The average cost of home insurance is around $158 a month or $1,899 per year in 2022. But how much you pay will vary based on where you live, how old your home is, and other factors.
How much is homeowners insurance?
The average cost of homeowners insurance in the U.S. is $158 a month or $1,899 per year, according to our analysis of 2022 home insurance rates from across the country.
But home insurance costs are on the rise.
Our Home Insurance Pricing Report released in July 2022 found that home insurance costs are increasing nationwide, partially due to inflation, increased construction and labor costs, and a surge in natural disasters.
From May 2021 to May 2022, 90% of homeowners saw their home insurance costs go up — with the average increase costing an extra $134 per year.
Keep in mind that how much you pay for home insurance will vary widely based on where you live, how old your home is, how much it’d cost to rebuild it, and your claims history.
Continue reading to learn how different factors can impact how much your home insurance costs.
States with the biggest home insurance cost increases
According to our Home Insurance Pricing Report, home insurance is rising faster than inflation in many states throughout the U.S. Arkansas, Washington, and Colorado all saw over a 17% increase in home insurance costs from May 2021 to May 2022. [1]
Here are the top five states that saw the biggest percentage increase in home insurance rates from May 2021 to May 2022.
|
State |
Average original premium |
Average renewal premium |
Average premium increase |
Percentage increase |
|---|---|---|---|---|
|
Arkansas |
$1,235 |
$1,463 |
$228 |
18.5% |
|
Washington |
$739 |
$873 |
$134 |
18.1% |
|
Colorado |
$1,355 |
$1,593 |
$238 |
17.5% |
|
Texas |
$1,476 |
$1,713 |
$237 |
16% |
|
Oregon |
$528 |
$609 |
$81 |
15.4% |
Why are home insurance rates going up?
Home insurance rates are going up for a slew of reasons all related to the higher replacement cost of your home and your increased likelihood of filing a claim.
Remember that homeowners insurance is based on the amount it costs to rebuild your home from the ground up using similar materials.
As construction costs rise due to inflation and delayed shipments, replacement costs and in turn your home insurance rates follow suit. And let’s not forget the increase in devastating natural disasters has caused an increase in demand for materials and labor — creating the perfect storm for home insurance prices to skyrocket.
Average rates in top 10 cities most at risk of climate change
Florida, Texas, and Louisiana are just some of the states most vulnerable to climate change. And homeowners throughout these states are feeling the effects — not only in the increase in severe weather, but in the cost of home insurance.
Whether being battered by hurricanes, tornadoes, or excruciating heat, many cities that made our top 10 list of the Worst Cities for Climate Change are seeing home insurance rates as much as 89% higher than their state average.
|
City |
Average monthly cost |
Average annual cost |
Percentage difference from state average |
|---|---|---|---|
|
Houston, TX |
$262 |
$3,143 |
2% |
|
Miami, FL |
$417 |
$5,003 |
89% |
|
Tampa, FL |
$217 |
$2,606 |
-1% |
|
Jacksonville, FL |
$157 |
$1,884 |
-29% |
|
Orlando, FL |
$224 |
$2,683 |
2% |
|
New Orleans, LA |
$332 |
$3,983 |
47% |
|
Los Angeles, CA |
$168 |
$2,021 |
29% |
|
Memphis, TN |
$266 |
$3,191 |
26% |
|
Riverside, CA |
$138 |
$1,654 |
6% |
|
Virginia Beach, VA |
$204 |
$2,445 |
61% |
Average cost of home insurance by state
With home insurance costs on the rise for many homeowners across the country, here is what you can expect to pay in your state. Below are the average annual costs of home insurance by state for a home with a dwelling coverage limit of $300,000.
Hop tip: Click on each state name in the table below to find out more about the cost of home insurance where you live.
|
State |
Average monthly cost |
Average annual cost |
Percentage difference from national average |
|
$165 |
$1,982 |
4% |
|
|
$117 |
$1,398 |
-26% |
|
|
$147 |
$1,762 |
-7% |
|
|
$244 |
$2,924 |
54% |
|
|
$120 |
$1,436 |
-24% |
|
|
$206 |
$2,472 |
30% |
|
|
$113 |
$1,359 |
-28% |
|
|
$77 |
$928 |
-51% |
|
|
$96 |
$1,154 |
-39% |
Average home insurance cost by city
Now let’s take a closer look at the average cost of home insurance in different cities across the U.S., as well as the percentage difference from the national average — $1,899 per year.
As you can see, cities located in areas that are at high risk for natural disasters — like tornado-prone Kansas City, flood-prone Houston, and hurricane-prone Miami — see higher rates than cities located in more mild climates.
|
City |
Average monthly cost |
Average annual cost |
Percentage difference from state average |
|---|---|---|---|
|
$85 |
$1,025 |
-14% |
|
|
$171 |
$2,051 |
3% |
|
|
$183 |
$2,196 |
-29% |
|
|
$130 |
$1,562 |
13% |
|
|
$134 |
$1,605 |
-4% |
|
|
$203 |
$2,432 |
18% |
|
|
$259 |
$3,104 |
24% |
|
|
$127 |
$1,523 |
-4% |
|
|
$297 |
$3,559 |
16% |
|
|
$259 |
$3,104 |
24% |
Cheapest and most expensive states for homeowners insurance
Where your home is located is one of the biggest factors in how much your home insurance will cost. All five of the most expensive states are located in Tornado Alley, and they’re also at high risk for other extreme weather.
Arkansas — the third most expensive state for home insurance on our list — saw an 18.5% increase in home insurance rates from 2021 to 2022, according to our Home Insurance Pricing Report.
Below are the most expensive and cheapest states for homeowners insurance.
Top 5 most expensive states for home insurance
1. Oklahoma: $4,230 per year
2. Nebraska: $3,741 per year
3. Kansas: $3,094 per year
4. Texas: $3,027 per year
5. Arkansas: $2,924 per year
Top 5 cheapest states for home insurance
1. Hawaii: $486 per year
2. Vermont: $900 per year
3. New Jersey: $904 per year
4. Oregon: $905 per year
5. Utah: $923 per year
Some of the reasons states like Hawaii are seemingly so cheap for home insurance is because wind damage is excluded from coverage. That means homeowners in Hawaii have to buy separate windstorm insurance, which is an additional cost for residents in the Aloha State.
Average homeowners insurance cost by company
How much your home insurance costs will also differ by company — even for the same basic coverage amounts. That’s because each company prices risk in its own way. And some companies offer special perks or coverage add-ons in their base policy that others don’t, leading to higher base rates.
Based on our analysis of the 10 cheapest home insurance companies of 2022, we found that Erie homeowners insurance is the most affordable, followed by Auto-Owners Insurance and USAA.
Keep in mind that how much home insurance costs can also vary greatly within the same company based on the city or even ZIP code you live in depending on the area’s crime rate, claims history, and wildfire risk — among other factors.
That’s why it’s so important to compare rates from a few different companies to ensure you’re finding the best deal for you.
Average home insurance cost by dwelling coverage amount
How much your home insurance will cost is largely determined by your policy’s dwelling coverage limit — the part of your policy that pays to repair or rebuild the structure of your house when it’s damaged. Your dwelling coverage limit should be equal to your home’s replacement cost — or how much it costs to rebuild from the ground up.
In general, the more dwelling coverage you have, the higher your premiums will be.
Here is the average annual cost for a standard homeowners insurance policy by dwelling coverage limit, according to our analysis of 2022 rate data.
|
Dwelling coverage amount |
Average monthly premium |
Average annual premium |
|---|---|---|
|
$100,000 |
$79 |
$946 |
|
$200,000 |
$120 |
$1,442 |
|
$300,000 |
$158 |
$1,899 |
|
$400,000 |
$207 |
$2,481 |
|
$500,000 |
$256 |
$3,066 |
Your rates may be higher if you need extra coverage
These rates don’t tell the full story, as they don’t take into account coverage add-ons or separate policies you may need to purchase for protection against earthquakes, wildfires, hurricanes, or windstorms. For example, while rates are extremely low in Hawaii, this doesn’t factor in the cost of separate hurricane insurance you’ll be required to purchase if you have a mortgage.
And homeowners in Oregon who live in areas at high risk of wildfires may be denied coverage from a standard home insurance company altogether. In this case, you’d be forced to find coverage through a specialty insurer or the Oregon FAIR Plan, which are both typically more expensive.
What coverage is included in a home insurance rate?
A standard homeowners insurance policy is made up of six different types of coverage. Dwelling coverage is the coverage component that impacts the cost of your home insurance the most, and is based on your home’s replacement cost value.
How much is homeowners insurance by deductible amount?
Your deductible is the amount you’re required to pay out of pocket when you file a property damage claim before your insurance company will kick in to pay the rest. You choose your deductible amount when you purchase your policy, and most insurers give you the option of setting it from $500 to $2,000.
How much your deductible costs is directly correlated to the cost of your homeowners insurance premiums. The higher you set your deductible, the cheaper your home insurance will be.
Here’s a look at how much annual home insurance rates differ depending on your deductible with major insurance carriers, according to our analysis of 2022 rate data.
|
Company |
$500 deductible |
$1,000 deductible |
$2,000 deductible |
|
Allstate |
$1,776 |
$1,596 |
$1,104 |
|
ASI Progressive |
$2,750 |
$2,618 |
$1,365 |
|
Auto-owners |
$1,171 |
$1,283 |
$1,010 |
|
Erie |
$1,446 |
$1,346 |
$1,259 |
|
State Farm |
$2,327 |
$2,039 |
$1,551 |
Other factors that affect the cost of home insurance
While where you live is one of the biggest factors home insurance companies take into consideration when nailing down your the cost of your home insurance, some lesser-known variables like your credit score and even your profession could influence how much you pay.
Here are just some of the different factors that impact home insurance rates:
Factors related to your home
-
Location.Homes in high-risk tornado, flood, wildfire, or hurricane zones will see higher rates than those in more mild climates. Likewise, living in a city with more cases of vandalism and theft than out in the country could also cost you. Insurers even take into account your proximity to a fire station when determining your rates.
-
Age of home and roof.Houses with old aluminum wiring, outdated plumbing, or roofs that haven’t been replaced in over 15 years will likely see higher rates — if you can get coverage at all. This is due to the increased risk of filing a claim that comes with living in older or historic homes. If you have a roof in bad condition or one that’s over 20-years-old, you’ll likely see higher rates.
-
Pools and attractive nuisances.Insurers consider pools, tree houses, and trampolines to be “attractive nuisances,” meaning they might tempt people onto your property, raising the risk that someone will be injured — and increasing your rates.
Factors related to the homeowner
-
Claims history.If you filed a claim in the past few years or live in an area with a high number of claims, you’ll see higher premiums to match the risk.
-
Credit history.Most states allow insurance companies to check your credit history. A higher credit score means lower rates, and vice versa.
-
Aggressive dog breeds.Some insurers exclude coverage or raise rates if you own a big dog, like Rottweilers and pit bulls, because you’re statistically at a higher risk for filing a personal liability claim if your dog were to injure someone.
Factors related to coverage and policy specifics
-
Coverage limits.How much you opt for dwelling coverage and any extra coverage add-ons is directly tied to your insurance premiums. Higher coverage limits and more specialized coverage add-ons equals higher rates.
-
Deductible.Policy deductibles are the amount you pay out of pocket for every claim you file before your insurance company kicks in to cover the rest. You can typically choose a deductible between $500 and $2,000. Low-deductible policies spell higher premiums, and vice versa.
-
Discounts you qualify for.Homeowners insurance companies offer discounted rates for everything from bundling your home and auto policies, to working in a certain profession (like for educators or civil servants), to paying your premiums up front for the year.
How high-risk factors affect home insurance costs
Homeowners insurance companies consider many factors when calculating your homeowners insurance rates, and one of them is how at risk you are for filing a claim.
Some reasons you may be considered a high-risk candidate for coverage may be related to you — like if you have a history of filing claims or a poor credit score — or to your home — like if you live in an area that experiences frequent wildfires or tornadoes.
Other reasons could be because you’re considered high risk for filing a liability claim, like if you own an aggressive dog or have a pool or trampoline on your property.
High-risk homes tend to be more expensive to insure due to the increased risk of filing a claim.
Here’s a look at a few common circumstances that may result in more expensive rates, and how much each factor increases home insurance costs on average.
|
High-risk factor |
Average annual cost |
Difference from national average |
|---|---|---|
|
Aggressive dog |
$1,986 |
5% |
|
Pool |
$2,002 |
5% |
|
Poor credit |
$3,645 |
92% |
|
Filed 1 claim |
$2,101 |
11% |
|
Filed 3 claims |
$2,916 |
54% |
|
Filed 5 claims |
$4,407 |
132% |
|
30-year-old home |
$1,933 |
2% |
|
75-year-old home |
$1,931 |
2% |
|
100-year-old home or older |
$1,956 |
3% |
|
20-year-old roof |
$1,913 |
1% |
How to save on homeowners insurance
Along with bundling your insurance policies, not filing many claims, and ditching high-risk items like trampolines, you can also lower your homeowners insurance premiums through some of the following techniques.
Add security and safety devices to your home
How much you can save: Up to 15% off your premiums
Install wind-resistant features to your home
How much you can save: Up to 55% off the wind portion of your policy
Additional ways to save on home insurance
Here are a few additional ways you can lower the cost of home insurance.
-
Improve your credit score. Making a conscious effort to pay down your credit card debt, make payments on time, and avoid opening up new accounts will help your overall financial health — and give you lower home insurance rates to boot.
-
Raise your deductible. As we mentioned earlier, opting for a higher deductible can help you pay lower premiums each month. Just make sure you have enough in savings to cover the higher out-of-pocket costs.
-
Re-think your coverage limits and add-ons. Only one in 10 homeowners review or update their homeowners insurance policy every five years, according to a study by the National Association Insurance Commissioners. [2] But we recommend reviewing your coverage annually. Did you ditch your high-tech home office? Pass down your prized heirloom jewelry to your grandchildren? Then you might not need as high of coverage limits. Taking some of these extra coverage add-ons off of your policy can help lower your home insurance bill.
-
Bundle your home and auto policies together. Some insurance companies offer a discount of up to 35% for bundling your home and auto policies together.
-
Think twice before filing a small claim. Since your claims history directly impacts the cost of your home insurance, avoid filing a claim for smaller incidents that wouldn’t cost you too much to just pay yourself out of pocket.
-
Ditch your kid’s trampoline or treehouse. These “attractive nuisances” put you at greater risk of filing a claim, in turn raising your premiums.
Article By: Pat Howard & Kara McGinley
Source: Policygenius