Homeowners Insurance Facts and Statistics

The Insurance Information Institute found 88% of homeowners had an active insurance policy in 2023, with 32% reporting weather-related impacts in the past five years. But premiums have risen nearly 8% from 2020 to 2021, per the National Association of Insurance Commissioners.

Claims increased too, with 5% of insured homes filing in 2022 and the average claim cost hitting $18,311, the highest in five years. Property damage remains the top reason for claims, with wind and hail as leading causes.

Buying homeowners insurance covers your most valuable asset, even when it's not legally required. Understanding homeowners insurance statistics shows how valuable coverage is for homeowners.

Homeowners insurance losses are measured in two ways: the average number of claims filed per 100 policies (claim frequency) and the average amount paid for each claim (claim severity). In 2022, 5% of insured homes filed a claim, up from 2021 but below the five-year average of 6% from 2018 to 2022.

Claim severity increased to $18,311 in 2022, up from $16,801 in 2021. This figure exceeded the five-year average claim severity of $15,749. When claim costs and frequency rise, homeowners pay higher premiums as insurers adjust rates to cover increased losses.

Source: Insurance Information Institute

Property damage was the most common cause of homeowners insurance claims in 2022, accounting for 98% of all losses. Wind and hail were the leading causes at 41% of property damage claims. Water damage and freezing were 28%, while fire and lightning were 22%. Theft and other types of property damage were minimal.

Liability claims for bodily injury and property damage to others were far less common at only 2% of total losses. Medical payments and other minor claim categories accounted for the rest.

Source: Insurance Information Institute

Property damage claims cost more than the combined expenses of all liability claims. Fire and lightning are the most expensive, averaging $83,991 per claim. Liability claims involving credit card fraud and other property damage average $34,183 per claim. Bodily injury and property damage claims average about $31,690. Water, wind and hail damage and medical payments have lower average costs but still create substantial expenses. Theft claims are the least costly, averaging $5,024 per claim.

Source: Insurance Information Institute

Homeowners pick from several types of home insurance policies, called "forms." Eight primary policy types exist, with the right one depending on your home's structure and desired coverage level. HO-1, HO-2, HO-3, HO-5 and HO-8 policies cover single-family homes and other housing units. The HO-4 policy (renters insurance) and HO-6 policy (condo/co-op insurance) serve tenants and condo owners.

HO-3 policies ("special forms") accounted for 78% of owner-occupied homeowners insurance in 2021. HO-3 policies provide comprehensive home coverage at lower costs than other policy types.

HO-5 policies represented 13% with broader coverage at higher prices. HO-2 policies were 7%, HO-1 was 2% and HO-8 policies were less than 1%.

Among renters and condo owners, 75% carry HO-4 policies while 25% hold HO-6 coverage. HO-4 policies protect tenants' personal property and liability without covering structural damage, which is the landlord's responsibility. HO-6 policies cover personal belongings plus resident-owned unit components like interior walls and fixtures.

The average cost of homeowners insurance varies widely by state based on natural disaster frequency, crime rates and other local risks. The national average is $1,411. Florida has the highest average annual premium at $2,437, while Wisconsin has the lowest at $780.

Source: Insurance Information Institute

Some states have higher homeowners insurance rates than others because location affects premiums. The age of the area, proximity to other buildings, availability of fire services, crime rates and government regulations all affect premium costs. Higher claim risk in your area means higher premiums.

In some states, homeowners insurance is more affordable because claim rates are lower. Reduced crime rates and minimal natural disaster risk lead to lower premiums.

Direct premiums earned show the total amount policyholders paid for homeowners insurance. State Farm led the homeowners insurance market in 2023, writing $27 billion in direct premiums and holding an 18% market share. Allstate and Liberty Mutual wrote $13.6 billion and $10.5 billion in direct premiums, respectively. These companies, along with USAA and Farmers Insurance, are the top five providers.

Market share matters when you select a homeowners insurance provider. Larger companies provide more benefits and convenience, while smaller providers have lower premiums. A company's financial health shows its reliability and ability to pay claims. The table below includes market share and statistics for major homeowners insurance companies.

Check these frequently asked questions about homeowners insurance statistics and policy details:

Homeowners insurance involves more than statistics. These resources provide additional information:

1. Best Homeowners Insurance Companies: Compare the top providers for homeowners insurance and what makes them rank high.
2. Compare Home Insurance Quotes: Compare quotes to get the best value and coverage for your home insurance needs.
3. FAQ About Homeowners Insurance: Common questions about homeowners insurance.
4. Home Insurance Calculator: Estimate your potential home insurance costs based on various factors.
5. How Much Home Insurance Coverage Do You Need to Protect Your Home?: Find out how much coverage is best for you and your home.
6. How to Buy Homeowners Insurance: Everything You Need to Know: Learn the basics to get the home coverage you need.
7. Standard Homeowners Insurance Coverages Explained: Learn about the different types of homeowners insurance coverages, what each includes and how they protect you.
8. Cheapest Home Insurance Companies: Find affordable homeowners insurance options without compromising on coverage.
9. Understanding Homeowners Insurance Coverage A, B, C, D, E and F: The different parts of homeowners insurance policies and what they cover.
10. What Does Homeowners Insurance Cover?: Learn about the incidents and perils covered under a homeowners insurance policy.