How Much Does Homeowners Insurance Cost?
Homeowners insurance is a crucial aspect of protecting your property, but understanding its cost can be complex. According to NerdWallet’s analysis, the average homeowners insurance cost is $2,110 per year, or approximately $176 per month. This figure is based on an analysis of pricing data from over 100 insurance companies across all 50 states and Washington, D.C.
It’s important for readers to know that home insurance rates can vary greatly. The exact cost depends on your location, the size of your home, and your coverage needs. The rates presented in this article serve as benchmarks, providing a general sense of what you might expect to pay.
Key Findings from Our Analysis
- National Average: Home insurance costs an average of $2,110 annually.
- Most Expensive States: Oklahoma, Texas, and Nebraska have the highest home insurance costs.
- Least Expensive States: Hawaii, Vermont, and Delaware offer the most affordable home insurance premiums.
- Most Affordable Widely Available Insurer: Travelers offers the most affordable policies, with an average annual rate of $2,055. Please note that the military insurer USAA had even less expensive policies at $1,790 per year, on average.
- Most Expensive Widely Available Insurer: American Family provides the most expensive home insurance, with an average annual rate of $2,745.
To get an estimate of your own costs, you can get home insurance quotes in minutes by answering a few questions to see custom quotes and find the right policy for you. The factors impacting your rate include:
- Where you live
- Your home’s structure size.
- The amount of coverage you select.
- The age of your home.
- The type of deductible.
- Your claims history.
- Your credit which is used in most states
Home Insurance Costs by State
The price of homeowners insurance varies significantly depending on your state. Here’s a breakdown of the average annual and monthly costs across the U.S.:
Here is a table of the average annual and monthly home insurance costs for all 50 states and Washington, D.C.
Home Insurance Costs by City
Home insurance rates also vary significantly in different metropolitan areas, here is a breakdown of costs in the 20 largest U.S. cities.:
Home Insurance Costs by Company
The price of homeowners insurance can also depend on the insurance provider. NerdWallet has compiled average annual rates for some of the biggest insurance companies in the USA by market share. Remember that, depending on your state, some insurers may not provide coverage.
*USAA homeowners insurance is available only to active-duty military, veterans and their families.
Understanding Coverage and Costs
The amount of dwelling coverage you select also significantly impacts your home insurance costs. Dwelling coverage pays to rebuild your home if it’s damaged or destroyed. Here’s how coverage amounts affect the average annual insurance cost:
Older homes also cost more to insure than newer homes, on average. The tables below show the average annual costs. The coverage limits were the same for all homes.
Impact of Deductibles
Your deductible, the amount you pay before your insurance kicks in, also affects your rate:
Factors Influencing Home Insurance Costs
Other factors that can influence the cost of your homeowners insurance include the presence of claims history, so insurers may see you as a higher risk if you have more:
Also, your credit score might affect the price of homeowners insurance. If you have poor credit, you might pay more for home insurance, in most states:
Your home insurance premiums will also be affected by extra factors. These could include the following:
- Your location. Living closer to a fire station can lower your premiums, and living in a neighborhood with higher crime rates may increase them.
- Your risk of natural disasters. Living in a location that’s known for natural disasters, such as wildfires, tornadoes, or hurricanes, can increase prices.
- Extra features. Swimming pools and trampolines increase liability, and might increase the cost of your policy.
- Your dog. Some insurers may charge extra for some animal types.
Why Home Insurance Costs are Rising
Home insurance rates have increased in recent years. This rise is due to inflation and natural disasters.
- Inflation: Inflation has increased the costs of repairs and rebuilding. Homeowners premiums might go up at renewal, even without recent claims.
- Natural Disasters: The rise of tornadoes, hurricanes, and wildfires grows more common, especially in certain parts of the country. In 2024, disasters caused billions in damages, according to the National Oceanic and Atmospheric Administration.
How to Reduce Home Insurance Costs
Here are a few ways to potentially reduce your home insurance costs:
- Shop Around: The best way to get the best deals is to shop around for quotes annually. Compare your quotes from at least three different companies to ensure a great deal. Make sure that your coverage limits and deductibles are similar on all three policies to ensure a proper and fair comparison.
- Contact an agent: If you’re not up for doing this yourself, you can contact an independent agent or broker. They can get quotes on your behalf.
- Raise your deductible: Higher deductibles typically mean lower insurance premiums. If you raise your deductible from $1,000 to $2,500, you can save about 12% a year, on average.
- Ask about Discounts: Many insurers offer discounts to help customers get lower home insurance rates. Seek out opportunities to save money on your premium. Your insurer could offer:
- Multiple policies
- Safety and security devices
- Claims-free
- Upgrade your home
- Build your credit: Those with a good credit score may pay less for homeowners insurance. Building your credit could save you money on homeowners insurance.
In conclusion, your home insurance costs depend on a few elements. Your location, coverage needs, and home’s age all play a role in determining your premium. The average annual cost is $2,110, but by knowing the different factors, you can make informed decisions to potentially reduce your insurance costs.
