How Much Does Homeowners Insurance Cost in 2024

According to a recent study by Insurance.com, the national average annual cost for home insurance is $2,601, assuming $300,000 of dwelling coverage. This cost varies by state. The cheapest, Hawaii, has an average annual rate of $613. The most expensive, Oklahoma, has an average annual rate of $5,858. Leading homeowners insurance companies’ rates rose an average of 11.3% in 2023.

A note on average costs: Throughout this article, we reference insurance average costs from multiple sources for U.S. states, coverage levels, and individual companies. Please remember that your insurance cost may vary considerably from what is shown here.

What factors affect your homeowners insurance cost?

Insurers look at multiple factors when calculating your homeowners insurance rate. These vary by company but typically include the following:

• Geographic location: A home in an area prone to disasters—such as hurricanes, tornadoes, earthquakes, or wildfires—will likely cost more to insure.
• Coverage selections: The coverage limits, deductibles, and optional coverages/riders you choose can all affect the cost of your policy.
• Construction materials: Homes built with materials resistant to fire, wind, storms, and other hazards may cost less to insure.
• Age and condition of the home: Your home’s age and condition may affect what you pay for insurance. You may save money by upgrading your systems, such as plumbing and electrical.
• Claims history: The number and value of claims you’ve previously reported can affect what you pay for insurance today.
• Credit history: Many insurers recognize a correlation between a person’s use of credit and their likelihood of filing claims. In other words, having a favorable credit history may help you pay less for insurance.
• Home security features: Security features, such as a burglar alarm, smoke detector, and other safety features, may help lower coverage costs.

Remember that rates typically vary by insurer, so always shop around with at least three or four insurers when buying a homeowners policy.

Average cost of home insurance by state

This is the average cost of homeowners insurance in each U.S. state as of June 2024, assuming $200,000, $300,000, and $400,000 of dwelling coverage, according to Insurance.com.

(1) Excludes hurricane deductible

Cheapest states for homeowners insurance

These are the cheapest states for homeowners insurance (based on $300,000 of dwelling coverage).

Most expensive states for homeowners insurance

These are the most expensive states for homeowners insurance (based on $300,000 of dwelling coverage).

Average cost of homeowners insurance by coverage amount

As mentioned earlier, coverage selection typically affects the cost of a homeowners insurance policy. Here are average annual premiums, according to Insurance.com, for policies with various levels of dwelling (with a $1,000 deductible) and personal liability coverage.

Dwelling coverage provides financial protection if your home is damaged or destroyed by fire, wind, vandalism, or other peril. Personal liability coverage provides financial protection if you’re held liable for someone’s injury or property damage and sued.

Average cost of homeowners insurance by deductible amount

Your choice of deductible can also affect what you pay for homeowners insurance. Here are average premiums for several leading homeowners insurers, for deductibles of $500, $1,000, and $2,000.

Source: The Zebra

Average cost of homeowners insurance by company

Each homeowners insurance company uses unique methods to calculate the cost of a homeowners insurance policy. So, costs can vary from company to company—sometimes dramatically. Here’s the average cost of a homeowners insurance policy with $200,000 of dwelling coverage from nine leading providers.

Source: The Zebra

Cheapest home insurance companies

Most expensive home insurance companies

Source: The Zebra

American Family: Great for diminishing deductibles option

Methodology for company reviews

We reviewed policy information for the cheapest and most expensive insurers from a recent review by The Zebra. All policy information came from company websites. A.M. Best information came from either company websites or directly from A.M. Best. We also examined company ratings in the J.D. Power 2023 U.S. Home Insurance Study.

We developed our “Great for” recommendations based on information provided by these companies on their websites.

How to estimate the cost of your homeowners insurance policy

The only way to know how much you’ll pay for homeowners insurance is to obtain quotes from companies. But to do that, you’ll need a clear idea of how much money you’d need to rebuild your home and replace your belongings. You’ll also want to understand your financial risk if you’re sued.

Estimate your home’s replacement cost

Imagine your home burned to the ground (admittedly, not a nice thing to think about), and you had to rebuild. The cost to rebuild from the ground up with all new materials is your replacement cost estimate. This—not your home’s market value—is the dollar value you should use when deciding on your dwelling and other structures' coverage limits.

A quick way to do this is to find the local per-square-foot cost of building a home and multiply that by the square footage of your home.

For a more accurate estimate, hire a professional appraiser. This individual will visit your home and use their knowledge of the local building and construction market and building codes to develop your estimate.

Note that when you apply for a policy, the insurer will typically have its appraiser review your property and calculate its replacement value. It’s still a good idea to get an independent estimate of your home’s value.

Insurance companies typically expect you to have dwelling coverage based on at least 80% of your home’s replacement cost. Any less, and the insurer may require you to pay additional out-of-pocket costs if you have a claim.

Estimate the cost to replace your personal property

Create a home inventory to estimate the cost of replacing personal belongings, such as furniture, appliances, electronics, clothing, etc. Use the total value of your belongings to calculate your personal property coverage limit.

Estimate your personal liability coverage needs

Personal liability coverage provides financial protection if you’re held responsible and sued over someone’s injury or property damage. To estimate your coverage need, total your net worth and add the value of your assets. Homeowners insurance policies typically offer up to $500,000 of coverage. So, if your estimate is above that amount, you may want to consider an umbrella policy.

Current trends in the homeowners insurance market

The inflationary period following the pandemic saw surges in pricing for many of the goods and services we rely on. Homeowners insurance is no exception.

A January 2024 story in the Wall Street Journal detailed how insurance companies are responding to market challenges, ranging from natural disasters to inflation, with sometimes drastic rate increases. In some cases, insurers are pulling out of especially challenging regions, leaving homeowners with fewer choices. For example, the state-government-sponsored “insurer of last resort,” Citizens Property Insurance, is now the largest homeowners insurer in Florida.

But living outside of places like coastal Florida doesn’t necessarily make a homeowner immune to this trend. Insurance is about spreading financial risk. As insurers seek to remain profitable, it’s possible that people in relatively risk-free areas of the country will see dramatic rate increases.

The bottom line is that the insurance industry is facing severe challenges. And wherever you live, you can expect to pay more than ever for homeowners insurance.

Tips to reduce the cost of homeowners insurance

Homeowners insurance is not cheap at a national average cost of $2,601. While saving money on insurance is becoming increasingly challenging in some areas of the country, there are strategies most homeowners can employ to save money.

Shop around for coverage

As we’ve seen in our review, the difference in cost between the most and least expensive insurers is more than $1,000 per year. Shopping around may be the most important thing you can do to save money on insurance.

Bundle your home and auto insurance policies

All the insurers we reviewed offer “multi-policy” discounts for bundling home and auto coverage. According to a recent review of multiple insurers by USA Today, these discounts range from 6% to 23%, depending on the insurer.

Ask about homeowners insurance discounts

All of the insurers in our review offer additional discounts besides multi-policy. These vary by company and may include discounts for home safety and security features, having a newer home, paying the policy premium in full, maintaining a claim-free record, and more.

Increase your policy deductible

Choosing a higher deductible means you pay more out of pocket to repair or rebuild your home if it’s damaged due to a covered peril. But it’ll bring down the cost of your coverage.

Maintain a good credit history

It’s common practice for insurance companies to review a customer’s credit history when calculating their homeowners insurance rate. Having a good history can help you save money on insurance.

Review your coverage needs with an independent insurance agent

Independent insurance agents represent multiple insurance companies. So—not only are they insurance experts who can understand your coverage needs—they know the ins and outs of the companies they sell and can help you find more ways to save.

TIME Stamped: The cost of homeowners insurance is rising

Homeowners insurance has gotten more expensive in recent months, and costs will continue to rise as insurers address challenges facing their industry. The good news for most homeowners is that they still have many choices for insurance companies, and there are several ways to save money on their policy.

Frequently asked questions (FAQs)

Who has the best home insurance?

The best home insurance for you is a policy that addresses your coverage needs at a cost that works for your budget. It’s recommended that you shop around with several homeowners insurers to ensure you get the best coverage.

Do you need a home warranty?

A home warranty is different from homeowners insurance. The latter provides financial protection if the home is damaged by fire, wind, hail, or other catastrophe. The former essentially provides discounted repair services for systems such as HVAC, plumbing, and electrical. While a home warranty may seem like an attractive proposition, it does have some drawbacks. Many homeowners may be better served with an “emergency fund” for such repairs.

Does the cost of home insurance affect my mortgage payment?

The cost of insurance should not affect your mortgage principal or interest. However, if—like many homeowners—you use an escrow account to pay your principal, interest, property tax, and home insurance, any change in your homeowners insurance cost will affect what you pay each month to your lender.

Note: Mortgage lenders typically require homebuyers to have homeowners insurance.

What should I do if my homeowners insurance policy is not renewed?

Unfortunately, some homeowners face the reality of their homeowners insurance policies not renewing. This is particularly true in areas where insurance companies are cutting back their business to limit their overall risk.

If your insurer informs you that your policy will not be renewed, check with other insurers to see if coverage is available. An independent insurance agent, who represents multiple insurers and understands the local insurance market, can help.

If you’re still struggling to get coverage, determine if your state offers an assigned-risk program for homeowners—or other insurance options. Again, in this scenario, an insurance agent can help.

What is the average deductible for homeowners insurance?

Home insurance companies typically offer a range of deductibles. For example, when you choose a policy, you can choose from options of $500, $1,000, and $2000. Remember that choosing a lower deductible means your policy will cost more, but you’ll pay less out of pocket if you have a claim.

What is the 80% rule in homeowners insurance?

The 80% rule states that a homeowners insurance company requires you to have dwelling coverage limits equal to at least 80% of your home’s replacement cost. If you fall beneath 80%, the insurer may not cover all your expenses if you have a claim.

What is the average cost of a home renovation?

The cost of a home renovation varies based on the extent of the work you plan to do (or have done). A light renovation averages $10–$60 per square foot, while an extensive renovation can run from $120–$275 per square foot. Many homeowners use home improvement loans to help with these costs.