Homeowner Insurance Statistics

Next to auto and life insurance, home insurance is one of the most sought-after insurance policies — and for good reason. Home insurance financially protects your home and assets in the instance of damage or loss, which happens more often than you think. About 1 in 20 insured homeowners file a claim each year, whether it’s related to fire and lightning, water damage or theft.

Purchasing home insurance can ensure that your most expensive asset is covered, even if it’s not legally required. By understanding home insurance statistics, you can learn how valuable coverage can be for any homeowner.

As a homeowner, you can select from several types of insurance policies, also known as "forms." There are eight primary policy types; what you need will depend on your home's structure and the level of coverage you want.

The HO-3 home insurance policy, which offers a broad range of coverage, is the most common form of home insurance. It covers almost any peril, save for any losses specifically stated as excluded from coverage by the insurer. Conversely, HO-1 has the most basic coverage, only offering protection against 11 perils. There is also an HO-4 policy, or renters insurance, along with an HO-6 home insurance policy or condo/co-op insurance.

^{Source: National Assocation of Insurance Commissioners}

^{Source: National Assocation of Insurance Commissioners}

Note that an HO-4 policy is designed for renters, while an HO-6 policy is for condos and co-ops. These types of policies are typically lumped together, with 77.86% opting for an HO-4 policy over an HO-6 policy. The rest (HO-1, HO-2, HO-3, HO-5 and HO-8) are meant for single-family homes and other housing units.

Home insurance claims statistics provide insight into the frequency and severity of claims in different parts of the country. While frequency entails how often it happens, the severity outlines the monetary losses. Understanding both can underscore the importance of having a policy.

For example, 5.1% or 1 in 20 insured homes make a claim each year — for varying reasons. 97.2% of claims are due to property damage, such as wind and hail, theft and more, while 2.8% are due to liability, such as medical payments and property damage. Learn more about claims statistics in the table below.

^{Source: Insurance Information Institute}

^{*Claims per 100 house years.}

The table shows that between 2015 and 2019, the majority of claims were made because of bodily injury and property damage.

Throughout the years, rates of common claim reasons have differed; knowing the most common reasons can help you prepare for and adjust your policy limits accordingly. For instance, in 2017, 41% of claims were due to wind and hail, up by 18.5% from 2015. On the other hand, claims regarding bodily injury, which was 3.7% in 2015, went down slowly over the years and stood at 2.4% in 2019.

Discover some of the most common claim causes over a five-year period in the table below.

^{Source: Insurance Information Institute}

Not all home insurance claims are expensive: Some are more severe and costly than others. For example, property damage claims cost more than liability claims, and specific occurrences damage property more often than others. The table below showcases which claims cost insurers the most.

^{Source: Insurance Information Institute}

Generally, property damage losses cost more than all liability claims combined, with fire and lightning costing the most. This illustrates the importance of getting ample dwelling coverage in your insurance policy.

However, in terms of liability claims, bodily injury and property damage cost the highest.

Thanks to numerous external factors, the average cost of home insurance varies by state. This can include the number of thefts in your neighborhood, the likelihood of floods or earthquakes and more. Case in point, the average cost of home insurance in Massachusetts for $500,000 in dwelling coverage is $2,864 per year, while in Hawaii, it costs an average of $764 for the same coverage. Discover your state’s average homeowners insurance costs in the map below.

Certain states have more expensive home insurance rates than others, as location is a key factor in determining premiums. This includes how old the area is, how close your home is to other buildings, what type of fire services are nearby, crime rates, government regulations and more. The higher the perceived claim risk is in your area, the higher your premiums will be.

Below are the top five states with the most expensive home insurance premiums.

In some states, home insurance is more affordable. This is because the likelihood of filing a claim in that area is lower. For instance, there may be a lower crime rate or risk of natural disasters compared to other areas.

The states with the most affordable home insurance premiums are detailed below.

The market share of an insurer is a crucial factor to consider when selecting the best home insurance provider. Larger companies tend to have better benefits and convenience, while smaller companies may have lower premiums. Reviewing their financial health can also grant you insight into how reliable the company is and how well they can support your claim. Learn more about home insurance companies by examining their market share and other statistics in the table below.

^{Source: National Association of Insurance Commissions}

Direct premiums earned stand for the total amount policyholders paid for home insurance, while direct loss to direct premium ratio identifies the proportion of direct premiums used to pay for claims. The higher the direct premium earned, the more policies that provider has, which can indicate their reliability and popularity. A low ratio also means that fewer claims are being made.

Given the data above, State Farm is the largest home insurer by market share in the U.S., holding 17.97% of the market and having earned premiums upwards of $18 billion.

To better understand homeowners insurance statistics and what a policy entails, review the frequently asked questions (FAQs) below.

Understanding home insurance, how it works and why you need it is more than just the statistics. Learn more about home insurance in the resources below.

• What Is Dwelling Coverage and How Much Do You Need to Protect Your Home?: As part of homeowners insurance, dwelling coverage protects the home's structure in case of damage caused by a covered peril. Find out what dwelling coverage is and how to find the amount of coverage that's right for you.
• How Much Home Insurance Coverage Do You Need to Protect Your Home?: Having home insurance covers you in many ways, but it’s especially important to find a policy that covers the cost of rebuilding your home and insures your possessions so that they are fully protected. Find out how much coverage is best for you and your home.
• HO-3 Home Insurance Policy: What You Need to Know: HO-3 home insurance is designed to protect your home and valuables in case of a disaster. Learn more about it and whether this type of home insurance is a good fit for your needs.
• How to Buy Homeowners Insurance: Everything You Need to Know: A homeowner's insurance policy is a necessity, not a luxury. When buying homeowners insurance, it’s important to understand the basics to ensure you get the coverage you need.
• A Guide for How to Switch Home Insurance Companies: Homeowners often wait for their policies to expire before switching home insurance providers. However, you can switch companies anytime. Learn how and when to navigate the process successfully.