7+ years writing insurance and personal finance content
Contributor to top media, including USA Today
A passionate personal finance advocate, Sarah’s writing has graced the pages of many of the personal finance and insurance industries’ top web publications.
7+ years in business and financial services content
Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.
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The rate you pay for home insurance varies based on several factors, including the location, size, and age of your home.[1]
The average rate for homeowners insurance across the country is $2,191 per year for $400,000 in dwelling coverage, according to Insurify data. If you only need $100,000 in dwelling coverage, you’ll pay an average of $847. And if you need $500,000 in dwelling coverage, you’ll pay an average of $2,665.
This article will show you what goes into these costs while also giving you the insights you need to make your home insurance as affordable as possible.
Quick Facts
Several factors determine your home insurance rates, including your home’s location, value, age, and more.
Replacement cost coverage pays to replace your damaged home or items with identical components.
Residents of Florida pay the highest home insurance rates in the nation, on average, while residents of New Hampshire, Oregon, and Ohio pay some of the lowest rates.
Average cost of home insurance
The average cost of home insurance for $300,000 in dwelling coverage is $1,751 per year. However, rates around this average vary drastically based on the home’s location, the insurance company, and more.
Insurers rate your home’s unique factors differently. That’s why it’s important to compare quotes from several insurers to find the best policy for you at a rate you can afford.
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Why home insurance rates are increasing
Home insurance rates have been on the rise in recent years. Home insurance premiums are expected to rise by 9% in 2023, according to a recent Insurify report. That adds to the 7% increase in home insurance premiums seen between 2021 and 2022.
Several contributing factors cause these increases, including inflation driving up the cost of home repairs, an uptick in severe weather events that cause significant damage to homes, and supply chain delays.
Average cost of home insurance by state
Home insurance costs vary from state to state. The table below illustrates the annual average costs you can expect to find in each state for $300,000 in dwelling coverage.
Cheapest and most expensive states for home insurance
The cheapest states for home insurance include Vermont, Utah, and Oregon. Each of these states experiences relatively few natural disasters, which could mean fewer claims for insurance companies to handle.[2]
On the other end of the scale, Florida, Oklahoma, and Louisiana are the most expensive states for home insurance. A higher number of natural disasters that cause extensive damage and lead to many home insurance claims are likely partially responsible for higher premiums in these states.
Why Florida homes are more expensive to insure
When looking at the average costs, you might have noticed that Floridians pay the most for home insurance. Some Floridians have seen their insurance premiums increase by more than 40% this year.[3]
Severe weather, particularly hurricanes, is one major factor pushing the cost of insurance higher in the Sunshine State. When a major storm makes landfall in Florida, it can cause billions of dollars in damages. For example, when Hurricane Ian hit southwest Florida in 2022, it caused more than $109 billion in damages.
Beyond severe weather, insurance companies face other challenges in the state, including fraud (particularly roofing fraud), high replacement costs, and instances of excessive litigation.
Average cost of home insurance by dwelling coverage
Dwelling coverage is an essential component of your home insurance policy. Specifically, dwelling coverage is designed to help you pay to repair or rebuild the structure of your home after damage from a covered peril.
For example, if your roof is damaged by hail, dwelling coverage might help you pay to repair it.
The cost of home insurance varies based on the level of coverage you need. The table below includes the average annual cost of $250,000 in dwelling coverage and $500,000 in dwelling coverage by insurance company.
Multiple factors affect home insurance premiums, and you can find the most influential factors here.
Location
The location of your home has a big effect on your home insurance premiums. Some of the risks tied to your home’s physical location include:
The location of the nearest fire department: A nearby fire department can lower your insurance costs. But a home without a highly rated fire department nearby might face higher rates.
Proximity to the coast: In general, homeowners closer to the coast will face higher insurance premiums than inland homeowners.
Rate of crime: Homeowners in areas with higher crime rates might pay higher insurance premiums than homeowners in areas with lower crime rates.
Replacement cost of your home
The replacement cost of your home equals the amount of money required to rebuild your home from scratch. This is different from your home’s market value, which includes the value of your land and is focused on what someone would be willing to pay to purchase the property. In general, home insurance premiums are based on replacement costs.
This means that a larger home with expensive features will be more expensive to insure than a smaller home with baseline features.
If you own an older home, you may not be able to buy a replacement cost policy. Instead, your insurer might offer a modified replacement cost policy. This means the policy would cover repairs and replacements using modern materials.
Coverage type
If you opt for an insurance policy with additional coverage, you’ll face higher insurance premiums. Below is a breakdown of some of the standard coverage types:
Dwelling coverage
If your home is damaged or destroyed by a covered event, this type of coverage will help you pay to repair or replace the home.
Other structures coverage
If you have additional buildings that aren’t attached to your home, like a garage or a shed, dwelling coverage usually won’t cover them. Instead, you’ll need to purchase other structures coverage.
Personal property coverage
Personal property coverage helps replace personal items, such as clothing and electronics, destroyed by a covered peril, like a fire.
Liability coverage
If someone is injured on your property,liability coveragewill help pay for their medical expenses and your legal fees. It may also cover property damage that you cause to others.
Loss of use coverage
This coverage kicks in when you have to temporarily leave your home due to damage. It helps pay for hotel stays, meals, and transportation.
Higher coverage limits generally lead to higher home insurance premiums.
Your individual situation
Your unique situation will also affect your home insurance premiums. For example, in many states insurers can consider your credit history when determining premiums. Homeowners with a higher credit rating tend to pay less for home insurance.
Other individual factors that can affect your rates include the condition of your roof, your marital status, and whether you own a dog, a swimming pool, or a trampoline.
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What home insurance covers
The level of home insurance coverage you need varies based on your unique situation. Homeowners with a more expensive, older home likely need a higher level of coverage than someone with a smaller, new home.
The table below outlines some of the things that home insurance covers and potential coverage amounts.
Coverage Type
▲▼
Amount Covered
▲▼
What’s Covered
▲▼
Dwelling coverage
Varies but should be based on the cost to rebuild your home
The cost to repair or replace the physical structure of your home; damage caused by flood, earthquake, or routine wear isn’t covered
Other structures coverage
Varies but usually equates to 10% of the insurance value on your home
The cost to repair or replace separate structures on your property, like a shed or fence
Personal property coverage
Varies but usually equates to 50% of the insurance value on your home
Funds to repair or replace personal belongings you store in your home; for example, it might help replace items lost in a fire
Personal liability coverage
$100,000+
If someone not living with you is injured on your property and you’re liable, this coverage can help pay for your legal expenses and their medical care.
Medical payments coverage
Varies but usually $1,000 to $5,000
If someone is injured on your property, medical payments coverage can help pay for their medical bills, regardless of fault.
Loss of use coverage
Varies but usually 20% of the insurance coverage value on your home
If damage to your home makes it unlivable, loss of use coverage can help you pay for living expenses elsewhere. For example, it might cover the cost of hotel bills and restaurant meals.
How to get cheaper home insurance
Home insurance costs are rising. The good news is that you can take action to keep your insurance costs on the lower side. Below are some strategies to consider as you seek lower rates:
Shop around. Every insurance company offers different premiums. As a homeowner, it’s a good idea to shop around to lock in the best rates.
Increase your home insurance deductible. In general, a higher deductible leads to a lower insurance premium. If you can afford to take on a higher deductible, this is a viable option.
Bundle your insurance policies. If you need home insurance, you likely need other types of insurance, like life insurance or auto insurance. Consider bundling your policies through the same insurance company to snag a better rate on each of them.
Ask for a discount. Many insurance companies offer discounts. Don’t be afraid to ask if you qualify for a discount on your homeowners insurance policy. You may qualify for something you weren’t aware existed.
Work on your credit. In many states, insurers are allowed to consider your credit history when determining rates. Generally, better credit translates to lower insurance premiums. Consider building your credit by paying your bills on time and paying off credit cards.
Limit your insurance coverage. A lower amount of liability insurance could help you tap into lower insurance costs. But try not to skimp on the dwelling coverage amount; otherwise, you could be in a tough situation if your home is destroyed and you need to file a claim.
Home insurance cost FAQs
Still have questions about how to secure a more affordable home insurance rate? Find your answers here.
What is the average cost of home insurance?
The average homeowners insurance rate across the nation is $1,751 per year for $300,000 in dwelling coverage. But average costs vary, sometimes dramatically, from state to state.
How is home insurance calculated?
Average home insurance rates are helpful, but they don’t tell the whole story. Insurance companies take several different factors into account when determining premiums, including your location, the size of your home, and local construction costs.
How much homeowners insurance do you need?
In general, you’ll need enough home insurance coverage to rebuild the structure of your home. For example, if it’ll cost $500,000 to rebuild your home, then you’ll want $500,000 in dwelling coverage. But if your rebuilding costs are lower, you won’t need as much coverage.
Why are home insurance rates increasing?
Many factors are pushing the cost of home insurance higher. An increasing number of severe weather events is one contributing factor. In some states, like Florida, higher levels of insurance fraud also push costs higher. Finally, the continued rise in inflation makes home insurance more expensive because it raises home values and the costs of materials needed to build or repair homes.
Methodology
Insurify’s team of data scientists analyze millions of home insurance quotes and weigh publicly available reviews, claims payout rates, complaint indexes, financial strength scores, company reputations, and proprietary quoting data. Our editorial team applies this insight to inform our unbiased reviews and recommendations.
NPR. "Feeling the pinch of high home insurance rates? It's not getting better anytime soon."
Sarah SharkeyInsurance Writer
Sarah Sharkey is a personal finance writer who enjoys helping people make savvy financial decisions. She covered insurance and personal finance topics. You can find her work on Business Insider, Money Under 30, Rocket Mortgage, Bankrate, and more. Connect with her on LinkedIn.
7+ years in business and financial services content
Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.
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