Home insurance is essential if you own a home. sure, your mortgage company requires it, but you’re the one who really needs it and will benefit from the coverage. Homeowners insurance protects your most important assets: your home and your belongings.
We looked at rates across the country to find the average cost of homeowners insurance. your exact price will depend on specific personal information, such as the location and age of your home and the coverage limits you choose. however, our review can give you an idea of what you could expect to pay.
average cost of home insurance by company
The national average cost of homeowners insurance is $1,854 per year, according to analysis by a Forbes advisor. this is for a home insurance policy with $300,000 of dwelling coverage and $100,000 of liability coverage.
Among the large home insurance companies, we found that Progressive was the cheapest at an average of $1,236. travelers was the most expensive at $2,871, which is $1,635 more than progressive.
Rates vary significantly between companies because each one has its own pricing formulas. That means it’s vital to shop around when shopping for a homeowners policy. You don’t know which company will offer you the best rates, and possibly save you hundreds of dollars, until you shop around.
average cost of homeowners insurance by state
Our analysis of average homeowners insurance rates by state found Hawaii to be the cheapest state for homeowners insurance at an average of $558. At the other end of the spectrum is Oklahoma, which has an average annual rate of $4,122. $3,564 difference in costs shows that a home’s location really does matter.
The states that complete the five cheapest states for home insurance are:
- utah: $817
- oregon: $834
- vermont: $944
- new hampshire: $961
- nebraska: $3309
- Kansas: $3035
- texas: $3,013
- Louisiana: $2988
- your home location
- the cost of rebuilding the house
- the materials used to build the house, such as wood, stone, or brick
- the age of the house
- fire rating of your home’s location (how close it is to a fire hydrant or water source and the fire department)
- your personal claims history
- history of claims on your property
- the coverage and limits of the policy you choose
- the deductible you select
- your credit (except in california, maryland and massachusetts)
Among the most expensive states for home insurance, we see others like Oklahoma that are more or less in the middle of the country and are prone to inclement weather:
average home insurance rates by state
factors in home insurance rates
There are several factors that insurance companies often use to determine home insurance rates, including:
what does home insurance cover?
A standard homeowners insurance policy, also known as HO-3, covers your dwelling (house) for any issues except those listed as exclusions on your policy. common exclusions are flood and earthquake damage.
While your home and belongings are two of the main items covered by homeowners coverage, there is much more to a home insurance policy.
housing coverage (house structure)
This pays to repair or replace (rebuild) your home and attached structures, like a garage or deck. the homeowners insurance limit should cover the cost of rebuilding your home.
coverage of other structures
This covers damage to property not attached to your home, such as a shed or gazebo. the coverage amount is usually 10% of your home’s coverage limit, but you can increase it.
loss of use
Also known as additional living expenses, loss of use insurance pays for the additional costs you incur if you are unable to remain in your home due to an issue covered by your policy. Expenses could include hotel costs, restaurant bills, and services, such as boarding a pet. loss of use coverage is generally set at 10% to 30% of your home’s coverage limit.
personal property insurance
This covers damage or loss (due to theft or destruction) of your personal belongings, such as clothing, electronics, furniture and appliances. coverage is generally set at 50% to 70% of your homeowners coverage limit, depending on what you choose when you start your policy.
You can schedule your personal property so that high-value items are fully insured. Scheduled personal property, also called an endorsement, float, or rider, is an optional coverage that provides more coverage for the expensive items you own.
This covers accidental damage or injury you cause to others. For example, if your dog gets loose and bites someone in the park, the injured person could file a liability claim against you or sue you. Personal liability in home insurance covers settlements, judgments against you, and attorney costs, but only up to the liability limits of your policy.
You can choose a liability limit for home insurance, which typically starts at $100,000, though it’s wise to have enough to cover what could be taken from you in a lawsuit.
medical payments to others
This type of coverage is also called guest medical coverage. covers minor injuries to non-household members, for example, a guest slipping on icy steps. Medical payments coverage amounts typically range from $1,000 to $5,000.
related: what does homeowners insurance cover?
how to reduce home insurance costs
You can’t get up and move your house, but there are ways to lower your homeowner’s insurance costs.
increase your deductible
Increasing your deductible is one change you can make to save money. If you increase your deductible from $500 to $1,000 or more, your rates will go down a bit. you bear more of the financial burden if you file a claim, which translates to a lower premium.
compare home insurance quotes
One of the best and easiest ways to save is to compare home insurance rate quotes from multiple companies. check the rates of at least three so you can see the range of potential costs. The cost of home insurance can vary greatly from one insurance company to another.
proactively ask about home insurance discounts
Don’t assume your home insurance company automatically offers you all the discounts you qualify for. Requesting a review of home insurance discounts is a great way to potentially lower your home insurance costs.
For example, adding smart home technologies or a home security system can lead to a discount. buying your auto and home insurance from the same company, called a bundle, can also get a discount.
Related: The cheapest home insurance companies in 2022
Average home insurance rates were calculated using data from Quadrant Information Services. rates are based on a policy with $300,000 homeowners coverage and $100,000 liability coverage.