Factors that affect home insurance rates
Here’s an overview of the factors that affect what you’ll pay for home insurance coverage:
The more square footage your home has, the higher your home insurance rates will generally be. Larger homes cost more to repair or rebuild because labor and material costs are higher. A bigger home represents more risk to your homeowners insurance company than a smaller dwelling.
Home age
It can be expensive to replace certain features or construction materials on older homes. That’s why home insurance companies usually charge higher premiums for older homes with higher construction costs.
The table below shows how much home insurance might cost for a $400,000 house by home age.
| |
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| 1940 | $4,702 |
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| 1970 | $4,686 |
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| 2000 | $4,487 |
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| 2010 | $3,933 |
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| 2020 | $2,894 |
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Proximity to fire stations
Since fire is one of the significant perils homeowners insurance protects your house from, anything that reduces the risk of a fire occurring can help reduce your home insurance costs.
For example, if you live close to a fire station or fire hydrant, you may earn cheaper home insurance rates because firefighters can get to your home faster and extinguish a fire. Property fires caused approximately $23 billion in damages in 2023, according to the National Fire Protection Association.
Level of coverage
Several types of home insurance policies are available.
HO-3 policies are the most common, but they offer less coverage than some other options. Generally, HO-3 policies pay claims at actual cash value — meaning what your personal property is worth minus depreciation. But that may not be enough to fully replace, repair, or rebuild your damaged property.
An HO-5 policy provides broader coverage and typically provides replacement cost value for covered claims. But HO-5 policies generally cost more than HO-3s.
Claims history
Your claims history is also an important factor insurers consider when determining your homeowners insurance rates. You’ll likely face more expensive rates if you’ve filed many claims in the past for home damage.
Credit rating
Most states allow insurance companies to consider credit information when setting home insurance rates.
Insurers can use information in your credit file, like payment history, credit usage, and recent credit applications, to generate a credit-based insurance score. That score estimates how likely you are to file a claim. Generally, the better your credit history, the more likely you are to qualify for lower home insurance rates.
Location
Your ZIP code and neighborhood can influence your home insurance premiums. If you live somewhere that’s more prone to a natural disaster, like a hurricane, or has a higher crime rate, you can expect more expensive home insurance costs.
The following table illustrates how location within a state can affect home insurance costs.
| | | | |
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| Alaska | 99705 (North Pole) | $1,352 | 99801 (Juneau) | $1,073 |
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| Alabama | 36532 (Fairhope) | $8,251 | 36830 (Auburn) | $2,774 |
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| Arkansas | 72450 (Paragould) | $3,809 | 72764 ( Springdale) | $3,279 |
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| Arizona | 85032 (Phoenix) | $2,709 | 85383 (Peoria) | $2,084 |
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| California | 90011 (Los Angeles) | $2,525 | 92154 (San Diego) | $1,656 |
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| Colorado | 80918 (Colorado Springs) | $5,332 | 80526 (Fort Collins) | $3,955 |
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| Connecticut | 6511 (New Haven) | $2,577 | 6010 (Bristol) | $1,707 |
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| Delaware | 19958 (Lewes) | $1,707 | 19808 (Wilmington) | $975 |
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| Florida | 33012 (Hialeah) | $18,365 | 32218 (Jacksonville) | $4,245 |
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| Georgia | 30349 (Atlanta) | $3,196 | 30004 (Alpharetta) | $2,529 |
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| Hawaii | 96720 (Hilo) | $1,166 | 96818 (Honolulu) | $1,164 |
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| Iowa | 51503 (Council Bluffs) | $3,200 | 52001 (Dubuque) | $2,263 |
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| Idaho | 83402 (Idaho Falls) | $1,939 | 83709 (Boise) | $1,818 |
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| Illinois | 60618 (Chicago) | $2,945 | 60565 (Naperville) | $2,284 |
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| Indiana | 46227 (Indianapolis) | $2,356 | 47909 (Lafayette) | $1,850 |
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| Kansas | 67801 (Dodge City) | $4,715 | 66049 (Lawrence) | $3,015 |
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| Kentucky | 40214 (Louisville) | $2,954 | 40356 (Nicholasville) | $2,316 |
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| Louisiana | 70065 (Kenner) | $14,468 | 71111 (Bossier City) | $4,197 |
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| Massachusetts | 2740 (New Bedford) | $2,221 | 01201 (Pittsfield) | $1,527 |
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| Maryland | 21215 (Baltimore) | $2,271 | 21740 (Hagerstown) | $1,592 |
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| Maine | 04011 (Brunswick) | $1,341 | 04901 (Waterville) | $1,233 |
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| Michigan | 48214 (Detroit) | $4,274 | 48103 (Ann Arbor) | $1,800 |
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| Minnesota | 55407 (Minneapolis) | $3,083 | 55811 (Duluth) | $2,516 |
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| Missouri | 64118 (Kansas City) | $3,205 | 63366 (O’Fallon) | $2,537 |
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| Mississippi | 39564 (Ocean Springs) | $8,375 | 39759 (Starkville) | $2,532 |
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| Montana | 59102 (Billings) | $2,768 | 59901 (Kalispell) | $1,515 |
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| North Carolina | 28314 (Fayetteville) | $3,499 | 28806 (Asheville) | $2,006 |
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| North Dakota | 58801 (Williston) | $3,254 | 58078 (West Fargo) | $2,492 |
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| Nebraska | 69101 (North Platte) | $4,350 | 68516 (Lincoln) | $3,133 |
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| New Hampshire | 03801 (Portsmouth) | $1,284 | 03060 (Nashua) | $1,162 |
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| New Jersey | 08401 (Atlantic City) | $1,675 | 08873 (Somerset) | $1,061 |
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| New Mexico | 88101 (Clovis) | $6,458 | 88001 (Las Cruces) | $2,085 |
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| Nevada | 89121 (Las Vegas) | $1,664 | 89701 (Carson City) | $1,233 |
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| New York | 10025 (New York) | $3,088 | 14850 (Ithaca) | $1,224 |
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| Ohio | 45458 (Dayton) | $1,614 | 44312 (Akron) | $1,419 |
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| Oklahoma | 73099 (Yukon) | $7,043 | 74055 (Owasso) | $5,282 |
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| Oregon | 97701 (Bend) | $1,438 | 97229 (Portland) | $1,191 |
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| Pennsylvania | 19120 (Philadelphia) | $2,026 | 17603 (Lancaster) | $1,148 |
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| Rhode Island | 02840 (Newport) | $2,413 | 02864 (Cumberland) | $2,011 |
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| South Carolina | 29412 (Charleston) | $5,293 | 29651 (Greer) | $1,853 |
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| South Dakota | 57701 (Rapid City) | $3,426 | 57401 (Aberdeen) | $2,456 |
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| Tennessee | 38134 (Memphis) | $3,210 | 37918 (Knoxville) | $2,206 |
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| Texas | 77479 (Sugar Land) | $6,524 | 79936 (El Paso) | $2,227 |
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| Utah | 84118 (Salt Lake City) | $1,716 | 84043 (Lehi) | $1,556 |
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| Virginia | 23503 (Norfolk) | $2,678 | 22903 (Charlottesville) | $1,273 |
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| Vermont | 05701 (Rutland) | $1,030 | 05403 (South Burlington) | $885 |
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| Washington | 98908 (Yakima) | $1,680 | 98115 (Seattle) | $1,318 |
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| Wisconsin | 53215 (Milwaukee) | $1,665 | 53081 (Sheboygan) | $1,283 |
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| West Virginia | 25705 (Huntington) | $1,547 | 26554 (Fairmont) | $1,221 |
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| Wyoming | 82001 (Cheyenne) | $2,241 | 82901 (Rock Springs) | $1,337 |
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