Home Insurance Rates by State: Are You Paying Too Much?
Homeowners across the country are feeling the pinch of rising insurance rates, particularly for home insurance. If you’re wondering why your coverage has become so expensive, you’re not alone. The reasons are complex, but your state of residence plays a significant role. This article explores the factors driving these costs and provides a breakdown of home insurance premiums by state for 2025.
Before diving in, it’s worth noting that even with rising rates, there are steps you can take to manage insurance costs. The good news is, you can take action. Let’s explore where home insurance is the most expensive and where it’s more affordable.
State-by-State Breakdown of Home Insurance Costs
Several factors have contributed to the increase in home insurance rates. These include supply chain issues, third-party lawsuits against insurers, and an increase in extreme weather events. These issues converged in 2024, impacting some states more severely than others, while others remained below the national average.
Top 5 States With the Highest Average Home Insurance Premiums in 2025
The unfortunate ‘award’ for the highest home insurance premiums in 2025 goes to Nebraska. But don’t let this be a reason to immediately pack up and move. Remember, there are ways to find savings (which will be detailed below).
In some of the most expensive states, such as those prone to natural disasters like tornadoes and hurricanes, prices are consistently driven upward. Nebraska, for instance, experienced its highest number of tornadoes in 20 years in 2024, which resulted in $15 million in property damage.
Florida and Louisiana also endured a disproportionate number of hurricanes last year, a region already known for its stormy weather. These extreme events led to an increased number of homeowners insurance claims, which impacts the premiums for you and your neighbors.
Here are the top five states with the highest average home insurance annual premiums:
- Nebraska: $5,640
- Florida: $5,488
- Oklahoma: $4,643
- Kansas: $4,287
- Louisiana: $4,135
Data from Quadrant Information Services. Rates are accurate as of February 2025.
Top 5 States With the Lowest Average Home Insurance Premiums in 2025
So who enjoys the bragging rights for the most affordable rates? That honor goes to Vermont! As one of the states with the smallest populations (and fewer homes to insure), the affordability of home insurance isn’t too surprising.
Unlike other states, Vermont sees less property damage from tornadoes and hurricanes. The rest of the states boasting lower premiums:
- Vermont: $830
- Alaska: $933
- Delaware: $964
- West Virginia: $1,009
- Oregon: $1,011
Data from Quadrant Information Services. Rates are accurate as of February 2025.
Compare Homeowners Insurance Rates by State
The national average annual premium for homeowners insurance is $2,258, or about $188 per month, for $300,000 of dwelling coverage. However, this varies significantly from state to state. While some areas are more expensive, others are far more affordable.
While your state isn’t the only factor that influences home insurance rates, it is a significant one. The chart below provides a more comprehensive look at the average homeowners insurance premiums by state for $300,000 in dwelling coverage:
Average Homeowners Insurance Premiums by State in 2025
Data from Quadrant Information Services. Rates are accurate as of February 2025.
Factors in Your Home Insurance Cost
So, how do home insurance companies determine your premium? As shown above, some states are doing better than others in terms of rates. However, even if your state has higher premiums, there are actions you can take. Remember, there’s no need to relocate (unless that’s what you decide to do!). Here are some of the key factors insurers use to set your rates.
- Replacement Cost: This refers to the estimated amount required to rebuild your home if it’s damaged. Outside of downsizing or buying cheaper furniture, there isn’t much you can do. However, downsizing could save on the insurance costs and many other expenses.
- Location: This is a major factor, as the previous data shows. While a higher insurance premium might never be the only reason to move, the lower premiums of a state like Vermont might not be as bad as living in Nebraska.
- Age and Condition of Your Home: Older homes or those with existing problems often come with higher premiums. Though you can’t control the age of your home, improving its condition is an option. Routine maintenance will help avoid future claims. Also, insurers may give a discount if you have safety features like smoke detectors, burglar alarms, or deadbolt locks.
- Level of Coverage and Deductible: Part of your premium will be determined by the amount of your coverage and the size of your deductible (the amount you pay out-of-pocket when there’s an insurance claim). Raising your deductible can reduce premiums if you have enough money in an emergency fund.
- Construction Type: You can’t fundamentally change your home’s construction type. If you’re thinking of relocating, keep this in mind. Wood homes often have higher premiums, whereas brick and concrete structures can be more affordable to insure.
- Your History of Claims: Past claims influence your premium. A lot of claims in your neighborhood can impact everyone’s premiums! So, you might want to consider paying for minor repairs yourself. This would keep your premium from going up.
- Size of the House: It’s worth knowing how the size of your home affects the cost of your insurance. Downsizing is an option if it’s financially beneficial for you.
- Number of Occupants: More people under your roof can increase the chance of accidents and claims. There is the ’empty nest’ solution, but it may depend on your children.
More Ways to Save on Homeowners Insurance
If you still believe you could be doing more to reduce your home insurance premium, here are two more tips.
Firstly, shop around and work with an independent insurance agent. RamseyTrusted professionals know the industry, and are aware of trends in rates. They can offer suggestions for savings.
Secondly, see if bundling options are available through your insurance provider. In many cases, combining policies such as homeowners insurance and auto insurance is another way to save on premiums. Ask about this when speaking to your agent.
Next Steps
- Figure out how much home insurance you need.
- Find out if you need extra insurance, such as flood, hurricane, or earthquake insurance.
- Shop around and see if you can save money by changing carriers or deductibles.
- Connect with a trusted insurance agent and let them help you.
