When you own a home, homeowners insurance is part of the deal. It helps to protect the biggest asset most people have in their lifetime. But it’s also expensive. How do you know if you’re overpaying on insurance premiums? How much should homeowners insurance cost you?
In this article, we’ll teach you how much you should expect to pay for homeowners insurance. Plus, find out how to lower your insurance premiums, and how to find the best value on cost, coverage, and service.
What is the average cost of homeowners insurance?
National average homeowners insurance premium
The latest data on homeowners insurance in the United States (from 2016) shows that the annual premium sits at an average of $1,192 per year. That’s about $99 per month.
This is a 32% increase from 10 years prior when homeowners insurance averaged at $822 per year — about $66 per month.
Average homeowners insurance premium by state
The average annual premiums by state range from $659 up to $1,967. See the average premiums ranked by state below.
| Rank | State | Average premium | Rank | State | Average premium |
|---|
| 1 | Louisiana | $1,967 | 27 | Kentucky | $1,085 |
| 2 | Texas (3) | $1,937 | 28 | Illinois | $1,042 |
| 3 | Florida | $1,918 | 29 | Hawaii | $1,026 |
| 4 | Oklahoma | $1,875 | 30 | Maryland | $1,022 |
| 5 | Kansas | $1,548 | 31 | Indiana | $1,003 |
| 6 | Mississippi | $1,525 | 32 | California (4) | $1,000 |
| 7 | Rhode Island | $1,496 | 32 | New Mexico | $996 |
| 8 | Connecticut | $1,455 | 32 | Alaska | $974 |
| 9 | Massachusetts | $1,451 | 35 | Virginia | $966 |
| 10 | Colorado | $1,446 | 36 | New Hampshire | $965 |
| 11 | Nebraska | $1,402 | 37 | Michigan | $952 |
| 12 | Alabama | $1,386 | 38 | Iowa | $945 |
| 13 | Arkansas | $1,348 | 39 | Pennsylvania | $927 |
| 14 | Minnesota | $1,340 | 40 | West Virginia | $917 |
| 15 | New York | $1,309 | 41 | Vermont | $898 |
| 16 | South Carolina | $1,285 | 42 | Maine | $866 |
| 17 | Missouri | $1,280 | 43 | Ohio | $850 |
| 18 | North Dakota | $1,239 | 44 | Washington | $822 |
| 19 | District Of Columbia | $1,225 | 45 | Delaware | $816 |
| 20 | Georgia | $1,200 | 46 | Arizona | $803 |
| 21 | Tennessee | $1,185 | 47 | Wisconsin | $762 |
| 21 | New Jersey | $1,174 | 48 | Nevada | $742 |
| 23 | Montana | $1,130 | 49 | Idaho | $703 |
| 24 | South Dakota | $1,125 | 50 | Utah | $664 |
| 25 | Wyoming | $1,120 | 51 | Oregon | $659 |
| 26 | North Carolina | $1,098 | Overall | United States | $1,192 |
2020 average homeowners insurance premium projection
The latest data on average homeowners insurance premiums is not available yet for 2020. However, over the past decade, homeowners insurance premiums rose by about 4% every year. Given that, we can infer that the average cost for annual premiums in 2020 is around $1,389.
What factors might increase your premium?
Is your premium higher than average? Here are some reasons why that may be the case.
- Excess coverage: The amount of coverage you select has the largest impact on the price of your policy. If you have more coverage than you need, you’ll pay for it in your premiums.
- Past claims: Each homeowners insurance claim that you file increases the risk you present to your insurer. As a result, your premium will rise if you have frequent claims.
- Older homes: Insurers see older homes as higher-risk, so older homes typically have higher premiums.
- Disaster-prone location: The rate and severity of natural disasters in your area affect your insurance premiums. If your region is prone to hurricanes or wildfires, your premium will be higher than those of homes without those risks.
- Poor credit score: Insurance companies can consider your credit score when assessing your risk level and setting the price of your premiums. The lower your score, the more risk you present.
- Flammable materials: If your home is built from flammable materials, like wood, your premium will be higher. Accordingly, a concrete or brick home will yield lower premiums.
- Poor condition: If your home is behind on maintenance, it’s more likely to have problems which could lead to insurance claims. Insurers inspect homes to determine if they have undergone proper upkeep.
- Low deductibles: Lower deductibles lower your out-of-pocket costs when you have to file a claim. But they also drive insurance premiums up.
While some of these factors aren’t avoidable (short of moving to a new home), there are steps you can take to lower your homeowners insurance costs.
How can you save on your homeowners insurance premium?
Here are a few ways that you can try to lower your homeowners insurance premium.
Analyze your dwelling coverage limit
Dwelling coverage pays out if your home needs repair or replacement. It is the largest factor in determining your insurance rates.
You should have enough coverage to rebuild your home and any attached structures in full. However, anything beyond that is needlessly costly.
Consider getting an annual inspection to estimate the cost of repairing or replacing your home. This way, you can ensure that your level of dwelling coverage is suitable.
Review your personal liability coverage limit
Personal liability coverage protects you when someone sues you for damages to themselves or their property. Most policies start at $100,000. Analyze the risk/benefit of your coverage amount to decide if you can reduce your limits.
For example, if you frequently host events on your property, or if you have a shooting range in your backyard, you may need more coverage. But if you rarely have guests over, $100,000 may be excessive.
Vet your personal belongings coverage limit
You can also cut costs by reducing your coverage limit on your personal belongings. Of course, make sure that you are covered as needed. But if you assess the net value of your possessions and find that it is less than your coverage limit, it’s time to cut back.
Increase your deductible
Increasing your deductible is a quick and easy way to lower your premium. Ask your insurer about the deductible options and how they will impact your premium cost.
But of course, remember that this will mean higher out-of-pocket costs if you do have to file a claim. Don’t raise your deductible so much that you can no longer afford it in a moment of crisis.
Look for home insurance discounts
Different insurers offer different discounts. Find out if there are any discounts you can use to reduce your costs.
Shop around with other insurers
Once you’ve optimized your homeowners insurance premium, shop around to see if you can find a better deal elsewhere. Every carrier has its own method of evaluating policyholders and calculating premiums, so you may be able to save more with a different company.
Compare insurance carriers below:
Frequently asked questions about homeowners insurance
How much does homeowners insurance cost in Texas, on average?
According to the latest data, homeowners insurance in Texas costs an average of $1,937 per year and $161 per month. Texas has one of the highest average premiums of all the states, second only to Louisiana.
How much does homeowners insurance cost in Florida, on average?
The average cost of homeowners insurance in Florida is $1,918 per year and $160 per month. That’s the third-highest premium in the country.
What is the average cost of homeowners insurance Chicago?
The average cost of homeowners insurance in Illinois is $1,042 per year and $87 per month. But because Chicago is a more expensive area, the average is significantly higher in the city — around $1,300.
Find the best homeowners insurance for your needs
Are you in search of homeowners insurance for the first time? Or maybe you already have a policy, but you’re not sure if you’re getting the best deal.
We have you covered. Easily compare homeowners insurance carriers side-by-side below. Read in-depth reviews and get input from actual past customers to find the best company for your needs.
