According to the National Association of Insurance Commissioners, the average cost of homeowners insurance in the United States is $1,249 per year, or $104 per month (NAIC).
However, premiums for homeowners insurance vary greatly depending on where you live, how old your property is, how much it would cost to restore it, and your claims history. For example, if you reside in a location prone to extreme weather or wildfires, your rates will almost always be higher because your chances of submitting a claim are higher.
- The average cost of homeowner’s insurance varies by state.
- The average annual home insurance premium for a home with $250,000 in dwelling coverage.
The Most Expensive States for Homeowners Insurance
Oklahoma, Kansas, Nebraska, Arkansas, and Kentucky have the most expensive average yearly home insurance premiums. In these high-priced neighborhoods, how much does homeowner’s insurance cost? The average cost of home insurance in each of these states is more than $2,000 per year. The table below shows the average cost of homeowners insurance in certain states.
Natural catastrophes play a key impact in deciding the cost of your house insurance. The more probable harm occurs, the more likely insurance firms will be required to pay claims. This means that firms must charge higher premiums in order to have enough reserves to manage a huge flood of claims. Knowing the hazards connected with your state and ZIP code will assist you in making informed selections about house insurance.
The Least Expensive States for Homeowners Insurance
Hawaii, Vermont, Utah, Delaware, and New Hampshire have the least expensive average annual homeowners insurance premiums. So, how much should you plan to spend on homeowners insurance in these areas? The average premium in these states is less than $1,000 per year, owing to the low risk of property damage. The table below depicts the average cost of home insurance in different states, as well as how they compare to the national average.
Average Homeowners Insurance Cost by the Company
You might be wondering if the house insurance company you choose has an impact on the cost of your policy. Because each organization has its own ranking system, the quick answer is yes. Even for the same amount of coverage, rates might vary by hundreds of dollars or more between carriers. Erie Insurance is the least expensive insurance carrier for $250,000 in dwelling coverage, according to the homes insurance providers we looked at, followed by USAA and Progressive.
Amica is the most expensive homes insurance company, according to our list of insurers, followed by Farmers and Chubb. We evaluated these providers based on market share, customer satisfaction, and coverage alternatives, in addition to rate considerations. Some businesses may not be available in all states.
Each homeowners insurance company sets its own rates, which means that even within the same state and ZIP code, the average cost of home insurance will vary (in states where ZIP-code rating is allowed).
Getting numerous home insurance quotes from different companies will help you discover the coverage you need at a reduced cost. Comparing different carriers may assist you in determining which carrier can provide you with the coverage and price that is most appropriate for your needs.
Average Home Insurance Cost by Coverage Amount
While the rates listed above are for home insurance policies with $250,000 in dwelling coverage, not all homes will be covered at that level. Depending on the size of their property, the features in their home, and the cost of living in the area, some homeowners may require more or less coverage. For example, homeowners insurance for a home that only requires $150,000 in dwelling coverage costs substantially less per year than insurance for a home that requires $250,000 in dwelling coverage.
The less dwelling coverage you have, the less expensive your policy will be. However, you don’t need to figure out how much it would cost to rebuild your home before shopping for insurance. Although having an estimate of the rebuilding cost of your home can assist you to avoid over-or under-insuring your property, home insurance companies have their own assessment systems to calculate this. The average annual house insurance premium for five different levels of dwelling coverage is shown in the table below. This information is based on average rates for the year 2021.
Components of Homeowners Insurance Policies
Every homeowner’s insurance coverage includes specific safeguards against significant financial loss caused by fire, storms, theft, vandalism, and legal liability. The following are the most frequent types of home insurance coverage:
Dwelling coverage comparable to the cost of reconstructing your home: This compensates for covered damages to your home’s principal structure and associated structures such as carports or garages, up to your dwelling coverage maximum. The value of this coverage is usually determined at replacement cost.
Coverage for other structures, usually 10-20% of your dwelling coverage limit: This coverage protects structures that are not attached to your house, such as a detached garage, driveway, fences, or shed, from property damage.
Personal property coverage, which typically ranges from 50 to 75 percent of your housing limit: This safeguards your home’s goods, such as clothing, furniture, and gadgets. Additional limits may apply to your personal property coverage.
For example, you may only receive 10% personal property coverage for items stored at other places, and coverage for particular items, such as fine art and money, maybe limited. You might be able to select between replacement cost and actual cash value coverage. Actual cash value insurance is often more expensive than replacement cost policies.
Personal liability coverage, often between $100,000 and $500,000, compensates for medical expenses or property damage to others if you are legally liable for injuries on your property, events that occur off your property, or property damage to others. It also covers legal bills if the injured party files a lawsuit against you.
Medical costs coverage, which often ranges from $1,000 to $5,000: This covers medical bills for anyone who is hurt on your property who is not a member of your family, regardless of fault.
Loss of use coverage, which often amounts to 10-20% of your home coverage: This covers additional living expenses if you have to temporarily relocate while your house is being repaired as a result of a covered claim.
Each homeowner’s insurance coverage has its own set of features. If you’re not sure what your policy covers, check with your agent or insurance company.