Homeowners Insurance Facts and Statistics (2023)

Buying a home is a significant investment. Homeowners insurance helps you protect this asset when the unexpected occurs. Home insurance covers your home’s structure and your personal property. It also includes liability coverage in the event of an injury on your property.^[1]

In this guide, we’ll explore some key facts about homeowners insurance, discuss the most common home insurance claims, and learn about the most popular homeowners insurance companies.

Homeowners insurance facts and statistics

Several factors affect how much you pay for homeowners insurance, including your home’s age, value, and location. Other factors that affect the price include the type of policy you buy and the insurance company you choose. Understanding the factors that determine your rates can help you find an affordable plan that meets your needs.^[1]

Read More: 5 Best Home Insurance Companies

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Most expensive states for homeowners insurance

Certain states tend to have more expensive home insurance rates than the rest of the country. For example, states like Florida and Alabama experience severe weather regularly, which leads to more insurance claims. Homeowners in these states often pay higher homeowners insurance premiums as a result.^[2]

The following table illustrates how some states pay more for home insurance. For example, Florida homeowners pay, on average, about 108% more for home insurance than the national average of $1,319 per year.

Least expensive states for homeowners insurance

The five states below have the lowest average homeowners insurance premiums in the country. Homeowners in these states may file fewer claims due to less severe weather patterns. The states also might have different rules that affect average rates.^[2]

Homeowners insurance policies

Eight different types of homeowners insurance policies are available to homeowners. These policy types vary in how much coverage they offer and which homes they’re best suited for.

• An HO-3, or special form policy, is the most common type of homeowners insurance policy. HO-3 policies cover damage or loss from extreme weather, theft, falling trees, and more. 

• An HO-1, or basic form policy, offers less-robust coverage. For example, an HO-1 policy covers weather-related damage but not damage from fallen trees.^[3]

Specific policy types are also available for older homes, mobile homes, condos, and rented homes. Assess your needs before choosing a policy type. A special form policy works for most homeowners, but some opt for even more robust coverage with an HO-5, also known as a comprehensive form policy.^[3]

Learn More: How Much Homeowners Insurance Do You Need?

Homeowners insurance policies owned

The table below shows the different policy types by percentage purchased in 2020. HO-3 policies are the most common homeowners insurance policy, accounting for 55.5% of all homeowners policies written in the U.S. HO-4 policies are the next most common, at 20.8%, and HO-5 policies are the third most common, at 9.3%.^[3]

Homeowners insurance perils

Any cause of property damage or loss is known as a peril. Common perils include fire, wind, theft, falling trees, and more. Home insurance policies vary based on how many perils they cover. For instance, a comprehensive home insurance policy is the most robust and covers all perils except those specifically excluded.^[1]

Standard home insurance policies don’t cover damage caused by floods or earthquakes. Homeowners need to buy separate flood insurance and earthquake insurance policies in addition to their standard homeowners insurance policy if they want coverage. If you live in a region that frequently experiences natural disasters, you should strongly consider purchasing flood or earthquake insurance.^[1]

Most common home insurance claims by peril

The chart below shows the percentage of claims filed by peril in 2020, according to the Insurance Information Institute.^[4]

Wind- and hail-related claims were filed most frequently by homeowners. These claims made up 46% of all property damage claims in 2020. Fire and lightning lead to the second-most claims (24%), followed by water damage and freezing (20%). Loss from theft accounts for less than 1% of all insurance claims.^[4]

While theft is rare, you should still ensure that you have robust personal property coverage, which protects belongings like furniture, electronics, appliances, and more. You should also consider adding an insurance rider or endorsement to your policy if you own expensive jewelry or artwork.^[5]

Learn More: What Is Windstorm Insurance?

Homeowners insurance claims

A home insurance claim is a homeowner’s request for financial reimbursement after a covered loss. For instance, if a hurricane causes structural damage to your home, you might file a claim to request coverage to pay for necessary repairs.

Assess the damage before filing a claim. If the cost of repairs is less than your deductible, you can probably handle the repairs yourself without involving insurance. Notify your insurance company immediately if you decide to file a claim, and follow the steps below:

1. Document all property that has sustained damage, taking photos and videos as necessary.

2. Retrieve your policy number, which you can find on the online account associated with your policy or on the forms you signed when you opened the policy.

3. Contact your insurance company’s claims department by phone, online, or mobile app. Explain what happened and describe the damage in detail.^[6]

Once you’ve filed a claim, a home insurance adjuster will assess the damage and calculate the cost of repairs. The adjuster will also closely examine your policy and determine what you owe based on your deductible. Your insurance company will then contact you to share its calculations and discuss next steps.^[7]

Learn More: How to File a Home Insurance Claim

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Commonly claimed household items

Jewelry, electronics, and apparel are examples of some items you might claim on your insurance. Furniture, appliances, and tools are other items that homeowners should try to protect. Burglar-proofing your home and investing in a home security system are effective ways to minimize the chance of theft. Purchasing anti-theft devices can also qualify you for home insurance discounts.

Nearly half of all homeowners said they keep an inventory of their possessions, according to a recent Insurance Information Institute survey.^[4] Preparing a detailed inventory can make filing a claim much easier in the event of a loss.

Most expensive home insurance claims

Fire- and lighting-related claims are by far the most expensive, costing $77,340 on average. Wind and hail are the second most-expensive claims, at $11,695 on average, followed closely by water damage claims that average $11,650. Theft-related claims are among the least expensive, averaging $4,415 per claim.^[4]

A homeowner might also file a liability claim when an injury occurs. Liability claims are filed less frequently than property damage claims but are often quite expensive. The average bodily injury liability claim is $30,324, while medical payments claims average $7,147.^[4]

Homeowners insurance costs

The average homeowner pays $2,724 for home insurance. Still, you might find yourself paying much more or much less, depending on some key factors, including:

• State: You may have higher rates if you live in a state that’s at high risk for severe weather. Insurance companies know that you have a higher chance of filing a claim, so they charge higher premiums to offset the risk.

• ZIP code: Home insurance rates can vary within a state, city, or neighborhood. Homeowners who live closer to emergency services, like a fire station, are considered to be at a lower risk for major losses and therefore pay lower rates on average.

• Home condition: A home that’s older or in disrepair has a higher risk of damage. Homeowners can earn discounts when they make home repairs that decrease the risk of damage.

• Home value: Homes that are more expensive to repair naturally cost more to insure. Insurance experts often recommend buying insurance worth 80% of your home’s replacement cost — so you’ll be buying more if your home is expensive to rebuild.

• Deductible: If you have a higher deductible, you’ll pay lower monthly premiums. The deductible is the amount you pay before insurance coverage kicks in, which means you take on more financial risk when you raise your deductible.

• Insurance provider: Prices vary from company to company. Shopping around to compare prices is one of the best ways to lower your monthly home insurance premiums.^[3]

How home insurance costs have changed over time

The chart below from the Insurance Information Institute shows how average homeowners insurance premiums have steadily increased over the past decade. The average annual premium for an HO-3 policy was $909 per year in 2010 — $363 less than the 2019 average premium.^[4]

Many different factors caused the rise in insurance costs over the past decade. As real estate values and building costs rose, insurance costs also increased. Additionally, the U.S. has experienced more severe weather in recent years, leading to increased claims and premiums.

Economic factors also play a role in homeowners insurance rates. Rising inflation and interest rates can affect real estate values, which leads to changes in insurance premiums. Regulations on the state and federal levels might play a role in homeowners insurance costs too.^[3]

Home insurance companies by market share

The percentage of policyholders who purchase insurance from a given insurer is known as an insurance company’s market share. State Farm is the country’s most popular home insurance company by market share. In fact, State Farm writes 18% of all home insurance policies in the U.S., according to NAIC data.^[8]

The five largest homeowners insurance providers in the U.S. write nearly half of all home insurance premiums. Still, working with a large national company isn’t your only option. You might prefer to work with a smaller regional insurer that knows your area well and can provide an attentive, personal experience.

Read reviews and ask around before choosing an insurance company. Friends and family who are also homeowners in the area can offer their experiences with local companies. It’s also crucial to compare quotes side by side from at least three different companies to help you find a homeowners policy that meets your needs and budget.

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