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What Is the Average Cost of Homeowners Insurance?

With 97.2% of 2019 home insurance claims related to property damages and theft according to the Insurance Information Institution, homeowners insurance coverage is becoming increasingly essential for protecting your property. But how much will it cost you?

Americans pay, on average, $1,213.89 for homeowners insurance but the average per state is wide-ranging. Keep reading to learn how much home insurance costs in your state and tips for securing the best rate.

Homeowners Insurance Cost by State

Americans pay $1,213.89, on average, for homeowners insurance annually. That amounts to an average monthly premium of $115.60. After collecting over 100,000 quotes, we observed the extensive price range based on state — homeowners insurance can cost anywhere from $436.24 to $2,891.62.

Americans pay, on average, $1213.89 for homeowners insurance but the average per state is wide-ranging.

Rank

State

Average Annual Cost

1

Oklahoma

$2,891.62

2

Nebraska

$2,485.97

3

Kansas

$2,327.09

4

Mississippi

$2,259.53

5

New Mexico

$2,234.38

6

Arkansas

$2,048.25

7

South Dakota

$1,925.38

8

Tennessee

$1,836.46

9

Missouri

$1,794.98

10

North Dakota

$1,700.08

11

Minnesota

$1,614.15

12

North Carolina

$1,513.98

13

Colorado

$1,513.23

14

Kentucky

$1,492.77

15

Montana

$1,437.87

16

Rhode Island

$1,393.49

17

Iowa

$1,319.62

18

Louisiana

$1,318.73

19

Wyoming

$1,248.64

20

Alabama

$1,185.24

21

West Virginia

$1,183.45

22

South Carolina

$1,165.42

23

Georgia

$1,115.09

24

Illinois

$1,062.53

25

Texas

$1,050.06

26

Alaska

$1,046.22

27

Connecticut

$1,012.41

28

Maryland

$1,003.01

29

New York

$961.52

30

Florida

$919.79

31

Indiana

$883.78

32

Nevada

$883.73

33

Massachusetts

$867.79

34

Arizona

$844.20

35

Delaware

$836.89

36

Virginia

$835.87

37

California

$799.71

38

New Hampshire

$788.56

39

Vermont

$772.45

40

Ohio

$759.38

41

Wisconsin

$755.97

42

Michigan

$743.16

43

Pennsylvania

$716.88

44

Idaho

$684.22

45

Washington

$662.85

46

Maine

$654.20

47

New Jersey

$619.83

48

Utah

$555.61

49

Oregon

$532.10

50

Hawaii

$436.24

Find Cheap Homeowners Insurance Quotes

States With the Most Expensive Homeowners Insurance Rates 

Oklahoma, Nebraska, Kansas, Mississippi and New Mexico are the costliest states for homeowners insurance. Homeowners in these states can expect to pay 84% to more than double the national average. New Mexico and Oklahoma, specifically, have relatively high violent crime rates that could increase the likelihood of burglaries.

states with the highest home insurance rates

States With the Cheapest Homeowners Insurance Rates

Hawaii, Oregon, Utah, New Jersey and Maine offer the cheapest homeowners insurance rates on average, paying 46% to 64% below the national average. Three out of five states were western states (HI, OR, UT) and the other two were in the northeast region (ME, NJ).

states with the cheapest home insurance rates

What Does Homeowners Insurance Cover?

How do insurance companies calculate your rates? Insurers consider six coverages when determining homeowners insurance rates:

  1. Dwelling coverage covers perils listed in your policy (e.g., fire, explosion, windstorm) that could damage your home's structure and built-in appliances. Dwelling coverage doesn't protect against floods, earthquakes or routine wear and tear. Up to 10% of this coverage protects detached structures.

  2. Personal property coverage protects your belongings if they are damaged, stolen or destroyed in a covered incident. It covers 50% to 70% of your home's dwelling limits to protect your furniture, electronics, clothing and jewelry. Riders and endorsements can cover more valuable items.

  3. Other structures coverage insures facilities not connected to your main home structure, such as sheds, gazebos, fences and detached garages. It accounts for 10% of the coverage amount on your home's structure or dwelling coverage. 

  4. Loss of use pays for your additional living expenses (ALE) up to your policy limits when you must live elsewhere because of a covered incident. For instance, your policy may pay for meals and hotel costs if your home is undergoing repairs. 

  5. Personal liability coverage protects your legal liability when someone suffers bodily injuries or property damage at your home, such as if a guest is bitten by your pet. Coverage also extends to when one of your trees falls and damages your neighbor's house. 

  6. Medical payments coverage is optional and pays the medical expenses of anyone injured on your premises, no matter who's at fault.

Factors That Affect Your Homeowners Insurance Premiums

Insurance carriers consider other factors when calculating homeowners insurance rates, including property features, neighborhood and dwelling rebuilding costs. The insurance industry also factors in your zip code, state laws, credit score, deductible and coverage limits.

  • Home's age: Older homes are more expensive to insure than newer ones because it costs more money to repair them.

  • Roof condition: If you have an older roof, it may not withstand a severe windstorm or hail. Your insurer also considers the roof's materials, which may be expensive to replace. Some materials are also less likely to be damaged.

  • Updated features: Attractive nuisances can raise the rates of your homeowners insurance. They include trampolines, swimming pools and other features that have an increased chance of causing injuries to someone on your property.

  • Coverage limits: You'll pay more for insurance if you have a higher liability, property and dwelling coverage limit.

  • Deductible: You can lower your home insurance rates if you pay a higher deductible. If you must meet a higher amount for covered claims, make sure you have cash on hand to pay it.

  • Claims history: You'll typically pay a higher premium if you have a history of filing multiple homeowners insurance claims.

  • Credit score: Good-credit homeowners often qualify for lower home insurance premiums. Conversely, insurance companies typically charge higher rates for low-credit homeowners.

  • Pets: If you have a dangerous animal breed, you could pay higher insurance rates. Some insurers will even deny you coverage. These include aggressive dog breeds and dangerous exotic pets.

  • Zip code: Homeowners typically pay higher insurance rates when they live if they live in an unsafe area. Carriers also estimate how far your home is located from a fire or police department. They also consider whether your neighborhood has high rates of storms, earthquakes or wildfires.

Tips To Lower Your Homeowners Insurance Costs

Is homeowners insurance in your state higher than you expected? Here are a few tips for lowering your rates:

1. Bundle Your Insurance Policies With One Carrier

When you purchase two or more insurance policies from the same company, you could earn a 5% to 25% discount. According to Forbes Magazine, the average savings for bundling home and auto insurance is 14 percent. Some insurers such as Allstate, Farmers and Nationwide, offer discounts that exceed 15%.

2. Add Safety Features

Your insurance company may reward you with homeowners insurance 5% to 15% discount when you install recommended home safety devices, such as:

  • Smoke detectors

  • Deadbolt locks

  • Fire extinguishers

  • Storm shutters

  • Security systems

  • Sprinkler systems

  • New or reinforced roof

Before purchasing a system, contact your insurance company to see which safety systems qualify for a discount. Your insurance agent may recommend brands and tell you how much of a price cut you'll receive.

3. Select the Appropriate Coverage Type for Your Home

Review your policy annually to see if you're carrying any coverages that you no longer need for your home's valuables. For instance, if you have high-end computers that are no longer worth $8,000, it may be time to reduce your policy limits or eliminate an add-on endorsement.

Before eliminating coverage, make sure you have enough insurance to protect your home, other structures and personal belongings.

4. Increase Your Deductible

Deductibles are shared costs you must pay toward a covered loss before your insurance kicks in to pay a claim under your policy's term. You can save money on premiums if you set a higher deductible, but make sure you can afford to pay it if something goes wrong.

Your insurance company may require a separate deductible if you live in an area with frequent windstorms, wildfires, hail, earthquakes, hurricanes and other disasters.

Homeowners insurance can cost anywhere from $436.24 to $2,891.62 a year.

5. Improve Your Credit Score

Insurance companies are using credit information as a factor to set rates for their customers. You can lower your cost of home insurance premiums with a good credit score.

To clean up your credit, reduce your debt-to-income ratio. Pay your bills on time, and don't get more credit than you can afford. Additionally, keep your credit balances low. Check your credit record regularly to correct any errors and ensure your credit history is as accurate as possible.

6. Understand How Different Factors Affect Your Home Insurance Rates

Selecting the right home in your area could decrease your home insurance premiums by 5% to 15%. The III says East coast homeowners should select brick homes because they are more resistant to coastal wind damage. In earthquake-prone areas, like California, they recommend wooden frame houses because they are more likely to survive these disasters.

Additionally, insurers may give you a price break based on your distance from first responders or if you live close to a fire hydrant. You can also receive a premium cut when your area has a professional fire department instead of a volunteer one.

You'll also receive reduced homeowners rates if you own a home whose electrical, heating or plumbing system are less than 10 years old.

7. Disaster-Proof Your Home

Contact your insurance company to learn what steps you can make to fortify your home against windstorms and other natural disasters. You may save on premiums if you add storm shutters or better roofing materials. You can also retrofit older homes with safety features.

8. Find Homeowners Insurance Discounts

Your insurance company may offer home insurance discounts, including discounts to retired people because they have more time to maintain their homes.

9. Exclude Land Value

Speak with your insurance agent to find out if your insurance covers your land value. If so, you should consider lowering your coverage. You only need coverage to rebuild your home and to cover belongings and other structures. If you include the land, you'll pay a higher premium than necessary.

Frequently Asked Questions

What is the average yearly cost of homeowners insurance?

The average yearly cost of homeowners insurance is $1,387 per year. Your actual cost can change based on your state, county, home characteristics, claims history and personal information.

What is covered by homeowners insurance?

Homeowners insurance will protect your home's structure and personal belongings against various perils, including fire, windstorms and theft. You will also receive personal liability protection in case somebody suffers an injury or loss while on your property. Most policies don't protect against earthquakes, floods, mold and more and will require you to purchase a separate policy.

Is homeowners insurance based on property value?

Pricing for dwelling coveragetypically considers the rebuild costs of your home, not its fair market value. Other factors that affect your home insurance rates include home's location, age and your past claims history.

An Affordable Homeowners Insurance Policy Can Cover All Your Needs

The average homeowners insurance rate in the U.S. may be over $1,000 a year, but you can lower your premiums by bundling your homeowners insurance policies, buying a less risky home and searching for discounts. 

Shopping around for new coverage can also save you money on your homeowners insurance coverage. Compare rates from the top homeowners insurance companies using SmartFinancial, to find the most affordable home insurance policy in your area. To receive a free quote, answer a few questions after entering your zip code below.

Methodology

We collected over 100,000 home insurance quotes from multiple counties and insurance companies in each state to produce an average price per state. We then averaged the state averages to obtain a national average price for home insurance in the United States. Home insurance quotes were based on homes with a $250,000 dwelling value.

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