How Much Does Homeowners Insurance Cost?
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If you are using a mortgage loan to finance the purchase of a new home, you’ll need to invest in a homeowners’ insurance policy. That’s because mortgage lenders require homebuyers to take out a property insurance policy before they approve them for a home loan.
Why? Homeowners’ insurance can protect you if your home is damaged or destroyed by wind, lightning, fire, vandalism, or other disasters. Property insurance policies also pay out if burglars break into your home and steal your most valuable possessions, such as jewelry, electronics, and fine art.
And if someone is injured on your property? Your homeowners' insurance policy will pay out to cover any medical costs for which you are deemed liable.
Mortgage lenders believe you are less likely to walk away from your home and stop making your mortgage payments if a property insurance policy protects your residence. If your homeowners’ policy covers your rebuilding or repair costs after a fire, for instance, you are more likely to continue making your mortgage payments because you plan on moving back into your home when it is livable again.
While homeowners’ insurance is required if you are taking out a mortgage, you should invest in such a policy even if you pay for your home with cash. It’s a bit like paying for an auto insurance policy: You hope you never need a home insurance policy, but having the financial safety net should your home require expensive repairs is nice.
But how much should you expect to pay in homeowners insurance premiums? That depends on various variables, from your home’s square footage, location, age, and type to the coverage you request. And are you used to paying renters insurance? Know that homeowners’ insurance is a more expensive form of protection.
Here’s a closer look at the average cost of homeowners insurance nationwide and what you can expect to pay to cover your home.
In this article
What does homeowners’ insurance cover?
You’re ready to invest in a homeowners’ insurance policy. But what will your policy cover? There are two main types of coverage: coverage provided by standard insurance policies and optional coverages that you can add depending on where you live and what dangers your home might face.
Standard coverages
Most basic homeowners’ insurance policies offer the following coverages:
Dwelling coverage. The HO-3 is the standard homeowners' insurance policy. The most important part of this policy is dwelling coverage. This coverage pays out to repair, replace, or rebuild your home in case of property damage or destruction by a covered incident. This usually includes damage caused by fire, vandalism, theft, lightning, wind, and hail. This coverage will typically pay out, too, if a falling tree branch punches a hole in your roof.
Personal property coverage. This coverage pays out if something inside your home is damaged or stolen. If someone breaks into your home and steals your jewelry, artwork, electronics, or clothing, personal property insurance will pay to replace these items. This coverage will also cover your heating and cooling systems, kitchen appliances, and furniture if they are damaged. This coverage can also help cover the damage caused when pipes suddenly burst and flood your basement. Just be aware that standard homeowners’ insurance policies don’t cover water damage that results from negligence or a gradual seepage over several years.
Personal liability protection. Personal liability coverage provides financial protection if someone is injured while on your property. If you are sued, this coverage will reimburse you for medical payments and legal fees. Say a friend trips and falls down your front steps, breaking his leg. If that friend sues you for medical expenses, your personal liability protection will pay for these costs.
Loss-of-use coverage. If your home is destroyed by a fire, lightning strike, or other covered disaster, loss-of-use coverage will pay for your living expenses while your home is rebuilt or repaired. These expenses can include the cost of hotel stays and meals at restaurants.
Optional coverages
You can also add to your homeowners’ insurance coverage by investing in optional coverages for an extra price. These can include:
Flood insurance. If your home is in a federally designated floodplain, you must pay for flood insurance from the National Flood Insurance Program or a private insurer. This coverage pays out for damages caused to your home and its contents from a flood. You can also add flood insurance as a rider or addition to a standard property insurance policy, even if you don’t live in a flood plain.
Sewer backup. A sewer and water backup policy covers you from water that backs up from sewers or drains or an overflowing sump pump. This coverage will help cover the costs of replacing damaged carpeting, floorboards, furniture, and other items. It will also help pay for sewer lines or sump pump repairs. If you don’t add this optional coverage, your standard homeowners’ insurance policy won’t cover damages from sewage backup.
Scheduled personal property. You might own especially expensive items such as artwork or jewelry. You can pay for extra personal property coverage to cover these specific items.
Earthquake insurance. If you live in an area that often sees earthquakes, you can purchase an add-on or separate policy that covers damages caused by these natural disasters.
Hurricane or windstorm coverage. You can purchase hurricane coverage or windstorm coverage to offer extra protection if your home suffers damage from high winds.
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Factors that influence how much you pay for homeowners’ insurance
Several factors help determine how much you’ll pay for homeowners’ insurance. These include:
Your deductible
Your deductible is the amount you must pay out of pocket before your insurance coverage kicks in. Say you have a deductible of $500. If a fire causes $6,000 of damage to your home, you’ll first pay $500. Your insurance company will then cover the remaining $5,500. The higher your deductible, the lower your insurance premium will be. Just ensure you can afford to cover your deductible if something happens to your home.
Age of your home
The older your home, the more you’ll generally pay for homeowners’ insurance. That’s because homes with older systems tend to suffer more covered losses. For instance, an older electrical system is more likely to cause a fire.
Your home’s location
You’ll pay a higher insurance premium if your home sits in an area that is more prone to serious weather damage or has more home break-ins. That’s because you are more likely to file a claim.
Your credit history
In some states, insurers can use your credit-based insurance score when setting your policy premium. If you have good credit, you will generally pay a lower premium. Note that a credit-based insurance score is not the same as the credit score your mortgage lender looks at when you are applying for a home loan.
Home security systems
You’ll typically receive a discount on your premium if you’ve installed a home security system, fire alarms, and smoke alarms. You might also receive a discount if you’ve invested in hail-resistant roofing.
You’re a non-smoker
Your insurance provider might offer a discount if you don’t smoke. That’s because non-smokers are less likely to accidentally start a house fire.
Your claims history
If you have a history of filing several home insurance claims, your insurer will likely charge you a higher premium. That’s because your insurer believes you will file more claims in the future, making you a riskier customer.
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Average cost of homeowners’ insurance by state
How much you pay for homeowners' insurance often varies depending on where you live. Here is a list from Insurance.com of the average home insurance cost in 2024 on a $200,000 home in all 50 states and Washington, D.C.
State | Average yearly homeowners’ insurance premium on a $200,000 home |
Alaska | $1,355 |
Alabama | $2,391 |
Arkansas | $3,328 |
Arizona | $1,906 |
California | $1,043 |
Colorado | $3,169 |
Connecticut | $1,750 |
Washington D.C. | $984 |
Delaware | $1,760 |
Hawaii | $461 |
Iowa | $2,022 |
Idaho | $1,476 |
Illinois | $2,423 |
Indiana | $2,313 |
Kansas | $3,638 |
Kentucky | $2,486 |
Louisiana | $2,822 |
Massachusetts | $1,303 |
Maryland | $1,318 |
Maine | $1,021 |
Michigan | $1,825 |
Minnesota | $1,828 |
Missouri | $2,638 |
Mississippi | $2,646 |
Montana | $2,523 |
North Carolina | $2,141 |
North Dakota | $2,431 |
Nebraska | $3,807 |
New Hampshire | $948 |
New Jersey | $1,171 |
New Mexico | $1,829 |
Nevada | $1,093 |
New York | $1,340 |
Ohio | $1,805 |
Oklahoma | $4,442 |
Oregon | $1,347 |
Pennsylvania | $1,475 |
Rhode Island | $1,505 |
South Carolina | $2,061 |
South Dakota | $2,607 |
Tennessee | $2,369 |
Texas | $2,951 |
Utah | $1,416 |
Virginia | $1,645 |
Vermont | $974 |
Washington | $1,260 |
Wisconsin | $1,274 |
West Virginia | $1,465 |
Wyoming | $1,351 |
Why do millions of Americans trust LendingTree?
- 300+top-rated lenders
- $260Bin funded loans
- 111M Americans served
How to save on homeowners’ insurance
Don’t want to overpay on homeowners’ insurance? There are steps you can take to lower your annual premium.
Safety and security features. Many insurers discount homeowners who install home security systems, sprinklers, and fire alarms. Why? Thieves are less likely to break into your home if a home security system protects it. If you have a sprinkler system and fire alarms, fire is less likely to destroy your property. Insurers are less likely to pay out claims for protected homes and will offer owners a discount.
Weather-resistant roofing. Some roofing materials are designed to withstand high winds and hail better. If you install this type of roofing, your insurer might provide you with a discount. Again, this is because you are less likely to file a claim for roof damage with these specialized products.
Bundling. Insurers typically discount homeowners if they take out more than one type of policy. Say you take out a homeowner, auto, and life insurance policy with the same company. That insurer might give you a discount on these policies’ premiums as a reward for giving it so much business.
Shopping around. Consider comparison shopping with several insurance providers. You might be surprised at the variety of quotes you receive. Some insurers might offer you deeper insurance discounts or charge you less for your desired coverage amounts.
Lower your coverage amounts. The lower your coverage amounts, the less you’ll pay for your property insurance. For instance, if you request $100,000 of coverage with the personal liability portion of your homeowners’ insurance, you’ll pay less than if you take out a policy with $300,000 of personal liability coverage.
Increase your deductible. You can lower your insurance premium by increasing your deductible. The higher your deductible, the lower your premium will be. Just be certain you can afford the out-of-pocket costs with a higher deductible.
Buy a newer home. Many insurers charge higher premiums for older homes. That’s because homes with older electrical, plumbing, heating, and cooling systems are more likely to experience problems that could result in a claim.
FAQs
How do I file a claim?
If your home is damaged or destroyed or someone steals the items inside your home, call your insurance provider. Explain what happened to start the claims process. Your insurer might ask that you include photos of your home’s damages or a list detailing the value of the items that were stolen.
What are exclusions?
Your homeowners’ insurance policy will list several exclusions, items that are not covered by your insurance policy. Common exclusions might include damage caused by flooding, mold, termites or rodent infestations.
What if my insurance company stops operating in my state?
An insurance provider might decide to stop offering homeowners’ insurance in your state. If that happens, you’ll need to find a new insurance carrier. Depending on your state, your insurance provider is required to give you written notice that it is canceling your insurance from 30 to 120 days before the cancellation.
Do homeowners’ insurance policies cover medical expenses resulting from dog bites?
Most homeowners’ insurance policies pay out if your dog bites someone and the bite victim needs medical treatment. The bite doesn’t even have to happen in your home. Your policy will cover the legal costs if someone sues you and the medical costs a person might need after suffering the dog bite.
The bottom line
If you are applying for a mortgage to finance the purchase of a home, your lender will require that you invest in a homeowners’ insurance policy. But even if this wasn’t required, you should take out such a policy if you own a home. Your policy is a financial safety net that protects you if your home is damaged or destroyed. It also protects you if someone is injured at your home or a thief breaks into your residence and steals your most valuable items.
To go without this protection? That opens you up to plenty of financial pain.
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Writer
Dan Rafter is a freelance writer who has more than 20 years experience covering personal finance. He's written for the Chicago Tribune, Washington Post, Bankrate, CreditCards.com, Rocket Mortgage, NortonLifeLock and several others.
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