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Home insurance is usually required if you take out a loan to finance your house and still recommended even if you don’t have a mortgage. The home’s location, age, construction type and other factors determine the cost of homeowners insurance. MoneyGeek created a comprehensive study providing average rates on home insurance coverage to take the guesswork and sticker shock out of the equation. Determine the type of coverage you need and how to find the best price for home insurance so you can shop with confidence.

Key Takeaways

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According to MoneyGeek’s study, the average home insurance cost in the United States is $1,979 annually, or $175 per month..

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The home’s location, the home’s value and the level of insurance coverage purchased are the biggest factors determining your annual home insurance cost.

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Making your home more secure, updating the appliances and raising your deductible are a few ways you can save on the cost of home insurance.

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Average Cost of Home Insurance by Dwelling Coverage Amount

Dwelling coverage is one of the most important coverages you can have in your home insurance policy. If you have a claim with structural damage, the home insurance company will pay to rebuild or replace the home. Through the data collected for the study, MoneyGeek found the average home insurance policy for $250,000 dwelling coverage in 2020 has an annual premium of $1,979, or $165 per month (plus installment fees set by the insurance carrier).

Average Cost of Home Insurance
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How Much Will Home Insurance Cost You?

Home insurance cost varies widely throughout the country and even throughout each state. Many different factors determine the annual cost of home insurance, including:

  • Location (state and ZIP code)
  • Dwelling coverage amount
  • Personal property amount
  • Other structures on the property (shed, barn, pool, fence, etc.)
  • Claims history (both personal and at the home’s address)
  • Add-ons or endorsements
  • Deductible amount

MoneyGeek’s study determined the average national cost of dwelling coverage to be $2,103 annually or $175 per month, based on a combination of each state's average dwelling coverage. Each state has a different average amount, so your state could be well below or above the national rate.

Comparing personalized insurance quotes from different companies based on the home’s location, household information and home insurance coverage needs is the best way to know how much you’ll need to pay.

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Home Insurance Calculator

State

Florida

Dwelling Coverage

$250,000

Deductible

$500

Liability

$300,000

Personal Property

$150,000

Credit Score

Excellent
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on average

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Your home's location, it's amenities, and other factors impact pricing.

Average Cost of Home Insurance by State

The location of your home is a big factor in determining the cost of home insurance. The average cost of home insurance varies by state and city. In MoneyGeek's study, Delaware has the cheapest dwelling coverage premium with an average annual cost of $717, or $59.75 per month, for a baseline coverage amount of $250,000. Meanwhile, Tennessee has the highest price point at $3,466 annually, or $288.84 per month.

Average Home Insurance Rates by State
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Average Cost of Home Insurance by Deductible Amount

A home insurance deductible is the amount you will pay toward a covered claim. For example, if you have a home deductible of $1,000 and a covered claim of $10,000, you're responsible for $1,000 and the insurer will pay the remaining $9,000.

When choosing a home insurance deductible, the higher the deductible, the less you will pay in annual premiums. A higher deductible means the insurance company pays less per claim, and it discourages insureds from filing lower-value claims. These factors add up to premium savings for the homeowner.

However, be sure you can afford to pay the deductible amount at any time in case you have to file a claim. It’s nice to save on premiums with a $2,500 deductible, but not if you aren’t able to pay the first $2,500 if your home is damaged.

Review the table below to see examples of how your premiums will increase as your deductible decreases.

Average Home Insurance Cost by Deductible
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What Factors Have the Most Impact on Your Home Insurance Cost?

Insurance companies save money by mitigating risk. The riskier it is to insure a home, the more the insurance policy costs. Some factors — like the home’s age and claims history — matter more than others when determining pricing. Here are some of the criteria insurers use to determine the price of a policy:

  • Coverage Type: Replacement cost on the dwelling and contents is more expensive than actual cash value, but it’s worth it to not have to pay for depreciated value if you have a claim.
  • Home Location: The home’s location matters. The more dense the population and the higher the frequency of weather-related events, the more expensive the base rate will be for that area.
  • Dwelling Coverage Amount: One of the biggest factors is the dwelling coverage amount. The more value your home has, the more expensive it will be to repair or rebuild, and the more you will pay in home insurance cost.
  • Personal Property Coverage: The basic home insurance policy automatically provides 70–75% of the dwelling coverage as personal property coverage. This is built into the cost but can be increased independently if needed. Personal property coverage is the most significant factor in renters insurance costs, much like dwelling coverage is for home insurance.
  • Deductible Amount: The higher the deductible, the lower the premium cost, but the more you have to pay out of pocket if you file a claim. Check deductible options to see if the premium savings is worth the higher deductible amount.
  • Age of Home: The older the home is, the more likely it is you’ll file a claim, and the more expensive the payout will be for repairs or replacement. Updating the roof, heating and cooling sources, electrical and plumbing could lower the home insurance costs on an older dwelling.
  • Credit Score: Most states allow insurers to use your credit history when determining your home insurance premium. The only states that don’t are California, Maryland and Massachusetts.
  • Frequency of Claims: The more claims you file, the higher the cost for home insurance. Claims typically stay “chargeable” for 3–5 years and follow you from company to company and house to house. Be smart about filing claims, avoid filing inexpensive claims and mitigate damage before a weather event is forecast to keep your claims frequency as low as possible.
  • Other factors: These factors are less impactful but are still used to determine your rate: roof type and age, pool, aggressive pets, security systems and proximity to the nearest fire department.
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FAQs About the Cost of Home Insurance

Many factors impact the cost of home insurance. Most are specific to the home, while some are based on your personal information and claims history. Here are answers to the most common questions asked about the cost of home insurance.


What is the average annual cost of home insurance?This is an icon

According to data collected in MoneyGeek's study, the average annual cost of home insurance is $2,103. This average is calculated using the average of state-specific baseline dwelling coverage premiums. Rates vary based on your home's value, location and other factors.

What is the average monthly cost of home insurance?This is an icon

Using the same data, the average monthly cost of home insurance is $175. You may be able to make monthly payments through an escrow, meaning you submit one payment to your lender that includes both your mortgage cost, homeowners insurance cost and other fees. Your monthly payments depend on many factors, so your costs may be higher or lower than the national average.

How much will home insurance cost you?This is an icon

There are many factors (location, claims history, home coverage needs, etc.) used to determine how much you will pay for home insurance coverage. To get an idea of what you can expect to pay, you can use MoneyGeek’s estimator tool or request personalized quotes from insurance companies.

What factors impact home insurance costs?This is an icon

The home’s location and coverage needs are the two biggest factors that impact home insurance costs. The home’s construction type, age and building materials — along with your personal factors like credit score — also determine how much you pay for your policy.

Expert Insight on Affordable Homeowners Insurance

MoneyGeek teamed up with experts to get insight on how consumers can find affordable home insurance with the right coverages. These experts offer tips and advice for purchasing home insurance on a new home or comparing quotes on your existing home.

  1. What are your top tips for saving on the cost of homeowners insurance?

    Improving your credit score is a good first tip to secure a better homeowners insurance policy. If you have a couple of small debts you can pay down and eliminate, do so before you apply. You'll also want to invest in updating outdated systems that may make your home less desirable to insure. Old plumbing is a risk, and so are potential fire hazards and a weakened structure that may make the home more susceptible to environmental damage.

    One way to lower your insurance premiums is by opting for a higher deductible. This will keep your monthly costs low but will require a larger investment when a claim is filed. Get multiple quotes from a variety of carriers, and make sure you are comparing apples to apples. Get quotes which include the bundling of auto and homeowners policies, and price each policy out on its own. Sometimes, you will find that buying a windstorm policy separately will be more cost-effective. Other times, it is better to get all your policies as a bundle deal.

    Re-estimate the value of your property’s replacement cost when shopping for insurance. Find a carrier that offers the most discounts for items that you qualify for. Sign up for autopay and go paperless to avoid additional incremental costs.

  2. How does the home’s construction type impact insurance or other costs?

    Insurance companies do what they can to minimize risk. If your home isn't up to current code standards, you'll find your rates are much higher. This can even come down to the materials used to build your home.

    Insurance premiums are composed of a number of factors. The durability of the materials and structure of the home are all taken into consideration when an insurance quote is issued because they have different risk factors. You will typically pay more in insurance for a wood-frame home than masonry construction.

    Masonry construction — a home built with concrete blocks, stone or brick — will get you a discount on your insurance premiums. Masonry units are non-combustible, have the longest lifespan and withstand severe weather the best, relative to other construction types.

  3. What steps can homeowners take to lower their insurance costs?

    You may want to bundle home and auto insurance, as you can usually get a better rate on both that way. Raising your deductible is another way to lower your monthly premium.

    Make sure your agent is shopping your rates every year. They should be bringing you an itemized comparison chart, which includes costs and available discounts through those particular carriers.

    Most insurance carriers also offer discounts to homeowners who upgrade their homes and take preventative measures to safeguard their property. You may get discounts for activating and monitoring your burglar and fire alarm, installing deadbolt locks on exterior doors, installing smoke detectors and upgrading electrical, plumbing and roofing.


Jake Hill
Jake HillCEO of DebtHammer
Marissa Sweet
Marissa SweetCommercial Property and Casualty Insurance Consultant at PropertyCashin.com
Phil Hearn
Phil HearnStrategic Business Consultant at Real Estate Bees

About the Author


Mandy Sleight is a writer for MoneyGeek and has been an insurance agent since 2005. As a freelance writer, she uses her vast knowledge of the insurance industry to create informative, engaging and easy-to-understand content for consumers. Her work has been featured in Market Watch, Kiplinger and other major publications.

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