Best for homeowners with a claims history

    Swyftt is one of the more forgiving insurance providers. It offers multiple coverage options and competitive pricing; even if you have a history of claims, you won’t automatically be penalized for previous losses at your address. Instead, it uses a proprietary scoring system to determine the risk for your specific address. Available in seven states, Swyftt is showing early indications of positive customer feedback, as indicated by an A rating from the Better Business Bureau (BBB). 

    Pros

    • Swyftt makes it easy to receive an instant quote for homeowners insurance.
    • Apartment, condo and commercial insurance is also available.
    • Policyholders can benefit from easy online claims.

    Cons

    • Swyftt does not publicly publish its discounts for insurance.
    • Service is limited to just a handful of states.

    Metromile: Best for drivers with low mileage

    Established in 2011, Metromile offers auto insurance to eight states. Like Swyftt, Metromile uses its own internal system to track your driving habits. Before you can get a quote, there is a two-week trial period where Metromile assesses your driving habits through the tracker and then prices your coverage based on that performance. With the Metromile Pulse, you will have to be a safe driver to receive coverage, but you can also save money based on your driving habits.  

    Pros

    • With Metromile’s auto insurance, you pay for what you use with mileage-based premiums. 
    • Fantastic tools can be utilized, including Metromile Pulse and the Metromile app. 
    • Safe drivers can earn serious savings off their total premiums.

    Cons

    • Coverage is limited to just eight states.
    • Only auto insurance is available.

    What is digital insurance?

    A digital insurance company uses modern technology to primarily sell and manage insurance policies. 

    While some companies offer both traditional and digital services, some companies have done away with brick-and-mortar locations altogether. Instead, these companies operate primarily (or entirely) online, using the digital realm as a way to eliminate overhead and keep costs low. These savings are often then passed on to the policyholders. 

    Digital insurance companies can potentially provide greater efficiency in the purchase and management of your insurance policies, bringing you a variety of coverage options and insurance solutions that fit your unique needs and circumstances.

    How to choose the digital insurance company for you

    To find the best digital insurance company for you, there are a few key factors to consider:

    1. Compare policies.

    Not all providers will offer the kind of insurance that you need. For example, Lemonade does not provide auto insurance, but it’s a fantastic choice to consider for home, renters and pet insurance. Be sure to also compare the types of coverage that are available to you, taking into account any additional a la carte protections that you may need.   

    2. Check coverage for your address.

    Instead of operating across the entire country, some insurance companies focus on a specific region. It can be especially convenient because these providers have specialized knowledge of your local area and can advise you of regional risks. However, this may also mean more limited resources with fewer resources. If you end up moving in the future, you may have to find a new provider if you move outside of your provider’s service area. 

    3. Review pricing.

    Pricing can vary dramatically based on the provider and coverage that you choose. The average cost of car insurance, for example, depends on the kind of insurance that you need and the type of coverage that you choose. Minimum coverage costs significantly less than a full coverage policy but you may need better protection with higher coverage levels. Before you choose a policy, be sure to compare pricing from multiple providers, whether looking for the best rates for home or auto insurance.    

    4. Explore digital tools. 

    Digital tools are especially important when you work with a digital insurance company. There may not be a physical branch for you to visit, so it is critical that a digital insurer has the proper tools to help you manage your policy and track claims. 

    5. Check ratings.

    Finally, take the time to research customer satisfaction and financial ratings to ensure that the company you choose is a good pick. Consider financial stability and customer service scores to see how well an insurance company can pay out insurance claims. AM Best scores a company’s financial strength, while J.D. Power ratings show a company’s customer satisfaction levels.  

    How much does digital insurance cost?

    How much you pay for digital insurance depends on the kind of insurance that you need, as well as variables unique to each policyholder. 

    Digital homeowners insurance

    The average cost of homeowners insurance in the United States is around $1,220 per year (according to 2017 rates from the Insurance Information Institute), but that can vary based on several factors. The cost of home insurance greatly depends on where you live. 

    Digital life insurance 

    The cost of your life insurance premium depends on factors like your age, health, medical history, and lifestyle factors, like whether you are a smoker or work in a high-risk profession. The price also depends on the kind of life insurance that you choose and whether you choose term life insurance or a permanent life insurance option. 

    According to Progressive, the average cost of a 10-year life insurance for $250,000 only costs up to $17 a month for a healthy 40-year-old adult.

    Digital auto insurance

    Auto insurance is another kind of insurance that can vary significantly in price depending on where you live. Quadrant information services indicates the average cost of car insurance in 2020 was $1,555 per year, but that price changes significantly from state to state. If you live in Maine, the average car insurance policy is only $831, while car insurance could cost you as much as $2,351 for Louisiana and $2,587 in Florida as two of the most expensive states for car insurance in the U.S.

    The takeaway

    • Digital insurance companies can offer one or several types of insurance, including auto, renter’s, homeowners and life insurance. 
    • Homeowners pay an average cost of $1,220 per year.
    • The average life insurance policy can cost $15 to $17 per month. 
    • The average cost of car insurance is $1,555 per year.
    • Carefully compare each company before selecting the best digital insurance provider for you.  

    Digital insurance is quickly becoming the way of the future, allowing Americans to benefit from immediate and convenient service for their insurance policies.  Whether you need homeowners insurance, life insurance or auto insurance, digital insurance companies may allow you to get the coverage you need without delay. All you need is a computer or a phone, and you can be on your way.

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