Paul Sanchez
The cost of home insurance varies depending on a variety of factors, including location, the size of the home, the age of the home, and the amount of coverage desired. In the United States, the average cost of home insurance is $1,949 per year for a $350,000 dwelling limit with a $500 deductible. However, this average cost can differ significantly from state to state and even city to city. For example, in 2025, Houston had the most expensive average rate at $6,370 per year, while San Jose, California, had the cheapest rate at $1,090 per year. Additionally, older homes tend to be more expensive to insure than newer ones due to higher repair costs and the lack of modern safety features.
| Characteristics | Values |
|---|---|
| Average cost of home insurance in the US | $1,951 per year for $350,000 dwelling coverage |
| Average cost of home insurance in the US (Progressive) | $967 per year for $350,000 of dwelling coverage |
| Average cost of home insurance in the US (National Association of Realtors, 2024 figure) | $2,377 per year |
| Average cost of home insurance in the US (Bankrate) | $2,341 per year |
| Average cost of home insurance in the US (NerdWallet) | $2,110 per year |
| Average cost of home insurance in the US (Forbes) | $1,949 per year for a $350,000 dwelling limit with a $500 deductible |
| Cheapest city for home insurance | San Jose, California ($1,090 per year) |
| Most expensive city for home insurance | Houston, Texas ($6,370 per year) |
| Least expensive states for home insurance | Vermont, Alaska, and Delaware |
| Most expensive states for home insurance | Nebraska, Florida, and Oklahoma |
| Factors that influence insurance rates | Location, claims history, coverage limits, home characteristics, home size, home age, home condition, credit history, marital status, business use, and liability coverage |
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What You'll Learn
Average insurance rates
The average cost of home insurance in the US is $1,951 annually for $350,000 dwelling coverage. However, this varies depending on a range of factors. Firstly, location is a key determinant of insurance rates. States that are prone to natural disasters such as tornadoes, hurricanes, and wildfires tend to have higher insurance rates. For example, Nebraska, Florida, and Oklahoma are among the most expensive states for homeowners insurance, whereas Vermont, Alaska, and Delaware are the least expensive. Within these states, insurance rates can also vary by city, with Houston, Texas having the most expensive average rate at $6,370 a year, and San Jose, California being the cheapest at $1,090.
The age and condition of a home also influence insurance rates. Older homes tend to be more expensive to insure than newer ones due to the absence of modern safety features and the higher cost of repairs. The size of a home is another factor, as larger homes have higher insurance rates because of the increased "surface area" that can be damaged or destroyed. The type of home is also important, as homes built with materials that are less susceptible to fires and strong winds, such as concrete block homes, may have lower insurance rates compared to wood-frame houses.
The amount of coverage and deductible selected also impact insurance rates. A deductible is the amount paid out of pocket before the insurance policy kicks in. A higher deductible typically leads to lower insurance rates, while lower deductibles result in higher rates. The cost of insurance can also depend on the homeowner's credit history, with those who have poor credit paying more for insurance. Additionally, prior claims history can affect rates, as insurers may view individuals with previous claims as higher-risk and increase their premiums accordingly.
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Factors affecting insurance rates
The cost of home insurance is influenced by a multitude of factors. Understanding these factors can help homeowners reduce their premiums.
Firstly, the location of the house is a significant determinant. Crime rates in the area, proximity to emergency services, and the likelihood of adverse weather events or natural disasters can all impact insurance rates. For example, homes in wildfire-prone areas may face surcharges of up to 300%. Additionally, the characteristics of the house itself, including its age, construction materials, safety features, and renovations, can affect insurance costs. Older homes may be more expensive to insure due to the lack of modern safety features and the potential cost of repairs. Upgrading certain aspects, such as the electrical system, can lead to cheaper premiums, while finishing a basement or installing a pool may increase costs due to a higher replacement value.
The insurance company will also consider the homeowner's perceived risk and likelihood of filing claims. A history of previous claims can result in higher premiums, as it may indicate a higher risk. Credit scores are also taken into account in most states, as they are believed to correlate with the probability of filing claims. Improving your credit score can potentially lead to lower insurance rates.
Furthermore, the amount of dwelling coverage, or Coverage A, is a critical factor in determining insurance rates. This refers to the cost of rebuilding the home if it is damaged or destroyed. A higher deductible, or the amount subtracted from a claim payment, typically leads to lower insurance rates. Additionally, the presence of protective systems and devices, such as smoke detectors, security systems, and fire safety measures, can reduce the chance of filing claims and may result in premium discounts.
It is worth noting that insurance rates can vary significantly between companies, so it is advisable for homeowners to shop around and compare rates to find the best value for their specific circumstances.
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How to reduce insurance rates
The cost of home insurance depends on various factors, including the location, the size of the house, the amount of dwelling coverage, and the insurance company. On average, home insurance costs $1,951 annually for $350,000 of dwelling coverage. However, rates can vary significantly among companies, so it is essential to compare prices before purchasing a policy. Here are some ways to reduce your insurance rates:
Shop around and compare prices
The rates offered by insurance companies can vary significantly, so it is worth shopping around to find the best deal. Contact different insurance companies, ask for quotes, and compare the prices and coverage offered. Check consumer guides, insurance agents, companies, and online insurance quote services to get an idea of price ranges and find the lowest prices.
Improve your credit score
Insurers use credit information to price homeowners' insurance policies. Establishing a solid credit history can help lower your insurance costs. Pay your bills on time, don't take on more credit than you need, and keep your credit balances low. Regularly check your credit record and promptly correct any errors to maintain an accurate record.
Increase your deductible
A deductible is the amount you pay towards a claim before your insurance company covers the rest. Typically, a higher deductible leads to a lower insurance rate. Consider increasing your deductible to lower your overall insurance costs.
Make your home more resistant to natural disasters
If you live in an area prone to natural disasters such as windstorms, wildfires, or earthquakes, consider taking steps to make your home more resilient. Adding storm shutters, reinforcing your roof, or installing stronger roofing materials can help lower your premiums. Modernizing your heating, plumbing, and electrical systems can also reduce the risk of fire and water damage, leading to potential savings on your insurance costs.
Install security measures
Insurance companies consider the crime rates in your area when determining your insurance costs. Installing security measures such as a burglar alarm, deadbolt locks, or a sophisticated sprinkler system can help lower your premiums. These measures reduce the risk of theft and damage to your property, making your home a lower insurance risk.
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Most and least expensive states for insurance
The cost of home insurance in the US varies from state to state, with several factors influencing the rates. The average cost of home insurance in the US is $1,951 annually for $350,000 dwelling coverage, although this can range from $967 to $3,353 for a 12-month policy. The national average is $2,601 per year for $300,000 in dwelling coverage, with a $1,000 deductible and $300,000 liability limit.
Most Expensive States for Insurance
Oklahoma is the most expensive state for home insurance, with an average rate of $5,858 per year. Other expensive states include Texas, Nebraska, Kansas, Florida, and Colorado. These states tend to experience more natural disasters, such as hurricanes, hail storms, and tornadoes, which contribute to higher insurance costs. Additionally, the cost of rebuilding homes after damage has increased due to inflation, impacting insurance rates.
Least Expensive States for Insurance
Hawaii is the least expensive state for homeowners insurance, with an average annual rate of $613. This is because standard home insurance policies in Hawaii exclude damage from hurricanes, reducing the overall cost. Other inexpensive states for insurance include Vermont, Delaware, and San Jose, California. These states typically have a lower risk of major disasters, resulting in lower insurance rates.
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Insurance coverages and deductibles
The cost of home insurance depends on the types and amount of coverage and deductible options you choose.
Coverage
The amount of dwelling coverage, or Coverage A, is the main factor that determines how much you pay for homeowners insurance. The more coverage you want or need, the higher your premiums will be. The cost of dwelling coverage depends on the size of your home, the location, and the construction materials used. For example, concrete block homes may cost less to insure than wood-frame houses because they are less susceptible to fires and strong winds.
Other types of coverage that can impact your rate include personal property coverage, liability insurance, medical payments coverage, and additional living expenses coverage. If you are running a business out of your home, you may need to purchase a separate policy, which will increase your overall insurance rate. Animal liability coverage, such as for dog bites, may also increase your rate.
Deductibles
A homeowners insurance deductible is the amount of a claim you pay before your insurance kicks in. Typically, a higher deductible leads to a lower home insurance rate, and a lower deductible leads to a higher rate. Deductible options usually range from $250 to $2,500. For example, if you file a claim for $5,000 worth of damage and your deductible is $1,000, your claim payment will be reduced to $4,000.
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Frequently asked questions
The average insurance rate for a house in the US ranges from $1,949 to $2,377 per year.
Location is one of the greatest factors impacting the insurance rate for a house. Homes in areas that are prone to extreme weather, flooding, wildfires, or crime are more expensive to insure. For example, homes in the Midwest tend to have higher premiums due to the increased risk of tornadoes and windstorms.
Older homes often cost more to insure than newer ones as they may not have the same safety features, and repairs can be costly.
Larger homes have higher insurance rates than smaller homes as there is more "surface area" that can be damaged or destroyed, leading to higher repair and rebuilding costs.
Typically, a higher deductible leads to a lower home insurance rate, and a lower deductible leads to a higher insurance rate.
