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 rose 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.

A homeowners insurance policy covers repair and rebuilding costs for your home, even when it's not legally required.

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. That's above the five-year average 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, accounting for 41% of all losses. 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 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. Credit card and other claims, a miscellaneous category covering items like credit card fraud, average $34,183 per claim. Bodily injury and property damage claims average $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 cover most perils at lower costs than broader 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 and 25% hold HO-6 coverage. HO-4 policies provide coverage for tenants' personal property and liability claims. This doesn't cover structural damage, which is the landlord's responsibility. HO-6 policies cover personal belongings and resident-owned unit components, such as interior walls and fixtures.

Homeowners insurance costs vary 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

Several factors drive premiums higher or lower across states, including the age of local structures, proximity to other buildings, fire service availability, crime rates and government regulations. States with frequent natural disasters or high crime rates have higher premiums, while states with low claim risk have the lowest rates.

State Farm led the homeowners insurance market in 2023 with $27 billion in direct premiums and an 18% market share. Allstate and Liberty Mutual are second and third with $13.6 billion and $10.5 billion, 

Market share is only one way to evaluate providers. Larger companies offer more coverage options and better digital tools, while smaller insurers are often cheaper for insurance. Financial strength is important because it means the insurer can pay your claim.

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

These resources provide more information:

1. Best Homeowners Insurance Companies: Compare the top providers for homeowners insurance and find out why they rank high.
2. Compare Home Insurance Quotes: Get the best value and coverage for your home insurance needs by looking at more than one quote.
3. FAQ About Homeowners Insurance: Common questions you might have.
4. Home Insurance Calculator: Estimate your potential home insurance costs.
5. How Much Home Insurance Coverage Do You Need to Protect Your Home?: Find out how much coverage suits your needs.
6. How to Buy Homeowners Insurance: Everything You Need to Know: Find out how to go about getting coverage.
7. Standard Homeowners Insurance Coverages: Learn about what each coverage includes.
8. Cheapest Home Insurance Companies: Find affordable homeowners insurance without compromising coverage.
9. Homeowners Insurance Coverage A, B, C, D, E and F: Gives you the various parts of homeowners insurance policies and what they cover.
10. What Does Homeowners Insurance Cover?: Learn what is covered under a homeowners insurance policy.