The cost of insuring a home has continued to rise steadily throughout the country. According to the National Association of Insurance Commissioners, home insurance rates are up almost 47% in the last 10 years alone. To help you understand the market, we did some digging to discover which states are the most and least expensive.
Read through our findings below, or enter your ZIP code in the tool above to compare homeowners insurance quotes in your area.
The most expensive states for homeowners insurance
Because the cost of homeowners insurance varies greatly by state, it makes sense to explore rates on a state-by-state basis. To do this, we collected thousands of homeowners insurance quotes in every state and calculated the average premium for each one. The following table shows our findings, from the most expensive to the most affordable states for home insurance.
|Cost rank||State||Average insurance cost|
According to our findings, homeowners premiums vary widely in each state. Depending on where you live, the average cost of home insurance can fall anywhere between $400 and $3,000 per year. These costs are impacted by the unique home insurance risks for each state, the amount of coverage a typical homeowner buys in each state and several other factors.
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Which states pay the most for home insurance coverage...
States that face the highest home insurance costs are the ones where natural disasters occur most frequently. Oklahoma and Kansas led the pack, with tornadoes pushing average premiums in those states much higher than the national mean.
Texas, South Dakota and South Carolina rounded out the top five costliest states for home insurance. Our data showed homeowners in these five states spent 68% more per year on insurance premiums than the typical U.S. resident.
...and which states pay the least?
The cheapest states for home insurance are Delaware, Vermont, Pennsylvania and New Hampshire. These states tend to be less susceptible to major disasters such as hurricanes, have lower home values, or both.
Our estimates showed that the average cost of covering a typical home in these states would be less than $667 a year. On average, homeowners in these states pay 54% less than the typical price nationwide.
What's the biggest cause of homeowners insurance losses?
The Insurance Services Office (ISO) found that 97% of homeowners insurance losses are due to property damage. The balance of nonproperty damage losses comes from liability cases such as personal injury. Delving deeper into the numbers, we can look at what usually causes the property damage.
The ISO lists the following perils as the most frequent causes of homeowners insurance losses, with wind and hail damage leading the way at 33.1% of all homeowners insurance losses.
Property and liability claims as a percentage of total homeowners insurance losses
- Wind and hail (33.1% of total losses)
- Water damage and freezing (29.5%)
- Fire and lightning (26.8%)
- Other property damage, including vandalism and malicious mischief (5.7%)
- Liability for bodily injury and property damage to others (2.7%)
- Theft (1.9%)
- Medical payments (0.2%)
- Credit card and other (less than 0.1%)
When we look at what possessions are most frequently mentioned in homeowner claims, jewelry tops the list. Electronics and apparel are also common subjects of claims that involve damage or theft.
What does homeowners insurance cover?
When you're purchasing homeowners insurance, it's important to know what you're paying for. Though no two policies are alike, most consist of four standard coverages.
Dwelling coverage provides financial compensation if the structure of your home is damaged by a covered event. This can include:
- Built-in appliances
Dwelling coverage usually extends to other structures such as garages and sheds, so you'll be protected if a major catastrophe affects your whole property. We recommend shoppers purchase policies with limits high enough to cover the full cost of rebuilding the structure if it were completely destroyed — a coverage known as replacement cost value.
Personal property coverage protects the contents of your home from any damage caused by a covered peril. A standard HO-3 will likely include coverage for:
However, policies typically come with sub limits on the coverage in individual high-value categories, such as jewelry and firearms. If you have a lot of money invested in collectibles, you may need to review your homeowners policy to determine whether you need additional insurance.
Liability coverage deals with your legal liability for property damage or bodily injury to others. For example, if your dog bites a guest and you are sued for medical expenses, your homeowners insurance will cover the cost of your legal exposure up to policy limits. It also covers unintentional damage or destruction of other people's property, such as breaking your neighbor's window while playing ball.
Loss of use coverage covers the expenses of living away from your home when it's made uninhabitable by a covered peril. However, not all expenses will be covered. You'll only be reimbursed for those expenses above and beyond your normal expenses. For instance, the cost of staying in a hotel while your house undergoes repairs—an unusual expense—will be covered.
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What factors impact your home insurance rates?
Besides the location of your home, the amount of dwelling coverage you purchase is the biggest factor in determining home insurance rates. While this number is closely related to the value of your home, you still have to make some choices about exactly how much coverage to buy.
In most cases, we recommend purchasing enough dwelling coverage to cover the replacement cost of your home, which is the cost of rebuilding it from the ground up. While replacement cost coverage is more expensive than actual cash value coverage, it guarantees that your insurance payout won't be lowered by the depreciation of your home as it ages.
Besides considering the amount of coverage you need, insurers look at many smaller variables in pricing a policy. These are either adjustable factors you can control, like whether your roof is weatherproof; or fixed factors that are unchangeable, like the year your home was built.
Adjustable factors that affect home insurance rates
- Your coverage limits for personal property and liability aren't as impactful as your dwelling coverage limit. However, increasing these coverages will cost you more in premiums. Standard liability coverage generally starts at $100,000.
- Your deductible is the amount of money you must pay out of pocket before your policy begins paying out your claim. Choosing a higher deductible means lowering your potential benefit, which makes your policy less valuable and therefore cheaper.
- Home insurance discounts offer a variety of ways to save on home insurance rates, including discounts for bundling your auto and home insurance purchase together and for home safety features such as a central alarm system.
What is covered by homeowners insurance?
It depends what kind of policy you buy, but in general homeowners insurance covers damage to the structure of your home, damage to your personal property, and provides liability coverage — which pays for damages to others if you're deemed responsible.
What sources of damage are covered by homeowners insurance?
Most homeowners insurance policies have a list of perils (sources of damage) that are covered. The most common perils include fire, wind, theft, vandalism, freezing, and damage from vehicles. Some insurance policies are "open perils," which means you're covered for everything that's not explicitly excluded.
What are the main factors that affect how much home insurance costs?
The three main factors that affect home insurance cost are your home's location, how much it's insured for, and how susceptible it is to damage. For example, a home located along the coast would have higher insurance costs than one that's inland, and a home made with expensive or fragile materials costs more to insure than one made with more affordable or sturdy construction.
Fixed factors that affect home insurance rates
- The age of your home plays a part in the costs of insuring it. Older homes are more likely to have structural wear and tear that increases risk and thus your premiums.
- Your claims history and the claims history of previous residents will be a focus for insurers. The first indicates how likely you are to file a claim, while the second can reveal chronic issues with the property itself. More claims in either of these areas means higher rates.
- The materials used to build your home determine its risk for fire, termites, rotting and other dangers. Wooden-frame housing is more vulnerable to these than brick construction — and thus more expensive to insure.
How can I reduce the cost of my homeowners insurance?
The best, easiest way to reduce your homeowners insurance cost is to get quotes from multiple insurers to see if anyone will provide a better price than your current company. It's especially easy to do this when your policy is up for renewal, or if you've made major changes to your policy.
Another option to reduce your premium is to raise your deductible — the amount you pay before insurance kicks in. A higher deductible directly results in a lower premium, though you should only raise your deductible to an amount you can cover if you experience a loss. If you couldn't afford an unexpected $5,000 expense, you should keep your deductible below that amount.
We collected home insurance quotes for every residential ZIP code in the United States, from the largest homeowners insurance companies in every state, then found the average of each state. We then averaged these state averages to find the typical home insurance price in the U.S.
For each state average, we collected quotes corresponding to the median home age and value for each state. For example, our California sample home was built in 1975 and insured to a value of $509,400. Meanwhile, our sample West Virginia home was built in 1972 and insured for $119,800. We used median home values to approximate the rebuild cost in each state.
ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.