June 18, 2019

Average Homeowners Insurance by State

Read more about Home Insurance

The average homeowner pays $1,192 for homeowner's insurance, but the cost varies by state. How does your state stack up? Read on for the answers.

Several factors affect homeowner's insurance premiums. Some state insurance departments regulate what insurers can charge. Others cost more because of the state's location, whether it's close to a body of water, or prone to hurricanes, for example.

In general, homeowner's insurance rates vary based on:

  • Construction costs in the area
  • Age of the home
  • Past claims
  • Risk factors you pose as an individual

Below are the average insurance rates for a standard HO-3 policy for each state:

StateAverage Insurance Rates/yr.
Alabama$1,386
Alaska$974
Arizona$803
Arkansas$1,348
California$1,000
Colorado$1,446
Connecticut$1,455
Delaware$816
District of Columbia$1,225
Florida$1,918
Georgia$1,200
Hawaii$1,026
Idaho$703
Illinois$1,042
Indiana$1,003
Iowa$945
Kansas$1,548
Kentucky$1,085
Louisiana$1,967
Maine$866
Maryland$1,022
Massachusetts$1,451
Michigan$952
Minnesota$1,340
Mississippi$1,525
Missouri$1,280
Montana$1,130
Nebraska$1,402
Nevada$742
New Hampshire$965
New Jersey$1,174
New Mexico$996
New York$1,309
North Carolina$1,098
North Dakota$1,239
Ohio$850
Oklahoma$1,875
Oregon$659
Pennsylvania$927
Rhode Island$1,496
South Carolina$1,285
South Dakota$1,125
Tennessee$1,185
Texas$1,937
Utah$664
Vermont$898
Virginia$966
Washington$822
West Virginia$917
Wisconsin$762
Wyoming$1,120

A Closer Look at Homeowner's Insurance Premiums

  1. How much should you be paying for homeowner's insurance?
    In general, you can expect to pay approximately $3.50 per $1,000 of your home's value. That means a $200,000 home would cost an average of $700 around the country.

  2. How often does homeowner's insurance increase?
    Homeowner's insurance rates tend to increase each year due to circumstances such as:

    • Increased Construction Costs
      If the cost to rebuild your home increased, your insurance company will raise your rates to cover the cost should you make a claim.

    • An Increase in Claims
      If you or even your neighbors filed a lot of claims over the last year, the insurance company may think you are an increased risk and increase premiums accordingly.

    • A Lower Credit Score
      Some states allow insurance companies to use your credit score to determine your premiums. If your credit score dropped due to financial issues, you may see your premiums increase.

    • An Aging Home
      As your home ages, it may require more work. It may also become a higher risk for insurance agencies. For example, as your roof ages, the risk of a claim increases, which may increase your premiums.

    • Home Improvements
      Whether you put an addition on your home, added a swimming pool, or got a new dog, you likely added to the risks you pose to the insurance company. The result? Higher premiums.

    • The Insurance Company has Financial Issues
      Sometimes companies need to increase premiums across the board because of a particularly rough year.

  3. Do homeowner's insurance premiums increase after a claim?
    One claim could cause a 9% increase on average in your homeowner's insurance premiums. In fact, 37 out of the 50 states have an average increase of 10% or more after just one claim. Others, like Texas, don't have any increase in their premiums with a claim.

    About 1 in 20 homes have a claim each year

  4. Does the type of claim you make affect your homeowner's insurance premium?
    Yes. A liability claim has the highest effect on your premium, with an average 14% increase in premiums. A wind claim, though, may only cause an average 6% increase and a medical claim only a 2% increase.

  5. Can you insure your home for more than it's worth?
    You may be able to insure your home for more than it's worth, but that doesn't mean you'll receive the full amount in the face of a total loss. Insurance companies base your payment on the cost to rebuild your home and whether you chose actual cost coverage or replacement cost coverage.

    If you insure your home for $350,000, but it only costs $300,000 to rebuild, the maximum amount an insurance company would pay is $300,000.

  6. What should you look for when buying homeowner's insurance?
    You need homeowner's insurance, especially if you have a mortgage (it's required). Consider the following factors:

    • Deductible
      The higher the deductible you take, the lower your premiums become. Just make sure it's one that you could afford should you face a total loss.

    • Coverage
      Read the fine print of the policy and/or ask detailed questions of your agent. You may be surprised to learn what is and isn't covered.

    • Guaranteed Replacement Cost
      If the value of your homeowner's insurance doesn't cover the cost to rebuild your home at the time of loss, the difference becomes your responsibility unless you have this feature.

    • Personal Property Coverage
      Make sure you know that dollar amount and inquire about any special provisions or riders you may need to add to account for your valuables.

  7. Do you pay for homeowner's insurance at closing?
    Typically, mortgage companies require you to have one year of homeowner's insurance paid up front. This could mean paying for it before or at the closing—it's typically up to you.

    If you do pay outside of the closing, make sure to get a paid receipt and have proof of where you obtained the funds to pay for the premium.

  8. Can you pay for homeowner's insurance yourself (outside of escrow)?
    Many mortgage companies require you to have your homeowner's insurance and real estate taxes in escrow. This means that the mortgage company handles the payments for you while you pay towards the account on a monthly basis.

    The mortgage company will determine the monthly cost of your insurance based on the annual premium. You pay 1/12th of the full premium each month.

    If you want to pay the insurance yourself, you may ask the lender. Typically this is only approved when you owe less than 80% of the home's value.

    Many lenders charge a fee of 0.25% of your loan amount in exchange for waiving escrow, which could negate the benefit of paying the premium yourself.

Choosing the Right Amount of Homeowner's Insurance

  1. How much homeowner's insurance should you carry?
    The amount you need depends on:

    • The cost to rebuild your home
    • The age of your home
    • The amount/value of your personal belongings

    You should also determine how much liability coverage you want. The minimum amount many insurance companies offer is $100,000. But experts suggest that you carry between $300,000 and $500,000.

  2. Do you have to insure your home for replacement cost?
    Replacement cost coverage provides enough to rebuild your home to its original state before the disaster, no matter the cost. But you aren't required to pay for replacement cost coverage.

  3. What is actual cost coverage?
    Actual cash value coverage means that the insurance company will only cover the market value of the home, which takes into consideration depreciation or market conditions. If construction costs increased or the price of materials increased, you could find yourself financially liable for the difference.

  4. What is the 80% rule in homeowner's insurance?
    Insurance companies require you to carry an insurance policy that covers at least 80% of what the insurance company thinks it would take to rebuild your home. If you have 80% coverage, you'll receive full coverage up to your policy limit.

    What is Personal Property in Homeowner's Insurance?
    Your homeowner's insurance policy itself covers the structure of your home. Personal property insurance covers the items inside your home. A few examples include furniture, clothing, and jewelry.

  5. How much personal property coverage should you get for homeowner's insurance?
    Ask your homeowner's insurance agent how much personal property coverage comes with the standard policy. From there, take an inventory of your personal belongings and their estimated value.

    If your items are worth more than the value of your insurance, you may want to pay for a separate rider to cover your more expensive items.

  6. How much homeowner's insurance does a lender require?
    Lenders require you to have enough homeowner's insurance to cover the amount of your mortgage. If you have a $200,000 mortgage, you need at least $200,000 in homeowner's insurance.

Finding the Right Homeowner's Insurance (and Cost)

  1. Can you get homeowner's insurance after being dropped?
    You can get insurance after being dropped, but it may take some legwork. Each state requires insurance companies to provide you with ample notice of insurance cancellation. They must also provide you with a reason.

    If dropped, you may have to shop around with several lenders or pay elevated premiums to get a new policy. Enlist the help of your state's insurance agency to find a policy after cancellation.

  2. Is it worth making a claim on your homeowner's insurance?
    Start by looking at the cost of your deductible. Does the cost of the damage greatly exceed your deductible? Is the potential 9% or greater increase in your premiums worth it? Have you filed claims before?

    If so, you may want to ask about your risk of the insurance company canceling your insurance before filing the claim.

  3. How many homeowners' insurance claims are too many?
    Each insurance company has a maximum number of claims they'll allow before they drop a client. Some insurance agents state that two claims within a 3-year period is reason enough to cancel a policy.

  4. How can you lower your homeowner's insurance cost?
    Here are ways to keep your premiums down:

    • Take a Higher Deductible
      If you can afford a high deductible, take it. You'll lower your premiums and enjoy the savings unless a disaster occurs.

    • Bundle Your Policies
      If you have other insurance needs, such as automobile insurance, try securing the policies from the same agency in order to get a bundle discount.

    • Install Security Systems
      A fire alarm, smoke detector, or home security system may save you as much as 5% on your insurance premium. You may save as much as 20% if you install a sprinkler system inside the home.

    • Increase Your Credit Score
      If you live in a state that allows insurance companies to use your credit score to determine your insurance rating, keep your credit score high.

Bottom Line

Homeowner's insurance is a necessary cost. But with averages around $1,100, it's not a small one. Find the policy that covers what you need while giving you the premium that you can afford.

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