If you’re a homeowner, you know that little is more valuable and precious than the investment of your home. The best way to protect this investment is with a solid homeowners insurance policy that helps you repair or replace your home in case of a fire or other unexpected situation.
Homeowners insurance premiums vary greatly depending on how much your home is worth, where you live, the risk factors you face, your preferred deductible, and more.
Average Homeowners Insurance Cost by State
Susceptibility to natural disasters such as hurricanes, earthquakes, and wildfires is just one way your geographic location can impact your premium costs. In addition, states with bigger cities often have higher premiums as home values are higher in those areas. Finally, state requirements for insurance vary, which can also influence premium costs.
|State||Average Annual Premium|
The Most Expensive States for Homeowners Insurance
Living at a house near the coast can be many people’s dream, but be prepared to pay more for homeowners insurance if the area is also at risk to be affected by hurricanes or storms. Other areas that usually have higher premiums are those in the so-called Tornado Alley or close to seismic faults where earthquakes are frequent. In this list, Louisiana, Florida and Texas are examples of places where intense storms happen often, increasing the average homeowners insurance cost.
Top 5 Most Expensive States for Home Insurance:
- Louisiana: $1,968 average annual premium
- Florida: $1,951 average annual premium
- Texas: $1,893 average annual premium
- Oklahoma: $1,885 average annual premium
- Kansas: $1,584 average annual premium
The Cheapest States for Homeowners Insurance
On the contrary, living in a state where natural hazards are less frequent usually means lower home insurance rates. Basic homeowners insurance will still offer coverage for common perils like rain, fire or smoke, and non-weather related events such as theft.
Top 5 Cheapest States for Home Insurance:
- Oregon: $677 average annual premium
- Utah: $692 average annual premium
- Idaho: $730 average annual premium
- Nevada: $755 average annual premium
- Wisconsin: $779 average annual premium
Average Premium by Age of Home
Older homes have older heating, plumbing, and electrical systems, putting them at greater risk for fire or accidental flooding. Aging materials, especially on the roof, can also make it more likely that owners of older homes will need to file insurance claims. These factors can raise premiums for older homes.
|Construction Year||Average Annual Premium|
|Average Across tiers||$1,914|
Average Premium by Credit Tier
Some insurance companies use customer credit history to predict the likelihood that you’ll file claims. Poor credit history typically corresponds to higher claims because of risk.
However, some states, including California, Maryland, and Massachusetts, have made it illegal for insurance companies to use credit scores to determine premiums.
Average Premium by Deductible
The deductible is the amount you must pay before your insurance covers any costs on a claim. Higher deductibles lower the cost of your premiums, but it’s best to have a healthy amount of savings in the event you do have to file a claim.
|Deductible Amount||Average Annual Premium|
|Average Across tiers||$1,867|
What determines the cost of homeowners insurance?
Along with geographic location, age and condition of your home, here are other factors that affect homeowners insurance cost:
Your personal, as well as your property’s claim history, may be checked to determine your homeowners insurance costs. The more claims you have in your history, the more likely it is your premium will be higher. For example, homes with a history of claims may reflect poor construction materials, making it more likely that additional claims will be made in the future.
Value of Home and Belongings
Valuable homes are more expensive to replace, which results in higher premiums. Furthermore, if your policy covers your belongings, having more possessions also usually results in higher premiums.
Essentially, the more insurance coverage you require, the more your premium costs increase. The Insurance Information Institute (III) provides this introductory guide to calculating the amount of coverage you may need.
Types of Home Insurance Coverage
- Structural Coverage: If there is a fire, hurricane, lightning, fallen tree, or some other disaster, a typical policy will cover the cost of repairing or rebuilding your home.
- Other Structures: Many policies include a coverage for unattached structures in your main policy, but some providers don’t and they would only offer this coverage as an add-on.
- Liability: If someone is injured in your house or your pet caused damages to someone else’s property, liability coverage would protect you from having to pay for large medical bills or legal fees.
- Medical Payments: Should someone be injured on your property or hurt by one of your pets, medical payments coverage covers smaller associated medical bills.
- Alternative Living Expenses (ALE): Say your house is unlivable due to a covered event and you need to live somewhere else while repairs are completed, an ALE coverage is designed to pay for living expenses such as hotel costs and meals.
- Flood Insurance: This type of coverage is excluded from most home insurance policies, so it has to be purchased as a separate policy, one of the most common ways of getting it is with FEMA or a private insurer could also offer it as an add-on.
- Earthquake Insurance: Another coverage that is excluded from most policies, you can buy it as a rider to your main policy, making it more affordable than buying it separately. Not all homeowners insurance providers offer this option.
How to Save on Homeowners Insurance
Here are some tips on how to lower your home insurance costs:
If you take the time to compare quotes from various providers you could save some money. It may take longer, but we assure you that having plenty of options to compare and select the best homeowners insurance for you will be worth it in the long run.
Home reparations and home security devices
Home security systems and other protective devices help reduce the risks associated with having a house, which may help you save money. If you have working smoke detectors, monitored burglar systems and even make home improvements to make your house safer, your insurer could give you a discount.
Choose a higher deductible
Choosing a higher deductible can lower your premium, but you will need to pay more out of pocket if something happens and you file a claim. If you are looking to lower your monthly expenses, this can leave more money in your wallet.
Many homeowners insurance companies offer discounted rates for customers that bundle their home policies with other services, such as car insurance. We researched and found the best companies for bundling home and auto insurance, check them out.
Look for discounts
When you are shopping around for home insurance, it helps to look for all kinds of discounts that might apply to you. Some of the most common ones are burglar or fire alarms, new homebuyer discounts, renovations discounts, claims-free discounts and paperless statement discounts. Additional discounts could apply to people who are in certain professions or even retired.
To create this article, our team evaluated the average annual premium rates for each state presented by the Insurance Information Institute on their 2019 study Facts + Statistics: Homeowners and renters insurance. The information we are showcasing here is based on an HO-3 policy, which is the most common package for homeowner insurance. We also analyze the factors that determine homeowner insurance costs and researched ways of saving on your coverage.
The average annual premium for homeowners insurance in the U.S. is $1,211. The price for a policy varies per individual depending on where you liv and your property’s condition, among other important factors that insurers will consider. Remember that protecting your house against unexpected situations is one of the most important things that homeowners should consider.
A homeowner’s insurance policy covers the rebuilding or repair of your home’s physical structure if it’s damaged by a covered hazard. Typically the damages covered are those caused by fires, lightning strikes, windstorms and hail. It also covers personal property and liability for injuries or damages to other properties. To get broader protection, you can ask for additional coverage, known as endorsements or add-ons, including earthquakes insurance and flood insurance.
There are various policy types as there are needs for each homeowner; thus, there is not a one-size-fits-all answer on how much coverage you need. But there are things that you can do to estimate your homeowners insurance and to understand better how much home insurance you need. To calculate this, we recommend checking the insurance coverage limits and performing a home inventory, including your personal belongings. Another thing is to consider that if you live in an area prone to natural disasters, you should make sure that the policy that you have covers these hazards. Should anything unexpected happen, you will need coverage that will protect all your belongings.
Now that you have a better understanding of how much is homeowners insurance and how its costs are determined, you can start shopping around. If you are ready to make your final decision, we strongly suggest getting a few quotes before making your mind. You can start by comparing the best homeowners insurance company and the cheapest homeowners insurance companies to find one that fits your budget.