How Much Does Homeowners Insurance Cost? (2023)

The average homeowners insurance premium is $2,724 a year, based on Insurify data. The cost of homeowners insurance is on the rise in part due to supply chain issues stemming from the pandemic. From 2017 to 2021, homeowners insurance premiums rose 12.2% nationwide, as reported by the Insurance Information Institute, and based on data from S&P Global Market Intelligence.^[1] 

As far as major cities, Detroit, Michigan, has the highest average monthly premium, at $485, while Seattle, Washington, has the lowest average monthly premium, at $126. While homeowners insurance premiums can vary among insurance companies, Safeco had the highest average rates, at $7,620 per year, and Commonwealth Casualty had the lowest average rates, at $924 per year. The state with the highest average premiums is Mississippi, coming in at $466 per month.

What is the average cost of homeowners insurance?

The average yearly premium is $2,724, based on Insurify data. Homeowners insurance can be a safeguard for your home and protect you financially against weather events, natural disasters, and theft, according to the National Association of Insurance Commissioners (NAIC).

“Homeowners insurance is a must if you’re buying a new home because you want to be prepared for every eventuality,” explains Michael Winkler, a real estate agent with over 30 years of experience and the co-founder and chief strategist at Sell Home Today. “Most mortgage lenders will require you to have homeowners insurance before you can apply for a mortgage.” 

Different factors like a home’s location, when it was built, the materials used, and more influence the cost of homeowners insurance.^[2]

Below are annual homeowners insurance rates for various insurance companies from Insurify data. Rates can be as low as $924 per year and up to $7,620 per year.

See More: 10 Best Home Insurance Companies

How much does home insurance cost in different states?

The state where you live can affect your home insurance rate. Some states are more vulnerable than others. For example, if you live in an area that is frequently hit by hurricanes or earthquakes, you may pay more. Sometimes, you may need to buy a separate policy and have a different deductible for certain events, such as earthquakes.^[3]

The highest annual premiums for home insurance are in Mississippi, at $5,592 per year. The lowest annual premiums for home insurance are in Oregon, at $1,356 per year. 

Average cost of home insurance by city

Homeowners insurance premiums can vary not only by state but also by location and ZIP code. Below are the average costs of home insurance in the top major cities by population.

Based on the list below, the highest average annual home insurance is $5,820 in Detroit, Michigan. The lowest average annual cost for homeowners insurance is $1,512 in Seattle, Washington.

Cheapest homeowners insurance

Here are the top 10 home insurance companies that you may find the cheapest rates from, based on Insurify data. The lowest rates may be found with Commonwealth Casualty, at an average of $924 per year. It’s important to shop around and find the right home insurance company that offers the coverage you need to protect your home at a price that fits your budget.

The cheapest states for homeowners insurance

Here are the top 10 states for the cheapest home insurance coverage, based on Insurify’s data. The three cheapest states on average for homeowners insurance are Oregon ($1,356), Arizona ($1,404), and New Hampshire ($1,476).

What factors affect homeowners insurance premiums?

Home insurance costs can vary widely and are determined by various factors. If you’re concerned about how much homeowners insurance costs per month, these factors will affect your rate:

• Location of the home: You may consider location as part of your real estate investment, but insurers consider it as well. Since homeowners insurance can cover property damage due to accidents or theft, your location will be assessed as part of setting your rate.^[4] Crime rates, safety, and distance to a fire station are all related to your location and can affect home insurance rates.^[2]

• Building materials used: Even a home’s building materials can affect home insurance policies. Some materials, like brick, may be more fire-resistant than other materials, like wood.^[2]

• The cost of your home: Homeowners insurance provides funds in the event your home is destroyed or damaged.^[4] The cost of your home and what it would cost to repair or rebuild your home are part of what affects your rate.^[3]

• Security and safety features: Since homeowners insurance covers theft, personal property, and liability, the security and safety features of your home will be assessed.^[4] For example, having a home alarm system, smoke detectors, and deadbolt locks can make your home more secure and may help lower costs.^[3]

• Credit history: Some insurers use your credit history as a factor when determining home insurance rates. Review your credit report at no cost at AnnualCreditReport.com, and sign up for credit monitoring. Maintaining relatively low credit card balances and paying any bills on time can help build your credit score.^[5]

• Amount of coverage: How much coverage you want to protect your home and belongings can also affect your home insurance policy rate. More coverage may mean paying higher premiums.^[6]

• Deductible amount: A deductible is the amount that you agree to pay before your insurance policy can provide benefits. Home insurance deductibles that are higher tend to result in lower premiums, and vice versa.^[2]

• The home’s age: Your home may have good bones, but if it’s much older than you are, that may affect the cost of home insurance and may mean paying more.

“Homeowner insurance premiums can be higher for vintage homes, as older homes come with construction materials and features that are expensive to replace,” explains Theresa Raymond, principal broker and owner of Smoky Mountain Real Estate. “Also, older homes often have outdated plumbing or problematic electrical systems. They appear to be high-risk elements to insurers.”

Check Out: A Homeowners Guide to Coverage Levels and Limits

What coverage types does your homeowners insurance include?

Aside from wondering how much homeowners insurance costs, you might be curious about what your standard home insurance policy actually covers.

“Your usual homeowners insurance will cover your dwelling, the [other] structures on your property, personal property inside your dwelling, and liability for damages or injuries to someone else’s property,” says Winkler. “Your garden-variety homeowners insurance policy will cover your property from natural disasters like fires, lightning strikes, windstorms, and hail storms, but might not cover earthquakes and flood damage. If you want to be protected from all sorts of natural disasters, you may need to purchase additional coverage.”

This can provide a range of protection in many different scenarios. Let’s take a closer look at what a standard homeowners insurance policy typically includes.

• The structure of your home: If the actual structure of your home gets ruined or damaged and needs to be rebuilt or repaired, home insurance covers it.^[7] A standard policy won’t offer coverage after a flood or earthquake, nor does it cover any maintenance. About 56% of homeowners believe that standard insurance covers floods, but it doesn’t. Only 4% of homeowners actually have flood insurance.^[8] To get protection for floods and earthquakes, you’ll need to get an additional policy. A flood policy can cost an average of $400 per year.^[3]

• Personal items: Aside from protecting your home’s structure, homeowners insurance protects your personal items as well. So if there’s a qualified event, such as a fire or theft, and your clothes or electronics are damaged or stolen, your homeowners insurance will kick in. This type of coverage is usually 50% to 70% of the insurance you have for the overall structure of your home.^[7]

• Liability coverage: As part of a standard policy, you’ll also get liability coverage. This can help protect you in the event of bodily injury or any property damage that happens to someone while in your home or that you cause. If there’s an injury, it can cover medical expenses. Additionally, if your pet or child causes damage to someone else’s personal items, this coverage can protect you as well.^[7]

• Additional living expenses (ALE) coverage: If your home experiences a lot of damage and is no longer livable while being repaired, additional living expenses coverage can provide financial assistance for expenses like hotels and food.

See Also: Types of Homeowners Insurance: Which One Do You Need?

Why are homeowners insurance costs increasing?

Alongside everything else, homeowners insurance is also increasing. The increase in cost is partly related to pandemic supply chain issues, inflation,^[1] and the increase in adverse weather events.^[8]

“One of the current culprits behind the rise of homeowners insurance costs today is the rising costs of labor and construction,” explains Raymond. “Due to inflation and natural disasters, labor and construction costs have surged significantly in recent days. Eventually, the costs for insurers have gone up, and they have to increase insurance costs for homeowners.”

Two-thirds of homeowners noted that homeowners insurance increased in the previous three years, largely due to fires and extreme weather. From 2018 to 2019, homeowners insurance increased by 2.2%, according to the NAIC.^[8] S&P Global Market Intelligence data found that rates increased 12.2% from 2017 to 2021.^[1]

How to reduce the cost of homeowners insurance

Given the higher rates for homeowners insurance, it’s important to find a way to reduce costs as much as possible. Here are some options to help you save.

• Boost your deductible. Your deductible is the portion you pay out of pocket before your insurance will cover the rest. If you can afford to pay more out of pocket, increase your deductible and it may lower your premium by up to 25%.^[3]

• Bundle your policy. If you have other types of insurance coverage, see if you can get a homeowners and car insurance policy from the same company. You may cut costs by 5% to 15%, the III explains.^[3]

• See if you’re eligible for discounts. Most companies provide homeowners insurance discounts. For example, you may qualify for a discount if you're retired. Ask your insurance company if you’re eligible for any discounts. You may see your rates lower by 10% to 25% if you’re older than 55 and retired.

• Research options. It’s always a smart idea to shop around, research options, and review various insurance companies for the best rates. You can contact an insurance agent for assistance or use a quote-comparison tool to see multiple rates in minutes.

How to compare home insurance rates

Shopping around for homeowners insurance doesn’t have to be a chore or a difficult task. Using Insurify, you can compare multiple options in a single place. You can input your ZIP code, provide your address and information about your property, and provide square footage, building materials, and home history to get quotes in a few minutes.

Frequently Asked Questions