More on Home Insurance
The average annual homeowners insurance premium is around $1,200, but costs vary widely from state to state and house to house.
Updated January 22, 2021|3 min read
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Selecting a homeowners insurance policy is one of the more important purchasing decisions you’ll make after finding a new home. Homeowners insurance protects your assets — the home itself, personal property within the home, and legal and medical bills if someone is injured on your property. It's also required by most mortgage companies.
According to the National Association of Insurance Commissioners, the average annual homeowners insurance premium is $1,211 . Homeowners insurance costs differ from state to state for a number of reasons. If a state has a lot of major cities and more densely populated areas, it’s more likely to have a higher average premium, as home values are generally higher. States in areas with a higher incidence of natural disasters also generally have higher premiums than states that don’t. Homeowners insurance premiums are also dependent on the age and rebuild value of your home and the insured limits in your policy.
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Key takeaways
Homeowners insurance costs around $1,200 a year on average
Factors like your insured limits, credit history, and home location impact how much you pay
Insurance companies offer discount opportunities for both weatherproofing and safeguarding your home
State | Average annual premium | State | Average annual premium |
---|---|---|---|
Alabama | $1,433 | Montana | $1,174 |
Alaska | $959 | Nebraska | $1,481 |
Arizona | $825 | Nevada | $755 |
Arkansas | $1,373 | New Hampshire | $972 |
California | $1,008 | New Jersey | $1,192 |
Colorado | $1,495 | New Mexico | $1,017 |
Connecticut | $1,479 | New York | $1,309 |
Delaware | $833 | North Carolina | $1,086 |
District of Columbia | $1,235 | North Dakota | $1,253 |
Florida | $1,951 | Ohio | $862 |
Georgia | $1,267 | Oklahoma | $1,885 |
Hawaii | $1,102 | Oregon | $677 |
Idaho | $730 | Pennsylvania | $931 |
Illinois | $1,056 | Rhode Island | $1,551 |
Indiana | $1,000 | South Carolina | $1,269 |
Iowa | $964 | South Dakota | $1,202 |
Kansas | $1,584 | Tennessee | $1,196 |
Kentucky | $1,109 | Texas | $1,893 |
Louisiana | $1,968 | Utah | $692 |
Maine | $882 | Vermont | $918 |
Maryland | $1,037 | Virginia | $999 |
Massachusetts | $1,488 | Washington | $854 |
Michigan | $942 | West Virginia | $940 |
Minnesota | $1,348 | Wisconsin | $779 |
Mississippi | $1,537 | Wyoming | $1,156 |
Missouri | $1,285 |
Check out our state-by-state homeowners insurance guide to learn about homeowners insurance in your state.
Extreme weather is a common theme in states with high homeowners insurance premiums. Louisiana, Texas, and Florida are coastal states and are more susceptible to strong storms, and Oklahoma and Kansas are right in the middle of Tornado Alley.
Louisiana: $1,967
Texas: $1,937
Florida: $1,918
Oklahoma: $1,875
Kansas: $1,548
On the flip side, you may find that homeowners 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 high homeowners insurance premiums run, it’s helpful to understand why policies are cheaper in certain states and more expensive in others. As you can see, the following states aren’t likely to experience tropical storms and aren’t as prone to catastrophic tornadoes or other disasters.
Oregon: $659
Utah: $664
Idaho: $703
Nevada: $742
Wisconsin: $762
Some insurance companies simply charge less for homeowners insurance than other companies. If you insure your home with a company intended for high-value homes owned by high-net-worth homeowners — like AIG or Chubb — you’ll pay more for coverage simply because the insurance products and customer service are more comprehensive and personalized than with a standard carrier like Travelers or Stillwater.
Certain insurance companies also have a different risk tolerance than others, and that can mean lower rates. For example, if a carrier doesn’t insure homes that are at high risk of being damaged by a natural disaster then rates might be lower across the board.
Of the homeowners insurance companies offered by Policygenius, Stillwater quoted customers the lowest rates, while Chubb quoted customers the highest rates.
Insurance company | Average annual premium |
---|---|
AIG | $3,564 |
Chubb | $5,948 |
Encompass | $1,966 |
Hippo | $1,548 |
MetLife | $2,340 |
Nationwide | $2,044 |
Plymouth Rock | $1,134 |
Progressive | $1,366 |
Safeco | $1,680 |
Stillwater | $1,122 |
Swyfft | $1,286 |
Tower Hill | $1,465 |
Travelers | $1,415 |
Average annual premium courtesy of Policygenius quoting data
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Your homeowners insurance costs are largely determined by your home’s insured value, or the dwelling coverage limit in your policy. This is the part of your policy that reimburses you for covered damage to the structure of the home. The more dwelling coverage you have, the higher your homeowners insurance premiums will be.
Below is the average annual premium for a standard homeowners insurance policy by insured value range, according to the NAIC.
Insurance range | Average annual premium |
---|---|
$49,999 and Under | $645 |
$50,000 to $74,999 | $748 |
$75,000 to $99,000 | $826 |
$100,000 to $124,999 | $888 |
$125,000 to $149,999 | $937 |
$150,000 to $174,999 | $981 |
$175,000 to $199,999 | $1,018 |
$200,000 to $299,999 | $1,114 |
$300,000 to $399,000 | $1,272 |
$400,000 to $499,000 | $1,482 |
$500,000 and Above | $2,148 |
Similar to life insurance underwriting, your homeowners insurance company will examine potential risks when determining your rates. Some of these risks you have control over, and some are simply beyond your control.
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 past claims or live in an area with a high number of insurance claims, you’ll have higher premiums.
Credit history – Most states allow homeowners insurance companies to check an individual’s credit history to determine their premium.
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, meaning your rates will be higher due to the heightened risk of fire and plumbing hazards. Homes with aluminum wiring are typically excluded from dwelling coverage unless proper safety modifications are made by a licensed electrician. Companies will also suggest a complete copper rewiring to minimize risk.
Attractive nuisances : Insurers consider additions like a pool, tree house, or trampoline to be an “attractive nuisance.” Attractive nuisances may result in increased personal liability coverage requirements or a company may deny you coverage altogether.
How much coverage you have – When buying homeowners insurance, the insurance company largely determines your dwelling coverage amount (along with three other components that are set as a percentage of your dwelling coverage limit), but you also have the option of customizing the policy to suit your needs. That could mean upgrading your personal property coverage to replacement cost rather than actual cash value or opting for a higher maximum personal liability coverage amount than $500,000. Insurance companies also offer a wide range of additional protections, or coverage endorsements, to make your policy more comprehensive. The more robust your policy is, the higher your premiums will run you.
Deductible amount – The amount you pay out of pocket in the event of a claim. 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.
Homeowners insurance 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.
A standard homeowners insurance policy is made up of six different components of coverage, and each component offers a different type of protection.
Below is an example of coverage limits in a standard HO-3 homeowners insurance policy:
Coverage type | Coverage limit example |
---|---|
Dwelling coverage | $300,000 |
Other structures coverage | $30,000 (10% of dwelling coverage) |
Personal property coverage | $150,000 (50% of dwelling coverage) |
Loss-of-use coverage | $60,000 (20% of dwelling coverage) |
Liability coverage | $100,000-500,000 |
Medical payments coverage | $1,000-5,000 |
Dwelling coverage – Coverage for your home should equal its full replacement cost. Not to be confused with the home’s purchase price or market value, the replacement cost should reflect what it’d cost for a full rebuild.
Other structures coverage – Protects the garage, guesthouse, fences and driveways. Other structures coverage is typically insured for 10% of your dwelling coverage limit.
Personal property coverage – Protects personal belongings both inside and outside of the home. Personal property coverage is typically insured for 50% of your dwelling coverage limit.
Loss-of-use coverage – Covers additional living expenses while your home is being repaired or rebuilt. Loss-of-use coverage is typically insured for 20% of your dwelling coverage.
Liability coverage – Should be enough to cover all of your financial assets — like the home itself, investments, and automobiles in the event you’re sued. If $500k isn’t enough coverage, you can add an umbrella policy to increase your liability protection.
Medical payments to others – The amount you’ll pay out if someone is injured in your home and requires medical expenses on your behalf. Policies should typically have anywhere from $1,000-5,000 in medical payments coverage.
➞ Learn more about what homeowners insurance covers here.
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 homeowners insurance rates, you should consider shopping around. Policygenius 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.
The average cost of homeowners insurance is around $1,200 a year, but many factors play a role, including the details of your property and which state and city you live in. Louisiana has the most expensive home insurance, at an average of over $1,900 a year, and Oregon has the cheapest average home insurance at around $650 a year.
The replacement cost of a home can vary from company to company. Factors like your house's square footage, local construction costs, your roof, and even the style of the house can come into play. A licensed expert can help you make sure you get adequate replacement cost coverage.
Home insurance covers your home and personal property, along with providing liability protection and covering loss-of-use costs if your home is damaged and you need to stay in a hotel. Exact coverage will depend on your policy; fire, hail, theft, and burst pipes are typically covered, but earthquakes and flooding are not and require separate policies at an additional cost. Note that your coverage will only kick in after you meet your deductible, and a lower deductible will mean higher premiums. Check your policy and talk to an expert to find out exactly what coverage you have and need.
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