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Unlike with physical objects like a refrigerator or a car, it can be difficult to pinpoint the cost of homeowners insurance. Apart from taking the time to ask all your friends, family, and neighbors what they pay in premiums, it's hard to know if the quote you've received is outrageous or a steal.
Fortunately, there's a lot of data available to help you set realistic expectations for your homeowners insurance cost. This article will look at how much the average homeowner is paying in homeowners insurance premiums, the factors that affect your specific policy, and ways you can save.
The average annual premium in the United States in 2021 was $1,272, according to the most recent data from the Insurance Information Institute.
But, each home's costs for insurance vary widely based on a variety of factors, including your home's value.
Here's how much homeowners insurance costs on average by home value in the United States, according to the most recent release of the Homeowners Insurance Report by the National Association of Insurance Commissioners (NAIC):
| Estimated Home Value | Average annual premiums for an HO-3 Policy |
| $49,999 and under | $648 |
| $50,000 to $74,999 | $757 |
| $75,000 to $99,999 | $826 |
| $100,000 to $124,999 | $882 |
| $125,000 to $149,999 | $930 |
| $150,000 to $174,999 | $975 |
| $175,000 to $199,999 | $1,012 |
| $200,000 to $299,999 | $1,113 |
| $300,000 to $399,999 | $1,278 |
| $400,000 to $499,999 | $1,492 |
| $500,000 and above | $2,168 |
*The above table uses data from the NAIC.
Where you live will also impact your cost of homeowners insurance. If you live in an area with high real estate values, this also means that it would cost more to replace your home if it were destroyed. So the NAIC says that average premiums tend to be higher in densely populated areas.
Second, your potential exposure to catastrophe plays a significant role in what you pay for homeowner's insurance. If you live in an area that's prone to floods, earthquakes, or tornadoes, you can expect to pay more than someone who lives in an area with less risk of experiencing a natural disaster.
Here's the average annual homeowners insurance premium by state, according to 2019 data from the Insurance Information Institute.
| State | Average Annual Premium |
| Alabama | $1,463 |
| Alaska | $962 |
| Arizona | $850 |
| Arkansas | $1,456 |
| California | $1,177 |
| Colorado | $1,618 |
| Connecticut | $1,153 |
| Delaware | $908 |
| District of Columbia | $1,275 |
| Florida | $1,988 |
| Georgia | $1,362 |
| Hawaii | $1,182 |
| Idaho | $799 |
| Illinois | $1,054 |
| Indiana | $983 |
| Iowa | $913 |
| Kansas | $1,519 |
| Kentucky | $1,172 |
| Louisiana | $2,037 |
| Maine | $936 |
| Maryland | $1,212 |
| Massachusetts | $1,617 |
| Michigan | $999 |
| Minnesota | $1,433 |
| Mississippi | $1,622 |
| Missouri | $1,299 |
| Montana | $1,287 |
| Nebraska | $1,564 |
| Nevada | $791 |
| New Hampshire | $1,021 |
| New Jersey | $1,237 |
| New Mexico | $1,126 |
| New York | $1,357 |
| North Carolina | $1,193 |
| North Dakota | $1,236 |
| Ohio | $853 |
| Oklahoma | $2,000 |
| Oregon | $727 |
| Pennsylvania | $955 |
| Rhode Island | $1,731 |
| South Carolina | $1,303 |
| South Dakota | $1,218 |
| Tennessee | $1,259 |
| Texas | $1,982 |
| Utah | $743 |
| Vermont | $947 |
| Virginia | $1,080 |
| Washington | $908 |
| West Virginia | $968 |
| Wisconsin | $750 |
| Wyoming | $1,244 |
*The above table uses data from the Insurance Information Institute
Here are the states where annual homeowners insurance premiums are least affordable, on average, according to Insurance Information Institute.
| State | Average Annual Premium |
| Louisiana | $2,037 |
| Oklahoma | $2,000 |
| Florida | $1,988 |
| Texas | $1,982 |
| Rhode Island | $1,731 |
| Mississippi | $1,622 |
| Colorado | $1,618 |
| Massachusetts | $1,617 |
| Nebraska | $1,564 |
| Connecticut | $1,531 |
*The above table uses data from the Insurance Information Institute
Here are the states where annual homeowners insurance premiums are most affordable, on average, according to the Insurance Information Institute.
| State | Average Annual Premium |
| Oregon | $727 |
| Utah | $743 |
| Wisconsin | $750 |
| Nevada | $791 |
| Idaho | $799 |
| Arizona | $850 |
| Ohio | $853 |
| Delaware | $908 |
| Washington | $908 |
| Iowa | $913 |
*The above table uses data from the Insurance Information Institute
Homeowners insurance covers your dwelling, personal property, offers liability protection, and covers you for additional living expenses if your home becomes inhabitable due to damage. While homeowners insurance is not required by law, your mortgage lender may require you to have it.
Your home's value and location are two of the most significant variables that affect homeowners insurance prices. However, a few other factors can drive your premiums up or down.
Coverage levels
The type of coverage you choose will impact the price you pay for homeowners insurance. Cash value coverage is typically the most affordable. With this type of coverage, your insurance company will only pay what your property is worth minus depreciation, not what it would cost to replace your home and its belongings.
For more protection, you can choose replacement cost coverage instead. With this type of policy, your insurer will pay out what it would cost to repair or rebuild your home in today's dollars.
For example, if a tree fell through your house and destroyed your couch, a replacement cost policy would pay whatever it costs to replace the couch. But a cash value policy would only pay what the couch is worth today. And if the couch is several years old, its value could be much less than what you originally paid.
You can expect to pay more for replacement cost coverage, but it may be worth it to protect yourself against coverage gaps caused by depreciation.
Other variables that affect your homeowners insurance:
Add features to make your home safer: If you're looking for ways to reduce your homeowners insurance premiums, think about ways you could improve the safety of your home. Adding any of the following safety features to your home could qualify you for a homeowners insurance discount:
Bundle your insurance policies: You may also be able to save on homeowners insurance by bundling your home and auto insurance policies together.
Raise your deductible: Finally, raising your deductible could reduce your premiums. But make sure that you don't set a premium that's higher than you'd be able to pay without going into debt. And know that if you have a mortgage on your home, your lender may require that your deductible stays below a certain limit.
Shop around: The last variable that can impact the price you pay for home insurance is the company you choose. Premiums can vary widely by insurance company. So one of the best ways to save on homeowners insurance could be simply to make sure that you shop around before choosing an insurance provider.
Aim to get at least three to five quotes before choosing a home insurer. Or, to save time, you could use an online homeowners insurance shopping tool like Policygenius to compare dozens of insurance companies at once.
