Average cost of homeowners insurance in August 2022

A home insurance policy with $250,000 in dwelling coverage costs an average of $1,383 per year in the United States. You’ll only be required to have home insurance if you have a mortgage, but a policy that is tailored to your unique needs is an important part of your overall financial plan. Bankrate analyzed average premiums, obtained from Quadrant Information Services, for 163 home insurance companies to help you understand how much a home insurance policy costs.

How much is homeowners insurance?

The national average cost of home insurance is $1,383 per year for $250,000 in dwelling coverage. However, your homeowners insurance cost depends on several factors. Geographic location plays a significant role in premiums. Some areas of the country are more prone to natural disasters, for example, while other areas could have higher rebuilding costs. In addition, your coverage selections, like dwelling limits, play a large factor in determining your final house insurance cost.

Key takeaways

• In 2022, the average homeowner spends $1,383 on homeowners insurance per year for a policy with $250,000 in dwelling coverage.
• On average, the most expensive states for homeowners insurance in 2022 are Oklahoma, Nebraska and Kansas, while the least expensive states are Hawaii, Utah and Vermont.
• Homeowners insurance costs are rising, likely due to inflation, supply chain disruptions and increased costs for materials and labor.

How much does home insurance cost by state?

Home insurance rates vary greatly by state. Some states may not face high risk of natural disasters, for example, while others have a cheaper cost of living that makes it more affordable to rebuild after a claim. To complete Bankrate’s study on average premiums, we looked at how much home insurance cost in each state for $250,000 in dwelling coverage.

Average cost of homeowners insurance by state

*Rates are for $250,000 in dwelling coverage

Learn more: Home insurance rates by state

Average cost of home insurance by city

In addition to the state you live in, your individual city may also have an impact on your home insurance rates. Risk factors like weather damage and crime statistics vary by city, as do the costs for materials and labor. Below are the 25 largest cities in the U.S. and their average premiums.

*Rates are for $250,000 in dwelling coverage

The most expensive states for homeowners insurance

The states with the most expensive average annual home insurance premiums are Oklahoma, Nebraska, Kansas, Arkansas and South Dakota. How much does homeowners insurance cost in these pricey areas? In each of these states, the average price of home insurance exceeds $2,000 per year, and in the most expensive state — Oklahoma — homeowners pay well over $3,000 per year, on average. The higher rates are likely due to a higher risk of widespread home damage; many of these states are in the country’s infamous “Tornado Alley.” The average cost of homeowners insurance in these states is outlined below.

*Rates are for $250,000 in dwelling coverage

The threat of natural disasters plays a significant role in determining your home insurance cost. The more likely that damage is to occur, the more likely that insurance companies are to have to pay out claims. This means that higher premiums must be charged for companies to have sufficient reserves to handle a large influx of claims. Knowing the risks associated with your state and ZIP code can help you make informed home insurance decisions.

The least expensive states for homeowners insurance

The states with the least expensive average annual homeowners insurance premiums are Hawaii, Utah, Vermont, Delaware and Oregon. So, how much should you budget for homeowners insurance in these locations? These states have average premiums that are less than $1,000 per year, likely due to a relatively low risk of home damage from natural disasters like tornadoes, hurricanes and wildfires. Below, you can see the average cost of home insurance coverage in these states and how the prices compare to the national average.

*Rates are for $250,000 in dwelling coverage

These states may have a lower risk for natural disasters, and some could also have low premiums due to a generally low cost of living. The price of materials and labor may be lower in certain areas, which could mean you need less coverage to repair or rebuild your home if it is damaged.

Average homeowners insurance cost by company

You may be wondering if the homeowners insurance company you choose affects the price of homeowners insurance. The short answer is yes, because each company has its own rating system. Rates will vary between companies, even for the same amount of coverage, often by hundreds of dollars or more. Based on the homeowners insurance providers we reviewed, Erie Insurance is generally the least expensive insurance company for $250,000 in dwelling coverage, followed closely by USAA and Auto-Owners.

Based on our list of insurers, the most expensive homeowners insurance company is Amica, followed by The Hartford and Chubb. In addition to rate considerations, we reviewed these particular providers based on market share, customer satisfaction and coverage options. Not all companies may be available in all states.

Rates for $250,000 dwelling coverage

Rates for $350,000 dwelling coverage

Rates for $450,000 dwelling coverage

Each homeowners insurance company sets its rates, which means that the average home insurance cost will vary from carrier to carrier even within the same state and ZIP code (in states where ZIP code is allowed as a rating metric).

Obtaining home insurance quotes from multiple insurance providers could help you find the coverage you need for a lower price. Comparing multiple companies might help you decide which carrier can offer you the coverage and price that best fits your needs.

Learn more: Best home insurance companies

Average home insurance cost by coverage amount

While the rates above are for home insurance policies with $250,000 in dwelling coverage, not all homes will fit into that level of coverage. Plus, most homes in the U.S. may require more than that right now due to the cost of homes, labor, materials and other factors increasing substantially over the last two years. Some homeowners may need more or less coverage, depending on the size of their home, the features in their home and the cost of living in the area. For example, homeowners insurance for a home needing only $150,000 in dwelling coverage would usually cost significantly less per year than home insurance with $250,000 in dwelling coverage.

Generally, the less dwelling coverage you have, the cheaper your coverage will be. However, there’s no need to calculate exactly what your house would cost to rebuild before you shop for coverage. Home insurance companies have their own valuation tools to determine this, although having an idea of the rebuilding cost of your home could help you from over- or under-insuring your dwelling. The table below shows the average annual home insurance premium for five different levels of dwelling coverage.

Learn more: How much home insurance do you need?

Average home insurance cost by credit tier

In some states, your credit score could be used as an insurance rating factor. Credit scores can be an indicator of risk, as studies show that those with lower credit scores tend to file more claims compared to those with higher credit scores. For this reason, home insurance for people with bad credit is more expensive compared to those with average, good and excellent credit scores.

Not all states factor in credit scores, however. California, Hawaii, Maryland, Michigan and Massachusetts do not allow the use of credit scores for insurance rating purposes, while Washington is currently deciding on a temporary ban.

What is included in a home insurance rate?

Every homeowners insurance policy provides specific protections which help guard against substantial financial loss due to fire, storms, theft, vandalism and legal liability. The most common home insurance coverage types include:

• Dwelling coverage, equal to your home’s rebuilding cost: This pays for covered damages, up to your dwelling coverage limit, that affect your home’s primary structure and attached structures such as carports or garages. This coverage is typically set at replacement cost value.
• Other structures coverage, usually 10-20% of your dwelling coverage limit: This coverage provides property damage protection for structures not attached to your home, such as a detached garage, driveway, fences or shed.
• Personal property coverage, usually 50-75% of your dwelling limit: This protects the contents of your home, including clothing, furniture and electronics. Within your personal property coverage, you may have additional limits. For example, you may only have 10% of your personal property coverage for items stored at other locations, and you may have a cap on coverage for certain items, like fine art and money. You may have the option to choose between replacement cost coverage or actual cash value coverage. Replacement cost policies are typically more expensive than actual cash value policies.
• Personal liability coverage, usually between $100,000 and $500,000: This pays for medical expenses or damage to others’ property if you are legally liable for injuries on your property, incidents that happen away from your property or damage to others’ property. It also covers legal fees if a lawsuit is brought against you by the injured party.
• Medical payments coverage, usually between $1,000 and $5,000: This covers the medical expenses for someone outside your household who is injured on your property, regardless of fault.
• Loss of use coverage, usually between 10-20% of your dwelling coverage: This provides coverage for additional living expenses should you need to temporarily stay elsewhere while your home is being repaired after a covered claim.

Not every homeowners insurance policy contains the same components. If you are unsure what your policy covers, talk to your agent or insurance company for clarification.

Factors that affect the cost of homeowners insurance

Insuring your home is a gamble for an insurance company. Like auto insurance, certain types of houses — and houses located in certain areas — create a higher likelihood that the company will have to pay claims. Average home insurance rates vary based on several rating factors. Understanding the most significant factors that impact your home insurance premium might help to guide you when shopping for a home.

Home characteristics

Every home is different, which means insurance companies rate each home on a case-by-case basis. Your home’s specific characteristics will play a role in determining how much you pay for homeowners insurance.

• Year built: Older houses often cost more to insure because repair costs may be higher than they would for newer homes. Repairing or replacing features such as custom molding, plaster walls and wood floors could require specialists, making these features more expensive to repair in the event of a home insurance claim.
• Roof condition: The age and condition of a home’s roof play a role in homeowners insurance rates. Older roofs may not withstand windstorms or hail damage as well as newer roofs. Likewise, roof materials can affect your homeowners insurance rate. Some types of roofing material may be more resistant to damage, which could lower your premium, and other types may be more expensive to repair or replace, which could increase your premium.
• Construction quality: Many homeowners policies do not cover the expense of bringing a home up to the current building code following a claim. Insurance companies typically offer an optional ordinance or law endorsement, which can help pay for expenses related to code upgrades made during covered repairs.
• Special features: Features such as hot tubs and swimming pools can make a home more appealing, but they can also increase homeowners insurance premiums if they raise repair and replacement costs and add liability risks. Homes with recreational features such a pool, spa or jacuzzi might need higher liability coverage in case a guest sustains an injury.

Location characteristics

Geographic location typically impacts your insurance rates because every area of the country has a different risk level for potential damages. Some areas may have a higher risk of wind damage, for example, while other areas of the country often sustain damage from fires.

• Weather-related risks: Standard homeowners policies generally do not cover flood damage or damage from earthquakes. In fact, some insurance companies do not cover homes in flood zones at all. Other insurance companies sell private flood insurance or offer earthquake coverage in separate policies or endorsements to protect against these types of disasters.
• Fire risk: According to the Triple-I, structure fires caused over $12 billion worth of property damage in 2020, the most recent year with available data. Insurance companies rate homeowners premiums based on proximity to a fire station and fire hydrants because rapid emergency response often minimizes damage.
• Property crime risk: If you live in a high-crime neighborhood, your insurance rates might be impacted. You can help offset this cost to your premiums by installing additional safety features in your home, such as deadbolts and a security alarm system.

Learn more: What does homeowners insurance cover?

How to reduce the cost of homeowners insurance

Homeowners insurance is a good way to shield your finances from sudden misfortune, but it can have a large impact on your budget. Thankfully, there are ways to save on your homeowners insurance premium, which could help you get the valuable protection you need at a price that works with your wallet. If you need to lower your home insurance bill, consider taking the following steps:

• Bundle your auto and home policies: Many insurance carriers also offer auto insurance. If you buy your homeowners insurance coverage with the same company that handles your auto policy, you could save on both premiums.
• Compare home insurance quotes: Shopping around and reviewing homeowners insurance quotes from three or more companies could help you find the coverage you need at the most competitive price.
• Ask for discounts: In addition to bundling discounts, many companies offer other ways to save, including claims-free discounts, home alarm system discounts and loyalty discounts. If you’re not sure if you qualify, a company representative may be able to help you identify savings opportunities.
• Choose appropriate home coverage types: Understanding which type of home insurance is right for you, which optional coverage types you need and what policy limits are best for your situation could help you prevent over- or under-insuring your home.
• Improve your credit score: Most states take your credit into consideration when you purchase insurance. Homeowners with lower credit scores have a higher statistical likelihood of filing claims and, as such, usually pay higher rates. Improving your credit could lower your premium over time.
• Work with an independent agent: Working with any licensed insurance professional can be helpful, but independent insurance agents can have a significant impact on your home insurance cost. Independent agents work with numerous companies, which allows them to provide a single touchpoint for you while taking over the legwork of shopping your account.
• Renovate your home: Some home renovations, like getting a new roof or replacing old, out-of-date electrical or plumbing systems, can help lower your premium. These projects can reduce the risk of home damage, which, in turn, may save you money on insurance.
• Increase your home insurance deductible: Your deductible is the amount of a claim you are willing to pay out of pocket. Most homeowners insurance policies have a minimum $1,000 deductible, although $500 deductibles may be an option with some companies. The higher your deductible, the lower your premium, but the more you’ll pay out of pocket if you file a claim.

Learn more: Best home and auto insurance bundles

Frequently asked questions