The Average Cost of Home Insurance and How Much You Can Expect to Pay

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When you are shopping for homeowners insurance or reviewing your current home insurance policy to get the best price, there are a number of factors that can help you save money. The average costs of home insurance vary for different policies, as well as by location and type of home. Learn what the cost of home insurance is, how the price is impacted, and ways to save.

How Much Is Home Insurance?

The national average cost of homeowners insurance was $1,211 in 2017, according to the latest data from the Insurance Information Institute. The average cost of renters insurance was $180. Insurance.com found that the average cost of condo insurance across the U.S. is $625 for an Ho6 policy.

While all of this gives you a good idea of what the national average costs are for home insurance, there is more information you need to look at before deciding what the average cost of home insurance will be for you.

What Impacts the Cost of Home Insurance?

If all things are equal in the level of coverage and policy limits like the insured dwelling value, there are still several factors that affect how much you pay on your home insurance. These are the additional factors that determine the premium of homeowners insurance aside from coverage limits on the declaration page of your insurance policy:

  1. Location: What the claims experience and risks or perils are in your neighborhood.
  2. Personal insurance score or credit scoring: This can make a huge difference in price.
  3. Discounts you personally qualify for: You could bundle home and auto, and more.
  4. Coverage options you choose: For example, All risk vs. Named perils, or if you have actual cash value or replacement cost coverage.
  5. Deductible: How much of the insurance risk you take on yourself vs. the insurance company—you can use your insurance deductible to save money on your insurance in many cases, which would lower your cost compared to the national average.

You cannot compare average premiums if the coverage options are not the same. This is because some policies are cheaper than others as they have much less coverage. Policies will always be personalized to the home and homeowner.

Average Cost of Home Insurance By State

Understanding what the average cost of home insurance is in your area is important because the rates vary based on a number of factors. Here are the average costs of home insurance by state compared to the average cost of renters insurance, based on the latest data from the Insurance Information Institute. The map below shows a breakdown of home insurance and renters insurance by state. Hover over each state to see its figures.

Top 5 Most Expensive States for Home Insurance

  1. Louisiana
  2. Florida
  3. Texas
  4. Oklahoma
  5. Kansas

Top 5 Least Expensive States for Home Insurance

  1. Oregon
  2. Utah
  3. Idaho
  4. Nevada
  5. Wisconsin
Average Cost of Home Insurance By State and Average Renters Insurance Premium Comparison
State Home Insurance Average Cost Renter Insurance Average Cost
Louisiana $1,968 $235
Florida $1,951 $188
Texas $1,893 $232
Oklahoma $1,885 $236
Kansas $1,584 $172
Rhode Island $1,551 $182
Mississippi $1,537 $258
Colorado $1,495 $159
Massachusetts $1,488 $194
Nebraska $1,481 $143
Connecticut $1,479 $192
Alabama $1,433 $235
Arkansas $1,373 $212
Minnesota $1,348 $140
New York $1,309 $194
Missouri $1,285 $173
South Carolina $1,269 $188
Georgia $1,267 $219
North Dakota $1,253 $120
Washington D.C. $1,235 $158
South Dakota $1,202 $123
Tennessee $1,196 $199
New Jersey $1,192 $165
Montana $1,174 $146
Wyoming $1,156 $147
Kentucky $1,109 $168
Hawaii $1,102 $185
North Carolina $1,086 $157
Illinois $1,056 $167
Maryland $1,037 $161
New Mexico $1,017 $187
California $1,008 $182
Indiana $1,000 $174
Virginia $999 $152
New Hampshire $972 $149
Iowa $964 $144
Alaska $959 $166
Michigan $942 $182
West Virginia $940 $188
Pennsylvania $931 $158
Vermont $918 $155
Maine $882 $149
Ohio $862 $175
Washington $854 $163
Delaware $833 $159
Arizona $825 $178
Wisconsin $779 $134
Nevada $755 $178
Idaho $730 $153
Utah $692 $151
Oregon $677 $163
     
United States $1,211 $180

It is important to note that this coverage is based on an All Risk on building, but named perils on contents policy form. This means that it is not the best coverage available, only a standard coverage as seen in an Ho3 policy. An all-risk on building and contents policy is a better form of insurance and will cost more.

The Real Value of Your Home Will Impact Cost of Insurance

If you are in a neighborhood with homes that have higher than average reconstruction cost value or dwelling value, then the national or state averages may be way off from what you are paying. For example, if the average cost is $1,918, but this is for a $200,000 home, then you can not reasonably expect to be paying close to an average price on home insurance if your home reconstruction value is $500,000 or over $1,000,000. If you aren't sure of the value of your home for insurance purposes, insurance companies will sometimes provide a home inspection, especially if you are with a high-value home insurance company that specializes in higher than average value homes.

Why the Cost of Home Insurance Could Be Higher or Lower in Some Areas

There are several factors that may affect the cost of home insurance in your area, such as:

  • Levels of crime in the area
  • Weather patterns, such as flooding, hurricanes, snowstorms, windstorms, etc.
  • Incidents of lawsuits for liability risks
  • Newer construction or well-maintained homes

Depending on the average age of homes in your area, and the condition of the infrastructure of your county, costs of home insurance may be higher than average if, for example, the city sewer lines are older, and are causing more water damage claims.

Another example is if all the homes in your area are older than average, then the claims may be higher, driving the cost of your insurance up. A home built in 2015 may have less chance of leaky roofs or other problems than one built in the 1960s that hasn't been renovated. Usually certain areas are built around the same time, so the zip code you are in will have data associated with it at the insurance company level. Even though you may have a solid home, if the general loss experience (claims paid) in the area is heavier for certain claims, the rates for insurance in that area may be higher.

Insurance companies may decide that in certain areas they will limit the amount of insurance payable due to claims, for example when an insurance company limits the insurance on the roof. The insurance there may be less expensive, but the coverage may be very limited. Less expensive does not always mean "good insurance"

Luckily many insurance companies have "target" profiles of homes or clients they are specializing in. Oftentimes an older construction may be more solid than a newer one, but the insurance company underwriting will set their pricing to reflect their experience as a base rate, then from there, they will add in discounts for other factors that may be particular to your specific situation which will help bring your cost down.

Shop for home insurance with a few different companies in your area in order to get the best idea of what kinds of prices you can expect.

Article Sources

  1. Insurance Information Institute. "Facts + Statistics: Homeowners and Renters Insurance." Accessed June 17, 2020.

  2. Insurance.com "Average Condo Insurance Rates." Accessed June 17, 2020.