Jane Dotson
Finding the cheapest home insurance can be a challenge, especially since rates have been rising faster than usual in recent years. The average cost of homeowners insurance in the U.S. is about $2,110 a year for $300,000 worth of dwelling coverage, but rates vary by state. The average annual rate for homeowners insurance in San Jose, California, was $1,090, while in Houston, Texas, it was $6,370. The cheapest home insurance companies in the U.S. are USAA and Auto-Owners, although USAA only serves military members, veterans, and their families. Other cheap options include Amica, State Farm, Erie, and Progressive.
| Characteristics | Values |
|---|---|
| Average Annual Cost | $2,110 for $300,000 worth of dwelling coverage |
| Cheapest Companies | Amica, USAA, Auto-Owners, Erie, State Farm, Progressive, Travelers, Nationwide, American Family, Allstate |
| Factors Affecting Cost | Dwelling coverage, location, credit score, claims history |
| Cheapest States | Hawaii, Vermont, Delaware, Alaska, Maine |
| Most Expensive States | Oklahoma, Texas, Nebraska, Colorado, Kansas |
| Cheapest City | San Jose, California |
| Most Expensive City | Houston |
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What You'll Learn
Cheapest large insurance companies
The cheapest large homeowners insurance companies in the US vary depending on location and individual circumstances. For example, USAA is the cheapest option in Alaska, Arkansas, Connecticut, Illinois, Mississippi, Oklahoma, Tennessee, West Virginia, and Washington, D.C. However, USAA policies are only available to active military personnel, veterans, and their families.
According to US News, Amica is the cheapest option overall, with monthly rates for a wood-frame home with $300,000 in dwelling coverage and $100,000 in liability coverage ranging from $146.20 with Amica to $444.53 with Travelers.
NerdWallet and Bankrate both name Travelers, Progressive, and USAA as the cheapest large insurance companies. Travelers is a good option for those with poor credit, and it offers easy online policy management. Progressive is also a good choice for those with poor credit or a claims history. USAA is a great option for military members and their families, as it covers belongings on a “replacement cost” basis, meaning the company will pay for brand-new replacements without deducting for depreciation.
Other cheap options for homeowners insurance include Nationwide, Allstate, State Farm, and Auto-Owners.
It is important to note that the cost of homeowners insurance depends on various factors, including the location, the size and features of the home, and the credit score of the homeowner. The average cost of homeowners insurance in the US is about $2,110 a year for $300,000 worth of dwelling coverage, but rates can vary by state. For example, the average annual rate in San Jose, California, is $1,090, while in Houston, it is $6,370.
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Average rates by state
The average cost of homeowners insurance in the US is around $2,110 a year, or $176 a month, for $300,000 worth of dwelling coverage. However, rates vary by state, and in some cases, by thousands of dollars.
Oklahoma is the most expensive state for home insurance, with an average rate of $5,858 a year, or about $518 a month. This is due to the high number of natural disasters, such as hurricanes, hail storms, and tornadoes, which cause an increase in home insurance costs. Texas, Nebraska, Colorado, and Kansas are also among the most expensive states for homeowners insurance, with average annual rates of $4,585, $4,505, $4,175, and $3,735, respectively.
Hawaii has the lowest home insurance rates in the US, with an average annual cost of around $610, or about $51 a month. Vermont, Delaware, Alaska, and Maine are also among the cheapest states for homeowners insurance, with average annual rates ranging from $950 to $1,180.
It's worth noting that rates can also vary within a state, with zip codes affecting premiums. Additionally, the cost of dwelling coverage, the size of the house, and the amount of coverage needed also influence the overall cost of homeowners insurance.
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Cost based on dwelling coverage
The cost of homeowner's insurance is influenced by several factors, including the dwelling coverage amount, which is based on how much it would cost to rebuild the home in the event of a total loss. This amount is not necessarily the same as the market value of the home, which includes the value of the land. Building costs have risen over the years due to inflation, worker shortages, and supply chain issues, so it's important to ensure that your dwelling coverage limit is sufficient.
The average cost of homeowner's insurance in the US is about $2,110 per year for $300,000 worth of dwelling coverage, but rates can vary by state and location within a state. For example, the average annual rate in San Jose, California, is $1,090, while in Houston, Texas, it is $6,370. Additionally, the cost of insurance can be influenced by factors such as credit history, with homeowners with poor credit paying significantly more for insurance.
The amount of dwelling coverage you need will depend on the size and features of your home. A larger home or one with high-end features will typically cost more to rebuild and will require higher dwelling coverage. It's important to note that condo policies and certain homeowners policies, such as HO-1 and HO-2, may have more limited dwelling coverage.
While you can request a lower dwelling coverage limit, it is essential to ensure that the limit is sufficient to cover the cost of rebuilding your home in the event of a disaster. Underinsuring your home could lead to financial difficulties if a fire or other catastrophe occurs.
When considering the cost of homeowner's insurance, it's worth looking into bundling options, choosing a higher deductible, or shopping around for quotes from multiple companies to find the best rate for your desired level of dwelling coverage.
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Cost for those with poor credit
The cost of home insurance for those with poor credit can vary depending on several factors. While credit history can be a significant factor in determining insurance rates, it is not the only consideration. Other factors such as the characteristics of the home, claims history, and marital status can also impact the overall cost.
In most states, insurance companies use credit-based insurance scores to set rates for homeowners insurance. This means that individuals with poor credit may pay significantly more for their insurance. On average, homeowners with poor credit pay around 82% more for their home insurance than those with excellent credit. This can result in a substantial increase in the overall cost of insurance.
However, it is important to note that the impact of credit scores on insurance rates can vary. While poor credit may significantly impact rates in some states, certain states, such as California, Maryland, and Massachusetts, ban the use of credit data as a rating factor for homeowners insurance. In these states, credit history will not influence the cost of insurance.
To find the cheapest home insurance rates for those with poor credit, it is recommended to compare quotes from different insurance providers. Some companies, such as CSE, Brethren Mutual, and PEMCO, are known to offer more affordable rates for individuals with poor credit histories. Additionally, Travelers and Progressive have been identified as offering the cheapest home insurance for homeowners with poor credit.
It is also worth noting that improving one's credit history can help reduce insurance costs over time. Making timely payments, utilizing less available credit, and regularly checking one's credit report for errors can contribute to improving credit scores and potentially lowering insurance rates.
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Companies with the lowest premiums
The average cost of homeowners insurance in the U.S. is about $2,110 a year for $300,000 worth of dwelling coverage, but rates vary by state. The cheapest state for homeowners insurance is Hawaii, with an average annual rate of $610.
USAA offers some of the cheapest average home insurance rates in the U.S. However, it is only available to active-duty military, veterans, and their qualifying family members. USAA covers military uniforms with no deductible and offers extended replacement coverage of up to 150%.
Amica offers the cheapest rate with an average monthly premium of $146.20 for $300,000 dwelling and $100,000 liability coverage. For $500,000 dwelling and $300,000 liability coverage, the premium is $179 per month.
Progressive offers the most affordable coverage for three of four different dwelling coverage amounts analysed: $200,000, $350,000, and $500,000.
State Farm is the second cheapest option, with a monthly cost of approximately $170.89 for a standard sample premium. When the sample premium increases to $500,000 for dwelling and $300,000 for liability, the rate rises to $234 per month.
Erie Insurance is also a cost-effective option, with half the volume of complaints of similarly-sized insurers. Erie also received an A+ from the Better Business Bureau.
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Frequently asked questions
Some of the cheapest homeowner insurance companies include USAA, Auto-Owners, Amica, State Farm, Erie Insurance, and Progressive.
The cost of homeowner insurance depends on factors such as the location of your home, the size of your home, and the features of your home. For example, homes in Oklahoma have an average insurance cost of $6,210 a year, whereas homes in Hawaii have an average insurance cost of $610 a year. Additionally, if your home is large or has high-end features, it will likely cost more to rebuild, and you will need more dwelling coverage.
To find the cheapest homeowner insurance rate, it is recommended that you shop around and compare quotes from at least three insurers. You can also use websites such as NerdWallet and Bankrate to compare the average rates of different insurance companies.
