How Much Does Homeowners Insurance Cost?

Cynthia Paez Bowman
Cynthia Paez Bowman
8

Reviews Report

  • 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

Top 5 Cheapest States for Home Insurance

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 YearAverage Annual Premium 
1970$1,961
1980$2,018
1990$1,970
200$1,878
2010$1,741
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 AmountAverage Annual Premium
$500$1,949
$1,000$1,922
$1,500$1,729
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:

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.

  1. Tally the cost of your belongings/house contents to determine how much home insurance you need for personal property.
  2. Collect information about your house, such as age it was built, square footage and other property information.
  3. Install a home security system, deadbolt locks or smoke detectors to help lower your premiums.
  4. 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.
  5. Compare prices from the quotes you collected to choose the best home insurance company.
  6. Review a carrier’s discounts available to further reduce your premium.
  7. 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.
  8. Prepay the annual premium or set automatic payments for a small, additional discount.

Home Insurance FAQ

About the Authors

Cynthia Paez Bowman is a contributing writer for Reviews.com. Over the last two years, she has covered insurance, home security and more. She has been featured in MSN, Bankrate, Coverage.com, The Simple Dollar and GOBankingRates. She has dual bachelors degrees in International Business and Journalism from American University in Washington, D.C. “Is It Getting Harder to Get Home Insurance in High-Risk Areas?” is Cynthia’s favorite story on Reviews.com.