Average Homeowners Insurance Costs by State
Updated: October 3, 2024
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Homeowners insurance costs by state can vary due to a number of factors, such as crime rates, construction costs and local climate risks. Understanding these factors is crucial for homeowners because it helps them anticipate potential insurance expenses and make informed decisions about coverage. Being aware of how these variables influence insurance costs enables you to budget effectively and seek out policies that provide adequate protection without overpaying.
The national average cost of home insurance stands at $1,413 annually, but rates can vary significantly by state due to factors like dwelling coverage, which is the cost to repay for your home’s structure, and location. For instance, Florida's average is $2,665, which is substantially higher than Maryland's average of $1,361, both of which differ greatly from the national average.
Understanding the average cost of home insurance in your state is essential. It serves as a valuable benchmark when comparing home insurance quotes, ensuring you are informed about what constitutes a fair price in your specific market. Take a look at the average homeowners insurance costs by state for $100,000 in dwelling coverage below.
| Alabama | Annual Premium $ 2,697 |
On average, homeowners insurance for $1M in dwelling coverage is $8,062 per year — but this can also vary by state. In Arizona, for instance, the same coverage costs $7,343 annually, while in Hawaii, the average is $1,858.
Expensive homes often need more dwelling coverage in home insurance due to several factors. These homes usually feature high-end materials, custom designs and unique architectural details, making reconstruction costs significantly higher. Take a look at the costs for expensive homes below and see how homeowners insurance costs vary by state.
| Alabama | Annual Premium $ 13,437 |
Homeowners insurance costs can vary significantly from one state to another due to differences in state regulations, geographical risks and local economic conditions, among others. Understanding these variables is essential for homeowners looking to obtain the best coverage at the most affordable rates. Here are some key factors that affect homeowners insurance costs by state:
Geographical Risks
States prone to natural disasters such as hurricanes, earthquakes, tornadoes or wildfires typically have higher insurance premiums.
State Regulations
Insurance regulations vary by state, affecting how insurance companies can set and adjust rates. Some states have more stringent regulatory environments, impacting overall homeowners insurance costs by state.
Crime Rates
Areas with higher crime rates, particularly those with high incidences of burglary or vandalism, may see increased insurance costs due to the elevated risk of property damage or loss, contributing to higher homeowners insurance costs by state.
Construction Costs
The cost to rebuild or repair a home can vary by state, influenced by local labor rates, material costs and building codes. Higher construction costs lead to higher homeowners insurance costs by state.
Local Climate
States with extreme weather conditions, such as heavy snowfall or frequent flooding, may have higher insurance costs to account for the increased risk of weather-related damage.
Economic Conditions
Local economic factors, including housing market trends and regional inflation rates, can influence insurance costs. In areas with higher property values and cost of living, insurance premiums tend to be higher.
Claim History
The frequency and severity of past insurance claims in a state can affect overall premium rates. States with a history of high claims may see increased costs to offset the risk, influencing homeowners insurance costs by state.
Home Characteristics
The age, size, and construction type of homes in a state can influence insurance rates. Older homes or those with unique construction features may be more expensive to insure.
Insurance Competition
The level of competition among insurance providers in a state can impact pricing. More competition can lead to lower rates, while less competition may result in higher premiums.
Coverage Levels
State-specific requirements for minimum coverage levels and optional coverage add-ons can affect overall costs. States mandating higher minimum coverage levels will generally have higher premiums.
While homeowners insurance costs can vary from state to state, you can get cheap homeowners insurance by comparing home insurance quotes between providers.
About Mark Fitzpatrick
Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.
Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.
