How much does homeowners insurance cost?
How much does homeowners insurance cost?
$1,800 – $3,200 average cost per year
Average home insurance cost
Home insurance costs $1,800 to $3,200 per year on average, but annual home insurance prices range from below $500 to more than $6,000, depending on your location, risk profile, and coverage levels. Homeowners insurance costs more for policies with high coverage limits, low deductibles, and full or guaranteed replacement cost coverage.
| National Average Cost | $2,600 |
| Minimum Cost | $540 |
| Maximum Cost | $6,640 |
| Average Range | $1,800 to $3,200 |
Home insurance rates have been increasing steadily for the past decade, with a countrywide average increase of nearly 20% just in the last two years.
Some states are seeing an additional 30% to 60%+ increase in insurance prices this year, and many insurers are pulling out of high-risk states like Florida and California completely, further impacting rates in those states.
Home insurance costs by state
Homeowners insurance costs vary widely from state to state. Factors like risk of natural disasters, crime rates, cost of living, and state insurance regulations cause premiums to differ significantly across the U.S. The table below shows the average annual insurance rates for each state.
| State | Average annual rate | Average monthly rate* |
|---|---|---|
| Alabama | $2,020 – $3,485 | $173 – $300 |
| Alaska | $1,015 – $2,130 | $90 – $188 |
| Arizona | $1,470 – $2,220 | $128 – $195 |
| Arkansas | $1,530 – $4,200 | $133 – $360 |
| California | $1,195 – $1,835 | $105 – $163 |
| Colorado | $2,460 – $3,670 | $210 – $316 |
| Connecticut | $1,330 – $2,375 | $116 – $208 |
| Delaware | $760 – $1,555 | $68 – $140 |
| District of Columbia | $995 – $1,520 | $88 – $137 |
| Florida | $1,965 – $4,200 | $169 – $360 |
| Georgia | $1,315 – $3,020 | $115 – $262 |
| Hawaii | $405 – $985 | $39 – $92 |
| Idaho | $1,010 – $2,450 | $89 – $214 |
| Illinois | $1,635 – $2,750 | $141 – $239 |
| Indiana | $1,500 – $3,095 | $130 – $268 |
| Iowa | $1,165 – $3,015 | $102 – $261 |
| Kansas | $2,265 – $4,935 | $194 – $421 |
| Kentucky | $1,570 – $3,700 | $136 – $318 |
| Louisiana | $2,055 – $4,475 | $176 – $383 |
| Maine | $895 – $1,755 | $80 – $156 |
| Maryland | $1,300 – $1,890 | $113 – $168 |
| Massachusetts | $1,260 – $2,270 | $110 – $199 |
| Michigan | $1,220 – $2,605 | $107 – $227 |
| Minnesota | $1,685 – $2,930 | $145 – $254 |
| Mississippi | $1,255 – $3,925 | $110 – $337 |
| Missouri | $1,490 – $3,835 | $129 – $330 |
| Montana | $1,820 – $2,715 | $157 – $236 |
| Nebraska | $2,550 – $4,890 | $218 – $418 |
| Nevada | $935 – $1,790 | $83 – $159 |
| New Hampshire | $800 – $1,550 | $72 – $139 |
| New Jersey | $915 – $1,555 | $81 – $140 |
| New Mexico | $1,335 – $2,925 | $116 – $254 |
| New York | $1,340 – $2,570 | $117 – $224 |
| North Carolina | $1,425 – $3,235 | $124 – $280 |
| North Dakota | $1,475 – $3,135 | $128 – $271 |
| Ohio | $1,140 – $2,265 | $100 – $199 |
| Oklahoma | $2,275 – $5,835 | $195 – $496 |
| Oregon | $950 – $2,195 | $84 – $193 |
| Pennsylvania | $735 – $2,195 | $66 – $193 |
| Rhode Island | $1,250 – $1,875 | $109 – $166 |
| South Carolina | $1,205 – $3,040 | $105 – $263 |
| South Dakota | $1,740 – $3,840 | $150 – $330 |
| Tennessee | $1,970 – $3,105 | $169 – $269 |
| Texas | $2,130 – $4,850 | $183 – $414 |
| Utah | $865 – $1,755 | $77 – $156 |
| Vermont | $680 – $1,540 | $62 – $138 |
| Virginia | $1,150 – $2,245 | $101 – $197 |
| Washington | $1,155 – $1,655 | $101 – $148 |
| West Virginia | $915 – $2,535 | $81 – $221 |
| Wisconsin | $845 – $2,025 | $75 – $179 |
| Wyoming | $1,040 – $2,435 | $92 – $213 |
*Paying monthly instead of annually typically costs $5 to $10 more per month.
Homeowners insurance rates can vary significantly from city to city within each state. Urban areas typically have higher average premiums than rural zones due to factors like more expensive real estate, increased theft risk, and proximity to coastal flooding.
States with the cheapest home insurance
Hawaii is the cheapest state for home insurance, with some annual premiums below $500. However, those cheap rates are mainly because Hawaii's standard home policies exclude hurricane damage. Other states with home insurance rates well below the national average include:
Vermont
Pennsylvania
Delaware
New Hampshire
Wisconsin
Utah
Maine
New Jersey
West Virginia
Location-based factors that typically reduce insurance premiums include lower crime rates, lower number of major liability claims, and fewer extreme weather events or natural disasters.
States with the most expensive home insurance
Homes in states with severe weather risk are usually the most expensive to insure. Ten states with the highest average home insurance rates include:
Oklahoma
Kansas
Nebraska
Texas
Louisiana
Arkansas
Florida
Mississippi
South Dakota
Missouri
Homeowners insurance cost by company
In addition to where you live, the company you select can significantly impact your homeowners insurance premiums. Each insurer uses its own formulas to calculate risk and determine rates. The following table shows estimated annual premiums from some top home insurance providers:
| Company | Average annual insurance rate* |
|---|---|
| Allstate | $1,600 – $2,200 |
| American Family | $1,500 – $2,500 |
| Auto-owners | $1,400 – $2,000 |
| Chubb | $1,875 – $2,700 |
| Erie | $1,500 – $2,200 |
| Farmers | $2,000 – $2,800 |
| Nationwide | $1,500 – $3,000 |
| Progressive | $3,200 – $4,200 |
| State Farm | $1,450 – $2,200 |
| Travelers | $1,575 – $2,100 |
| USAA | $1,075 – $2,200 |
*Based on a $250,000 to $350,000 dwelling limit.
What does home insurance cover?
Home insurance provides critical financial protection for homeowners in the event of damage or loss to their home or property. Most standard policies include the following core coverages:
| Coverage type | Typical coverage limit | What it covers* |
|---|---|---|
| A - Dwelling | $100,000 – $500,000 | Repairs to the home's physical structure and attached structures (porch, deck, HVAC system, etc.) |
| B - Other structures | 10% – 20% of dwelling limit | Repairs to detached structures on the property, such as sheds, garages, and fences |
| C - Personal property | 50% – 75% of dwelling limit | Home contents (furniture, electronics, jewelry, clothing, etc.) |
| D - Loss of use | 10% – 30% of dwelling limit | Additional living expenses if the home is uninhabitable due to covered damage |
| E - Personal Liability | $100,000 minimum | Legal expenses for injury or property damage claims by others for damage that occurs at your home |
| F - Medical payments | $1,000 – $5,000 | Medical bills for guests hurt on your property, regardless of liability |
*If damage is due to a covered disaster.
What isn't covered by homeowners insurance?
Coverage options and exclusions vary by insurance company and state, but most standard home insurance policies do not cover:
Flood or other water damage
Sinkhole damage
Earthquake or earth movement damage
Identity theft
Intentional property damage or neglect
Pest damage or infestations
Home maintenance for normal wear and tear
Adding optional coverage increases premiums but if you're in a high-risk area for certain hazards, the extra coverage could save you thousands later.
Home insurance cost estimator
Many elements influence the cost of homeowners insurance coverage. Some key factors that determine your risk profile and premium costs include:
Location: Where you live significantly impacts your risk of hazards like hurricanes, floods, wildfires, and crime. Homes in coastal regions, forested areas, and urban cities typically cost more to insure. Living close to fire-hydrants and emergency services may help reduce your rate.
Home age: Older homes typically cost more to insure since they are often costlier to repair.
Home type: Whether you're insuring a single-family home, townhome, or a condo in a multi-unit building impacts your rates. Condo insurance costs $400 to $700 per year on average.
Home size & value: The cost to rebuild your home determines your coverage limits and premiums. Rates are higher for large, expensive homes versus modest ones. Luxury features like a pool or hot tub, or a long list of expensive valuables also increase your premiums.
Credit score: Most states allow insurers to factor credit into your risk profile and pricing. Poor credit often means paying a much higher premium.
Claims history: Filing multiple claims will cause most insurers to raise your rates. Some insurers look back 5 to 7 years, and even just one claim can increase your rate.
Security features: Extras like security systems and fire sprinklers can lower your risk and reduce your rates.
Policy type
There are several types of home insurance policies, usually labeled HO-1 through HO-8 to designate the amount and type of coverage included.
HO-2 and HO-3 are the most common for homeowners. HO-1 polices cover only the basic dwelling for a short list of perils. HO-2 and HO-3 policies cover a longer list of perils and include personal property coverage, liability protection, and loss of use coverage.
The most common perils listed in a HO-1 policy are fire, lightning, internal and external explosion, windstorms, hail, smoke, vehicles, riots, and vandalism, and volcanic explosions.
HO-5 policies are more comprehensive and often required for specific homes that are expensive or historically significant.
Not all states allow HO-1 policies due to its lack of coverage.
Coverage limits
Higher coverage limits mean higher insurance premiums. However, the coverage you choose should be high enough to rebuild or replace your home or belongings after a covered loss. Many insurance companies require a dwelling limit of at least 80% of your home's replacement value.
| Dwelling coverage limit | Average annual cost* |
|---|---|
| $150,000 | $900 – $1,200 |
| $250,000 | $1,700 – $2,200 |
| $350,000 | $2,300 – $2,900 |
| $450,000 | $2,700 – $3,500 |
| $750,000 | $4,400 – $5,400 |
*Liability insurance adds $15 to $65 per year, depending on the coverage limit.
Consider increasing your coverage limit if your location, home features, or lifestyle puts you at a higher risk for damage, loss, or liability claims. Examples of increased risk include owning a dog, swimming pool, or trampoline, or entertaining guests frequently.
Reimbursement method
Insurance rates vary based on the policy's reimbursement method. Guaranteed replacement cost adds 5% to 10% to your premiums and offers the best coverage after a covered loss, but not all insurance companies offer it.
Actual cash value (ACV) pays the depreciated value, which is typically less than the current cost to replace or rebuild.
Replacement cost value (RCV) pays the cost to rebuild at current prices, but the total amount is still subject to the policy's limits.
Extended replacement cost (ERC) pays a certain percentage guaranteed beyond the policy limit—usually 10% to 50% of the dwelling limit.
Guaranteed replacement cost (GRC) pays 100% of the cost to replace or rebuild.
Deductible
Insurance companies typically offer policies with $500, $1,000, $2,500, and $5,000 deductibles. Higher-deductible policies have lower premiums, and vice versa. Some states have added deductibles for major disasters like hurricanes or earthquakes. Choose a higher deductible if you're comfortable paying more out of pocket for repairs after a covered event.
Optional coverage
Adding extra coverage increases premiums but provides peace of mind, especially if your property is in a high-risk area with frequent damaging events not covered by a standard home insurance policy. While options depend on the state and the insurance provider, common add-ons include:
Earthquake, flood, or tornado insurance
Water or sewage backup coverage
Equipment breakdown coverage
Guaranteed or extended replacement cost coverage
Scheduled personal property coverage cover for especially valuable items
Equipment breakdown coverage
A home warranty costs $420 to $720 per year for standard coverage and may help cover some of the appliance repair costs excluded from your home insurance policy. Always read the fine print before purchasing, as most home warranties have their own list of limitations and exclusions.
How to save on the cost of home insurance
While some factors are out of your control, there are ways to find savings and offset higher rates:
Increase deductibles: Raising your deductible from $500 to $1,000 can save up to 25%. Increasing it even more can result in an even larger discount.
Limit valuables: Lowering personal property coverage limits will typically lower premium costs.
Pay in full: Most insurance carriers offer a $5 to $10 per month discount if you pay up front with a single payment instead of monthly.
Add protection: Installing smoke detectors, security systems, and fire-resistant building materials can qualify for discounts.
Maintain good credit: Most insurers use credit scores as a factor in pricing. Keeping your score high reduces premiums.
Bundle policies: Combining home and auto coverage with one company often leads to a
5% to 15% discount.
Compare annually: Rates and discounts fluctuate constantly. Shop around each year at renewal and make sure you note any home improvements that could lower your rate.
Look for discounts: Ask about discounts for retirees, professional organization membership, claim-free status, customer loyalty, and others.
Home insurance FAQs
Does homeowners insurance cover mold?
Homeowners insurance sometimes covers mold, if the mold damage was due to a covered event listed in the policy, such as a burst pipe or appliance malfunction that causes water damage. Most homeowners policies do not cover mold resulting from a gradual leak or seepage.
Is home insurance tax deductible?
Home insurance is typically not tax deductible unless it's rental property, where the premiums are considered a business expense. If you have a home-based business with dedicated office space, you may be able to deduct a percentage of your insurance premiums. Contact a tax professional to discuss your options.
How much home insurance do I need?
A good rule of thumb is to insure your home for 100% of the cost to completely rebuild or replace everything in the event of a total covered loss. A qualified insurance agent can help you estimate this reconstruction cost by factoring in materials, labor, demolition, permits, and more.
Who has the cheapest home insurance?
USAA generally offers the lowest rates but only for military members. Erie, Progressive, State Farm, and Travelers typically have competitive pricing, but rates vary by state and fluctuate constantly so these companies aren't always the cheapest. Get quotes from several companies to find the cheapest for your situation.
Why did my home insurance go up?
Common reasons for homeowners insurance rate hikes include filing a recent claim or negative changes to your credit score, inflation, higher reconstruction costs in your area, and general increases your insurer levies on all policyholders to maintain profitability.
Getting estimates from home insurance companies
Follow these tips to find a home insurance company and plan that best fits your specific situation:
Compare quotes with similar coverage limits and deductibles from at least 3 reputable insurance companies. Be sure to compare exclusions as well.
Check out insurance company reviews on HomeGuide and Google. Be on the lookout for trends of denied claims.
Ask about bundling with auto or life insurance.
See if you qualify for any discounts.
Ask about higher hurricane, wind, and liability deductibles if risks are lower where you live.
Read all the policy terms before signing anything.
Questions to ask a homeowners insurance agent
Here are some important questions to ask when purchasing home insurance:
What is the policy's reimbursement method—replacement cost or actual cash value?
What are the coverage limit and deductible options?
How much liability coverage does the policy include?
Does the policy have any additional deductibles?
What events are covered, and which ones are not covered?
Do you offer optional add-on coverage for exclusions, and how much are they?
What additional coverage do you recommend for my property?
What policy discounts do you offer?
What home renovations qualify for a discount?
Using our proprietary cost database, in-depth research, and collaboration with industry experts, we deliver accurate, up-to-date pricing and insights you can trust, every time.