Average Cost of Homeowners Insurance in 2023
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By , Finance Writer & Licensed Insurance Agent
While home insurance costs an average of $2,614 per year, these rates can change depending on your home, location, coverage levels and more. By understanding how rates can change, you can make informed decisions about your policy — from choosing your coverage level to deciding on a deductible.
MoneyGeek conducted a comprehensive study providing average rates on home insurance coverage to take the guesswork out of finding the right coverage for you.
Table of Contents
- What Is The Average Cost of Home Insurance?
- Average Cost of Home Insurance by Dwelling Coverage
- Average Cost of Home Insurance by Deductible
- Average Cost of Home Insurance by Company
- Average Cost of Home Insurance by Location
- Average Cost of Home Insurance by Credit Score
- Average Cost of Home Insurance by Home’s Age and Construction
- Factors Affecting Home Insurance Costs
Key Takeaways
According to MoneyGeek’s study, the average home insurance cost in the United States is $2,614 annually or $218 monthly.
The home’s location, value and level of insurance coverage purchased are the most significant factors determining your annual home insurance cost.
Making your home more secure, updating the appliances and raising your deductible are a few ways to save on the cost of home insurance.
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What Is The Average Cost of Home Insurance?
Home insurance rates average $2,614 per year for a policy with $250,000 in dwelling coverage, $125,000 in personal property coverage and $125,000 in personal liability coverage. However, changing your coverage level or provider or living in a hazard-prone state can change the average.
Take a look at how rates can change by dwelling coverage and which provider offers the cheapest policies below.
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Average Cost of Home Insurance by Dwelling Coverage
Home insurance costs depend highly on your dwelling coverage, which pays to rebuild or replace your home in case of structural damage due to a covered event. The average cost of a typical home insurance policy with $250,000 in dwelling coverage in 2023 is $2,614 per year or $218 per month. However, if you bump your limits to $500,000, the average cost is $4,373 per year — a difference of $1,759 for double the coverage.
Choosing the right dwelling coverage is essential for you as a homeowner. While going for the lowest coverage to save on premiums might be tempting, this choice can be risky. If disaster were to strike, insufficient coverage could leave you grappling with hefty out-of-pocket expenses to repair or rebuild your home. It's a delicate balance: underinsuring might cost you dearly when you least expect it while overinsuring means paying more than you should. By insuring your home adequately, you're not just protecting your property but also securing your financial future.
Average Cost of Home Insurance by Deductible
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.
Review the table below to see examples of how your premiums will increase as your deductible decreases based on your desired coverage level.
Generally, the average cost of home insurance also changes based on your 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.
Average Cost of Home Insurance by Company
Average home insurance rates can vary by company, too, as insurers weigh factors differently. For instance, MoneyGeek found that the cheapest major home insurance company, State Farm, charges an average of $158 monthly. In contrast, the most expensive, Travelers, charges a monthly average of $476 — a difference of $318 a month. By comparing home insurance quotes before purchasing a policy, you can save hundreds per year.
Use the table below to see how rates can change by provider and coverage.
When selecting an insurer, remember it's not just about the price. The best homeowners insurance providers often balance cost and excellent service. While going for the cheapest option might be tempting, shopping around can lead to significant savings without sacrificing quality service.
Average Cost of Home Insurance by Location
Where you live is a significant factor in your home insurance rates. Insurers consider your location because regions prone to natural disasters, higher crime rates or elevated construction costs can pose greater financial risks to the company. For instance, in Florida, the average cost of home insurance is $5,055 per year, while in Delaware, it’s $761 — a whopping difference of $4,294 every year.
Use the map below to find out the average cost of home insurance in your state, or see the table below to see how rates can change by dwelling coverage.
Top 10 Most Affordable States in the Country
Your location can significantly influence your home insurance rates, with some areas benefiting from lower premiums because of reduced crime, fewer natural disasters and a robust local community. Take, for instance, ZIP code 96819 in Hawaii, where homeowners pay an average of $420 per year — about $2,194 less than the national average.
Explore the 10 most affordable home insurance ZIP codes for policies with $250,000 in dwelling coverage using the table below.
Top 10 Most Expensive States in the Country
Certain areas experience higher home insurance premiums because of regular severe weather occurrences, increasing crime and dense populations. For instance, Florida tops the list, with premiums exceeding the national average by $4,643 annually.
The following table provides a detailed look at the 10 states with the highest insurance costs for $250,000 in dwelling coverage.
Average Cost of Home Insurance by City
Home insurance rates often fluctuate based on the city you reside in. As with state-level risk factors, each city presents its unique set of hazards, from weather patterns to crime rates. For instance, a city prone to hurricanes might have higher premiums than one with milder weather, even if they’re in the same state. Similarly, cities with bustling urban centers might have elevated rates due to increased risks of theft or vandalism.
Explore the table below to see how rates can change in your city and state.
Average Cost of Home Insurance by Zip Code
Aside from your state and city, your ZIP code and its unique challenges also affect the average cost of homeowners insurance. Take Ohio, for instance: ZIP code 44135 averages $1,853 yearly, while ZIP code 43604 is priced at $2,517, marking a $664 difference in the same state.
Dive into the following table to see average home insurance rates by ZIP code, tailored for your state, with specified coverage limits and a $1,000 deductible.
Average Cost of Home Insurance by Credit Score
Your credit score can significantly influence the average cost of your home insurance. For instance, having a good credit score could save you an average of $4,437 per year. Insurers often view a higher credit score as an indicator of financial responsibility, suggesting fewer claims in the future. Conversely, a lower score might lead to elevated premiums. However, the government prohibits states from using credit scores to determine rates in states like California, Hawaii and Massachusetts.
If you live in a state where insurers use credit scores to determine your rates, use the table below to see the average cost of home insurance based on your credit score and desired dwelling coverage.
Average Cost of Home Insurance by Home’s Age
The age of your home directly impacts your home insurance costs — case in point, $250,000 in dwelling coverage for a house built in 2023 costs $1,319 per year, while the same policy for a home built in 2000 costs an average of $2,614 annually. Older homes might have outdated electrical, plumbing or heating systems, posing higher risks for issues or damages. Additionally, previous years' materials and construction methods might not meet today's safety standards. Consequently, insuring an older home can be costlier, as insurers anticipate potential claims stemming from age-related wear and tear or outdated infrastructure.
On the flip side, newer homes often benefit from modern construction techniques, safer materials and up-to-date systems. These homes are typically more energy-efficient and built to current safety codes, leading to fewer insurance claims. As a result, homeowners of newer properties might enjoy lower insurance premiums, as insurers perceive their homes as less risky.
Explore the table below to see how rates can change depending on what year your home was built and your desired dwelling coverage.
Average Cost of Home Insurance by Roof and Construction Type
Your home's roof and construction type hold significant sway over your insurance premiums. A robust, well-maintained roof, especially made of durable materials like metal or slate, can offer better protection against elements like rain or hail, leading to potential discounts. Conversely, roofs needing repair or made of less resilient materials might elevate rates.
The construction type matters as well. Homes built with fire-resistant materials, such as brick or stone, often attract lower premiums than those constructed with wood, which is more flammable. Insurers assess these factors to gauge the potential risk and repair costs they might shoulder.
Explore the table below to see how rates can change depending on your roof type, construction type and desired dwelling coverage.
Factors Affecting Home Insurance Costs
Home insurance rates change because of the inherent risks of insuring a property. Insurance companies prioritize saving money by mitigating these risks. The riskier it is to insure a home, the more the insurance policy costs. Understanding these risk factors can empower homeowners to make informed decisions about their coverage.
Factor | Description |
|---|---|
Dwelling Coverage Limit | Dwelling coverage, which is what pays to rebuild or repair your home after a covered event, is one of the biggest factors that determine premiums. The more it costs to rebuild your home, the more you will pay in home insurance costs. |
Personal Property Coverage Limit | Personal property coverage also shapes the cost of your premiums. This coverage offers protection for your belongings in the event of certain incidents. Standard home insurance policies automatically assign 70–75% of your dwelling coverage as your personal property limits, but you can increase it independently if needed. |
Coverage Type | There are two types of coverage: replacement cost (RCV) and actual cash value (ACV). ACV covers the item's cost minus depreciation, while RCV pays to replace the item with a new one of similar quality and value. Getting RCV on your dwelling and personal property coverage is more expensive, but it’s worth it as it ensures you receive the full cost to replace or repair items without accounting for depreciation, providing greater financial protection in the event of a loss. |
Deductible Amount | Regarding home insurance, your deductible is the amount you'll pay out-of-pocket for a claim before coverage takes effect. 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 are 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 and systems like heating, cooling, electrical and plumbing could lower the home insurance costs on an older dwelling. |
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. |
Roof Type | Your roof type plays a pivotal role in home insurance because it determines how well your home is protected against elements like rain, hail, and wind. A durable roof can lead to lower premiums, as it presents less risk to insurers. Conversely, older or less resilient roofs might increase your rates. |
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 to keep your claims frequency as low as possible. |
Other Factors | These factors are less impactful but are still used to determine your rate: pool, aggressive pets, security systems and proximity to the nearest fire department. |
Frequently Asked Questions 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 about the cost of home insurance.
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.
- What are your top tips for saving on the cost of homeowners insurance?
- How does the home’s construction type impact insurance or other costs?
- What steps can homeowners take to lower their insurance costs?
Lead Financial Planner/Partner at The Center for Financial Planning, Inc.
Agency Owner with American Family Insurance
President, Petschauer Insurance
Principal
Founder and CEO at Vertical Ascent Wealth Management
Managing Member, Founder of Horizon Financial Planning LLC
Trial Attorney, Simeone & Miller, LLP
Wealth Advisor, CFP® at Pitzl Financial
Director of Property & Casualty at Stonebridge Insurance & Wealth Management
CFP® at The Center for Financial Planning
Wealth Manager & Director of Financial Planning at CI - BDF Private Wealth
Partner, Financial Planner CFP®, AIF at VLP Financial Advisors
Director of Financial Planning, CFP®, EA, at Hopwood Financial Services
Financial Advisor CFP ®, AIF®, CSLP at VLP Financial Advisors
Commercial Property and Casualty Insurance Consultant at PropertyCashin.com
Financial Planner – MBA, CFP®, CRPC®
Personal Finance and Travel Expert at MoneyWeHave.com
Financial Advisor at Berman McAleer
Financial Planner at Arnold & Mote Wealth Management
Visiting Assistant Professor of Finance, Mendoza College of Business, University of Notre Dame
Assistant Professor of Marketing at Texas A&M University - Corpus Christi
President of Towerpoint Wealth
CEO and Certified Financial Planner at Tobias Financial Advisors
Wealth Advisor at Heron Wealth
CFP® Professional
Certified Financial Planner
Financial Advisor & Insurance Specialist at Offit Advisors
Founder of Beyond Profit and Wealth Consulting
Money Coach
CFP®, RLP®; CEO & Co-Founder of Mana Financial Life Design
Certified Financial Planning Prof (CFP), and CAIA (Chartered Alternative Investment Analyst)
Strategic Business Consultant at Real Estate Bees
CEO of DebtHammer
Property and Casualty Licensed Florida Agent at Eagle Insurance Group
About Mandy Sleight, Licensed Insurance Agent
sources
- Insurance Information Institute. "What determines the price of an auto insurance policy?." Accessed September 20, 2023.