How much does homeowners insurance cost?

The average cost of homeowners insurance in the U.S. is $1,249 per year, according to the National Association of Insurance Commissioners (NAIC). [1]  

But homeowners insurance rates vary widely depending on several factors, especially location. If you live in a major city or a more densely populated area, that usually means higher rates, because home values are probably higher (and so are risks like theft). 

Areas that are more prone to natural disasters also generally have higher home insurance rates than places that don’t. Your premium is also dependent on the age of your home and how much it would cost to rebuild it, as well as the limits you set in your policy.

Average homeowners insurance cost by state

Check out our state-by-state homeowners insurance guide to learn about home insurance in your state.

The most expensive states for homeowners insurance

Extreme weather is a common theme in states with high homeowners insurance premiums. Louisiana, Texas, Rhode Island, and Florida are coastal states and are more susceptible to strong storms, and Oklahoma is right in the middle of Tornado Alley.

1. Louisiana: $1,987

2. Florida: $1,960

3. Texas: $1,955

4. Oklahoma: $1,944

5. Rhode Island: $1,630

The cheapest states for homeowners insurance

On the flip side, you may find that home insurance is more affordable if you live in a state that experiences milder weather.

Because you’re at less risk for weather damage, your premiums are going to be cheaper. And while we don’t advise moving somewhere strictly based on how low homeowners insurance premiums run, it’s helpful to understand why policies are cheaper in certain states and more expensive in others. The following states aren’t as prone to catastrophic tornadoes, tropical storms, or other disasters.

1. Oregon: $706

2. Utah: $730

3. Idaho: $772

4. Nevada: $776

5. Wisconsin: $814

Average homeowners insurance rates by company

Rates also vary from company to company. Some insurance companies simply charge more for home insurance than others, especially if they offer top tier coverage or accept higher levels of risk.

Of the homeowners insurance companies offered by Policygenius, Plymouth Rock offers customers the lowest rates, while MetLife has the highest rates.

Average annual premium courtesy of Policygenius quote data, and based on real quotes offered to real customers as of August, 2020

→ Learn more about the cheapest home insurance companies 

Average homeowners insurance premium by coverage amount

Your homeowners insurance rate is largely determined by the dwelling coverage limit in your policy. Dwelling coverage is the part of your policy that reimburses you for covered damage to the structure of the home, and should be equal to the amount it would cost to fully rebuild your home after a disaster. 

The more dwelling coverage you have, the higher your premiums will be. Below is the average annual premium for a standard homeowners insurance policy by dwelling coverage range, according to the NAIC.

What factors determine the cost of homeowners insurance?

Your homeowners insurance company will consider lots of different factors when determining your rates. Some of these are things you have control over, like whether your roof is in good condition, and some are simply beyond your control, like whether or not your area has frequent tornadoes.

Factors that influence your home insurance rates

• Location: Location is one of the biggest homeowners insurance premium cost factors. Weather, population density, proximity to fire-prone forested areas or car accident-prone intersections and roads, and proximity to a fire station are all taken into account when determining rates.

• Insurance claim history: If you’ve filed home claims in the past few years or live in an area with a high number of home insurance claims, you’ll have higher premiums.

• Credit history: Most states allow insurance companies to check your credit history. A higher credit score means lower rates, and vice versa

• Age of your home: That Victorian house you just bought in a historic neighborhood may be charming, but chances are it has older wiring and plumbing, which means higher rates. Homes with aluminum wiring typically can’t get normal coverage unless proper safety modifications are made by a licensed electrician. Companies may suggest completely rewiring to minimize risk.

• Attractive nuisances: Insurers consider additions like a pool, tree house, or trampoline to be “attractive nuisances,” meaning they might tempt people onto your property, raising the risk that someone will be injured (and raising your rates). 

• How much coverage you have: When buying homeowners insurance, the insurance company will set your dwelling coverage amount, but you also have the option of customizing the policy to suit your needs. That could mean upgrading your personal property coverage to cover your valuable art or collectibles, but you’ll pay higher rates for more coverage.

• Your deductible: This is the amount you pay out of pocket for every claim that you file. A standard policy deductible is typically anywhere from $500 to $2,000, but some companies may offer even higher deductible options. The general rule of thumb in insurance is lower deductible-higher premiums; higher deductible-lower premiums.

• Your discounts: Homeowners insurance companies offer numerous discounts and bundles that can decrease your premiums. A few common ways to save are with home and auto insurance bundling discounts; loyalty discounts if you’re with the same company for a set number of years; and discounts for infrequent or zero claims.

How to save on homeowners insurance

Along with insurance bundles, loyalty discounts, and infrequent claims, you can also lower your homeowners insurance premiums by increasing the number of safety and security features in your residence by installing the below features:

• Smoke detectors

• Security alarms

• Sprinkler system

• Deadbolts on doors

• Fire extinguishers

• Wind protection

If you’re looking to lower your home insurance rates, you should consider shopping around. Policygenius agents will look at your policy, compare your coverage and cost with other insurers, and help you determine if you can get a better deal with another company.

→ Learn more about how to save on homeowners insurance