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Cost of Homeowners Insurance By State (2024 Homeowners Insurance Guide)

Last updated 07/12/2024 by

Benjamin Locke

Edited by

Summary:
Homeowners insurance costs differ widely based on state-specific factors such as local regulations and natural disaster risks. States with severe weather events tend to have higher insurance premiums, while those with milder conditions enjoy lower costs.
Homeowners insurance is a type of policy that provides financial protection for your home and belongings in case of damage or loss. It typically covers events like fire, theft, and certain natural disasters, as well as liability for accidents that occur on your property. This insurance helps ensure you can repair or replace your home and possessions if unexpected events occur.

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How does homeowners insurance cost vary by state?

The states with the highest average homeowners insurance costs include Oklahoma, Kansas, Nebraska, Florida, and Colorado, primarily due to the high risk of severe weather events such as tornadoes, hurricanes, and wildfires. Conversely, states like Hawaii, New Hampshire, Vermont, Maine, and Delaware have lower insurance costs due to their milder weather conditions and lower risk of natural disasters.

Expert Insight

If you are in a coastal state, or in a high risk zone, you will definitely pay more money. In some cases you can be nonrenewed by your current carrier and be forced to pay as much as a 300% increase in coverage costs to meet the obligation of your mortgage agreement. The increased risk pushes the market into a limited selection of insurers willing to offer coverage, often through the non-admitted insurance market, which includes coverage offered by insurance companies through wholesale brokers who are not licensed in that state.” – Christopher Giuditta, VP and Senior Advisor of World Private Client Group.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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Is homeowners insurance always necessary?

Homeowners insurance is not always legally required, but it is often necessary and highly recommended. If you have a mortgage, your lender will likely require you to carry homeowners insurance to protect its investment in your property. Even if you own your home outright, having insurance is crucial to protect yourself from financial loss due to damage from natural disasters, theft, or liability for accidents that occur on your property. Without homeowners insurance, you would be responsible for all repair or replacement costs out of pocket, which can be financially devastating.​

States with the lowest average homeowners insurance costs

StateAverage Annual Premium
Hawaii$613
New Hampshire$1,221
Vermont$1,263
Maine$1,391
Delaware$1,384
The states with the lowest average homeowners insurance costs include Hawaii, New Hampshire, Vermont, Maine, and Delaware. Hawaii’s low insurance rates, averaging $613 annually, are attributed to the relatively low incidence of natural disasters like hurricanes and tropical storms, the mild climate that avoids extreme weather conditions, and well-designed homes that mitigate risks such as flooding and wind damage. New Hampshire, Vermont, Maine, and Delaware also benefit from fewer severe weather events and lower risks of natural disasters, contributing to their lower insurance premiums. These states tend to have milder climates and fewer claims, resulting in less costly insurance coverage.

States with the highest average homeowners insurance costs

StateAverage Annual Premium
Oklahoma$5,858
Kansas$4,843
Nebraska$4,800
Florida$4,419
Colorado$4,099
The states with the highest average homeowners insurance costs include Oklahoma, Kansas, Nebraska, Florida, and Colorado. Oklahoma has the highest average premium at $5,858 annually due to the high frequency of severe storms, including tornadoes and hail, which significantly increase the risk for insurers. Kansas and Nebraska face similar challenges with tornadoes and severe weather, leading to high insurance costs. Florida’s high premiums, averaging $4,419 annually, are driven by the frequent occurrence of hurricanes and tropical storms, which cause extensive property damage. Colorado’s high insurance costs, averaging $4,099 annually, are influenced by the risk of wildfires and other natural disasters, making it one of the more expensive states for homeowners insurance.

Determinants of homeowners insurance costs

The cost of homeowners insurance is influenced by several factors. Insurance companies consider the following aspects when determining premiums:
You should consider adjusting your homeowners insurance when there are significant changes in your life or property, such as a major renovation, purchasing high-value items, or moving to a new location with different risk factors. Additionally, regularly reviewing your policy to ensure it provides adequate coverage for your current needs can help you avoid being underinsured or overpaying for unnecessary coverage.
Items that might affect your home insurance premium.
CriteriaConsiderationImpact on Insurance Decision
LocationEvaluate the risk of natural disasters in your areaHigher risk areas lead to higher premiums
Home ValueEnsure your coverage matches the replacement cost of your homeInadequate coverage can leave you underinsured
Coverage AmountDecide on coverage limits and deductiblesHigher coverage and lower deductibles increase premiums
Credit ScoreCheck your credit score regularlyHigher scores can secure lower premiums
Claims HistoryMaintain a low frequency of claimsFrequent claims can raise your premiums
Each state has its own set of regulations and laws regarding insurance, which can vary greatly. These regulations can impact how much coverage is required for certain types of properties or how much an insurer can charge for premiums. Also, the competitiveness of the insurance market in a particular state can also affect pricing as insurers may offer lower rates to attract customers. I would say, it’s important for homeowners to understand their state’s regulations and shop around for the best rates. – Eleanor Campbell, Realtor working with Contractor Bond

Insurance Policies and Their Average Costs

Homeowners insurance costs vary widely depending on the type of coverage and the state you live in. Basic policies like HO-1 offer limited protection and are less expensive, averaging around $1,000 annually, while more comprehensive policies like HO-5 provide extensive coverage and can cost about $2,000 per year. Factors such as location, home value, and specific coverage needs significantly influence these costs.

HO-1: Basic Form

HO-1 policies offer minimal coverage and protect against a limited number of perils, such as fire, lightning, windstorms, hail, and vandalism. They do not cover personal property, liability, or additional living expenses. The national average cost of HO-1 policies is approximately $1,000 annually.

HO-2: Broad Form

HO-2 policies cover more perils than HO-1, including additional risks like falling objects, weight of ice and snow, and water damage from household systems. They cover both the dwelling and personal property on a named-perils basis. The average annual cost for HO-2 policies is about $1,200.

HO-3: Special Form

The HO-3 policy is the most common type of homeowners insurance. It covers the dwelling on an open-peril basis, meaning all risks are covered unless specifically excluded, while personal property is covered on a named-peril basis. The average cost of HO-3 policies is around $1,754 per year.

HO-4: Renters Insurance

HO-4, or tenant’s insurance, provides coverage for personal belongings and liability for individuals renting an apartment or house. It does not cover the physical structure of the rental property. The average annual cost for HO-4 policies is about $174.

HO-5: Comprehensive Form

HO-5 policies offer the broadest coverage, insuring both the dwelling and personal property on an open-peril basis, covering all risks unless explicitly excluded. These policies typically provide higher coverage limits and are suitable for high-value homes. The national average cost for HO-5 policies is approximately $2,000 annually.

HO-6: Condo Insurance

HO-6, or condo insurance, is designed for condominium owners. It covers the interior structure of the condo, personal property, and liability, working in conjunction with the condo association’s master policy that covers the exterior and common areas. The average annual cost for HO-6 policies is around $300.

HO-7: Mobile Home Form

HO-7 policies are similar to HO-3 but designed specifically for mobile or manufactured homes. They cover the home on an open-peril basis and personal property on a named-peril basis. The average cost for HO-7 policies is approximately $1,200 per year.

HO-8: Modified Coverage Form

HO-8 policies are intended for older or historic homes where the replacement cost far exceeds the home’s market value. They provide coverage on a named-peril basis and often insure the dwelling at actual cash value rather than replacement cost. The national average cost for HO-8 policies is about $1,600 annually.

Ways to lower your homeowners insurance costs

Improve your credit score

Enhancing your credit score can lead to better insurance terms and lower premiums. Regularly monitoring your credit report and addressing any discrepancies can help improve your score. Pay off outstanding debts, avoid new credit inquiries, and make timely payments on all your bills to gradually raise your credit score. Over time, a higher credit score can open up access to more competitive insurance offers and lower premiums, ultimately reducing the total cost of your homeowners insurance.

Shop around

Comparing offers from multiple insurance companies can help you find the best rates. Utilize online comparison tools and seek quotes from various insurers to identify the most favorable terms. Different companies may offer varying rates and policy conditions, so it’s essential to explore all available options. Don’t settle for the first offer you receive; instead, take the time to negotiate with insurers and leverage competing offers to secure the best possible deal on your homeowners insurance.

Choose a higher deductible

Opting for a higher deductible can reduce your premiums. While higher deductibles mean you will pay more out of pocket in the event of a claim, they can significantly decrease the amount of your monthly or annual premium. This strategy can be particularly beneficial if you have the financial flexibility to handle higher deductibles and aim to minimize long-term premium expenses.

Consider bundling policies

Bundling your homeowners insurance with other policies, such as auto or life insurance, can lead to discounts. Many insurance companies offer multi-policy discounts to encourage customers to consolidate their insurance needs with one provider. This can simplify your insurance management and provide cost savings on your overall insurance expenses.

Pro Tip

“In my opinion, the best way for homeowners to lower their insurance premiums is by taking preventive measures to protect their home. Installing security systems, smoke detectors, and fire extinguishers can significantly reduce the risk of damage or loss and ultimately decrease insurance costs. They can also consider bundling their homeowners insurance with other policies like auto insurance to get a discounted rate.” – Jonathan Faccone, Managing Member of Halo Homebuyers

Maintain a claims-free history

Avoiding frequent claims can help keep your premiums lower. Insurance companies often provide discounts to policyholders who have not made claims over a certain period. By maintaining your home well and addressing minor issues out-of-pocket, you can reduce the likelihood of making claims and benefit from lower insurance costs.
Jon Sanborn, Co-founder of Brotherly Love Real Estate, shares some tips on taking advantage of lesser-known effective ways to help homeowners reduce their insurance:
  • Increasing the deductible: If your deductible is $1,000, the consumer could save around 14% by increasing it to $2,500.
  • Making the property more secure: Examples include sprinklers, burglar alarms, etc.
  • Account for home improvements: You may be eligible for a homeowners insurance discount when considering home improvements.
  • Build your credit score: Your credit score could have a substantial impact on your homeowners insurance. Someone with a poor credit score would pay more for insurance.

FAQ

Does homeowners insurance cover natural disasters?

Homeowners insurance typically covers damage from natural disasters like windstorms, hail, and fire. However, standard policies usually do not cover flood or earthquake damage, which require separate policies or endorsements, so it’s important to evaluate your specific risks and consider additional coverage if necessary.

Can I get discounts on my homeowners insurance?

Yes, many insurers offer discounts for various reasons, such as having a security system, bundling multiple policies, being claims-free, or making home improvements that reduce risk. It’s advisable to ask your insurer about all available discounts to maximize your savings.

How often should I review my homeowners insurance policy?

It’s recommended to review your homeowners insurance policy annually or whenever significant changes occur in your life or property, such as renovations, purchasing valuable items, or moving to a new location. Regular reviews ensure that your coverage remains adequate and up-to-date with your current needs.

What should I do if my homeowners insurance claim is denied?

If your claim is denied, review your policy and the denial letter to understand the reasons. You can appeal the decision with your insurer, provide additional information, or seek help from your state’s insurance department or a legal advisor to potentially overturn the denial.

Does homeowners insurance cover home-based businesses?

Standard homeowners insurance policies typically do not cover business-related liabilities or losses. If you run a business from your home, you may need to purchase additional coverage, such as a home-based business endorsement or a separate business insurance policy to protect your business assets and activities adequately.

Key takeaways

  • Homeowners insurance costs vary significantly across different states, influenced by local regulations, natural disaster risks, and market competition.
  • States with higher insurance costs often face greater risks from severe weather events like hurricanes, tornadoes, and wildfires.
  • States with lower insurance costs benefit from milder weather conditions and fewer claims, resulting in more affordable premiums.
  • Different types of homeowners insurance policies offer varying levels of coverage, with basic policies like HO-1 being the least expensive and comprehensive policies like HO-5 providing extensive coverage at a higher cost.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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