- Home insurance premiums range from $380 to $4,378 a year.
- Homeowners insurance cost is most affected by location, with Oklahoma being the most expensive state in the country for coverage.
- There are other factors affecting the average cost of homeowners insurance such as the age of the home, claims history, and policy limits.
One of the most asked questions is “how much is homeowners insurance?” The average cost of homeowners insurance is $1,618 but can vary wildly from state to state. For example, the average home insurance cost in Hawaii is $389 per year — in contrast, the homeowners insurance cost in Oklahoma is $4,378.
Many people look for ways to save money on home insurance. Controlling the cost of homeowners insurance based on location is difficult — unless the homeowner moves. However, there are other factors that can be changed or controlled to lower premiums for cheaper coverage. To find savings, it is a good idea to get a good understanding of what affects homeowners insurance costs.
Average Homeowners Insurance Cost by State
According to average rates from Quadrant Information Services, we found that Oklahoma, Nebraska, and Kansas are among the states with the highest average home insurance costs. Due to the weather volatility in areas prone to tornadoes, homes in these states are generally more expensive to insure.
Data provided by Coverage.com
Top 5 Most Expensive States for Home Insurance
- Oklahoma: $4,378 average yearly premium
- Nebraska: $3,360 average yearly premium
- Kansas: $3,269 average yearly premium
- Arkansas: $2,507 average yearly premium
- South Dakota: $2,334 average yearly premium
Top 5 Cheapest States for Home Insurance
- Hawaii: $389 average yearly premium
- Delaware: $724 average yearly premium
- Vermont: $812 average yearly premium
- New Hampshire: $869 average yearly premium
- Washington: $902 average yearly 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 the geographic location, age and condition of your home, here are other factors that affect homeowners insurance cost:
Claims in the past for events such as stolen items, a dog bite or the aftermath of extreme weather could cause home insurance costs to go up. According to the Insurance Information Institute, one in 20 homes file a claim each year, with wind or hail as the most frequent and fire and lightning the costliest.
An insurance carrier may flag a policyholder as higher-risk and more likely to file more claims after the initial one. The company may offset the cost of the claim by charging higher premiums in the future.
The chart above shows how homeowners insurance rates vary according to the state. But even within a state, premiums could be higher or lower depending on the area. Some areas may be more prone to events such as storms, flooding or wind damage than others in the same state. Or crime for a certain neighborhood leads to an increase in claims — and higher premiums.
The personal property portion of a home insurance policy pays to repair or replace items such as clothing, furniture, jewelry, electronics, instruments, and more. Depending on the value of the items, the personal property limit could affect the home insurance cost. Adding endorsements for higher-value items such as diamonds or collectible watches may also be necessary, since most standard home policies do not typically cover such expensive items. Each endorsement carries its own additional fee.
A home’s condition and features can contribute to homeowners insurance costs. Older homes may have wiring that is no longer up-to-code could be seen as more prone to causing a fire, while homes with swimming pools may be more at a higher risk for liability claims.
Some homes may not be built to withstand the elements as well as a newer house, or may not hold up during extreme weather. Some features that could affect the cost of homeowners insurance include the year built, roof type and age, construction type, and whether the home has features such as security gates or storm shutters.
Coverage limits can be adjusted to lower the home insurance cost. Most policies allow homeowners to set a limit for the dwelling/structures, personal property, liability, and additional living expenses. A home with a dwelling limit of $150,000 will have a far lower home insurance bill than a million-dollar house. Depending on the amounts chosen, coverage could increase — or decrease — significantly.
Components of Home Insurance Policies
The average home insurance policy is made up of several parts. They are:
- Dwelling/Structures: The main part of the home insurance policy, it covers the repair or replacement of a home’s “four walls” or physical structures. Dwelling refers to anything attached to the home, such as a porch or garage. Structures refers to non-attached items such as a tool shed, gazebo, or free-standing carport. There is no standard dwelling limit because the amount depends on the value of the home.
- Personal property: This portion covers personal belongings such as furniture, clothes, appliances, keepsakes, and more. The standard coverage amount is typically 50% to 70% of the dwelling limit.
- Personal liability: Personal liability is designed to protect the homeowner against legal issues due to injuries or damages that occurred to guests or third parties. It includes injuries if a pet bites someone, even if the bite happened off the property. LImits are typically $300,000 to $500,000 in coverage. However, the higher the coverage limit for personal liability, the higher the homeowners insurance cost.
- Additional living expenses: If a home burns down or cannot be occupied after a covered peril, additional living expenses coverage pays for the homeowner’s costs to live elsewhere while the home is repaired or rebuilt. Covered expenses include reasonable amounts for food, toiletries, and housing/hotel stays. The daily limit depends on the overall limit of a home insurance policy and can be adjusted higher or lower.
- 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 Lower Home Insurance Costs
To get the best rate on your home insurance, consider taking the following steps.
- Tally the cost of your belongings/house contents to determine how much home insurance you need for personal property.
- Collect information about your house, such as age it was built, square footage and other property information.
- Install a home security system, deadbolt locks or smoke detectors to help lower your premiums.
- Collect quotes from several home insurance carriers using the information you collected. Start with your car insurance carrier — you may get the lowest rates when you bundle home and auto insurance.
- Compare prices from the quotes you collected to choose the best home insurance company.
- Review a carrier’s discounts available to further reduce your premium.
- Raise the deductible, keeping in mind to not go overboard — you may need to pay the amount out of pocket one day if you file a claim.
- Prepay the annual premium or set automatic payments for a small, additional discount.
Home Insurance FAQ
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.
The average homeowners insurance covers the cost of replacing, rebuilding or repairing a home and its contents against covered perils. In addition, home insurance includes liability insurance to protect the homeowner against legal costs, as well as medical bills to cover small injuries guests suffered on the property. Covered perils include theft, fire, windstorm, hail, falling objects and more. However, flooding and earthquake damages are not covered in a standard home policy and would need to be added.
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.
Average homeowners insurance costs are affected by several factors. The most significant include location, the value, age and condition of a home, previous claims and the policy limits set.