How much is homeowners insurance? Average costs & factors that impact rates

On average, homeowners insurance is $275 per month, or $3,303 a year, for a homeowner with a mid-range credit score and a policy with $350,000 in dwelling coverage. Average yearly premiums range from $672 on the low end (Hawaii) to $5,819 on the high end (Oklahoma). This estimate is based on the Consumer Federation of America’s analysis of Quadrant Information Services data.

While these benchmarks are a good starting point, how much homeowners insurance is depends on a multitude of factors beyond the state in which you live, including the age and condition of your home, as well as your deductibles, coverage limits, and optional policy add-ons. Your credit-based insurance score (in most states) and claims history will also impact your rate. 

Ultimately, home insurance costs depend on your home’s unique risk profile — that is, the specific risks that could lead to a claim. The location, condition, and materials your home is built with all help determine its risk profile.

Home insurance rates by state

The table below shows average annual home insurance rates for all 50 states and Washington, D.C. based on a policy with $350,000 in dwelling coverage. Dwelling coverage pays to repair or rebuild your home if it's damaged or destroyed.

Filtering premiums by state is one of the best ways to estimate home insurance costs because a state’s unique weather patterns are a big determinant in base rates. For instance, insuring homes in Tornado Alley, along hurricane-prone coasts, and in states at higher risk of wildfires generally costs more than insuring a home in a place with fewer weather-related risks.

^{Source: Average premiums reflect $350,000 in dwelling coverage. Unasterisked rates are from the Consumer Federation of America’s analysis of Quadrant Information Services data. Current data for Wyoming was unavailable. Asterisked rates reflect averages for Kin policyholders.}

What affects homeowners insurance rates?

Beyond your home’s location and associated risks, several other factors affect home insurance rates, from how much coverage you choose to your credit-based insurance score. 

Dwelling coverage and replacement cost

How much dwelling coverage you choose is one of the biggest driving factors impacting your home insurance rate. Dwelling coverage is what financially protects the physical structure of your home, including the roof, foundation, walls, floors, ceilings, built-in appliances, attached structures, and all electrical, HVAC, and plumbing systems.

You should generally carry enough dwelling coverage to pay the full cost of rebuilding your home from the ground up following a total loss. This is an important distinction: You’ll want to consider the total replacement cost value of your home (what it would cost to build an exact replica using today’s materials and labor costs), not the market value of your home. Your home insurance agent or an independent appraiser can help you determine the right amount of dwelling coverage for your home. 

The more dwelling coverage you carry, the more your policy will cost, because your insurer will have to pay out more in the event of a covered claim for a total loss. 

The age and condition of your home

The age and condition of your home also influence home insurance premiums. In general, older homes are more expensive to insure because worn out construction can be more susceptible to damage. Older homes may also have aging plumbing and electrical systems or roofs.

Roof age is an especially important factor. Homes with roofs that are 15-20 years old (or older) are often more expensive to insure than homes with newer roofs because they are more vulnerable to damage. 

Replacing your roof is often worth the cost: In many cases, you can recoup some of your roof replacement costs through lower insurance premiums over time.

Your deductible selection

Home insurance policies include a deductible — that is, the amount you must pay out of pocket when filing an approved claim for a covered peril. A typical home insurance policy has a standard deductible, usually ranging from $500 to $2,500, but depending on your insurer and where you live, you may have a separate wind and hail deductible.

Choosing a lower deductible means you’ll pay less out of pocket in the event of a covered claim. However, lower deductibles result in higher insurance premiums. To save money on your home insurance, you can opt for a higher deductible, but keep in mind you’ll have to pay more out of pocket when filing a claim.

Pro tip: You’ll also have separate deductibles if you carry flood insurance or earthquake insurance.

Coverage amounts and optional endorsements

The details of your coverage — what’s covered and for how much — also affect your home insurance costs. For instance, you can add optional endorsements to your policy to provide additional financial protection. These offer coverage for perils excluded from standard home insurance policies. Common endorsements include: 

• Water backup coverage: This protects you financially if water backs up into your home or your sump pump fails.

• Service line coverage: This covers repairs and clean up costs if utility lines on your property are damaged.

• Equipment breakdown coverage: Standard wear and tear is excluded from home insurance, but this add-on covers the cost of repair or replacement if home appliances or systems (such as a refrigerator or HVAC system) have a mechanical breakdown.

• Scheduled personal property coverage: This increases the coverage limit for individual items of personal property — especially important if you own expensive jewelry, fine art, musical instruments, or valuable collectibles.

• Ordinance or law coverage: This covers the added cost of code-compliant upgrades if there is updated regulation for the damaged structure or system. 

Beyond endorsements, you can further personalize your homeowners insurance by increasing coverage limits, including personal property and personal liability limits. Increasing coverage limits generally provides more extensive financial protection for a relatively small price increase. 

Credit-based insurance scores

In most states, insurers can use your credit history to help predict the likelihood of a claim. But insurers don’t look at your traditional credit score; they instead use your credit-based insurance score. These scores are not technically the same, but they include many of the same metrics. A high credit score generally yields a high credit-based insurance score. 

Homeowners with higher credit scores are generally seen as less likely to file home insurance claims, according to multiple studies analyzed by the Insurance Information Institute. However, some states ban the use of credit-based insurance scores in home insurance pricing. 

Claims history

Finally, your personal claims history and your home’s claims history influence how much you pay for homeowners insurance. If you’ve made multiple claims, especially in recent years, your home insurance premium will likely go up.

Even the claims filed by previous homeowners who lived in your home can affect how much you pay. Insurers can analyze a Comprehensive Loss Underwriting Exchange (C.L.U.E.) Property report through LexisNexis to better understand past losses for your home. More losses indicate a greater risk and typically cause higher premiums.

Why homeowners insurance costs are rising

Regardless of where you live, the age of your home, or how many claims you’ve filed in recent memory, you’ve probably noticed your homeowners insurance costs are rising. And you’re not alone. Across the country, rates are increasing steadily. 

Construction and labor inflation

Following the COVID-19 pandemic, construction material costs skyrocketed, including lumber and steel prices. While inflation almost always causes prices to go up over time, the increase over the last half a decade has been much steeper than in decades past, per data from the U.S. Bureau of Labor Statistics (via the Federal Reserve Bank of St. Louis).

There has been a similarly high inflation rate for construction machinery and labor rates. Labor is especially becoming more expensive as the construction industry faces an ongoing skilled worker shortage.

These rising costs make it more expensive to repair and rebuild homes after covered losses, increasing the cost of insurance coverage.

Catastrophic weather trends

Across the country, homeowners are facing an increase in “secondary perils,” such as thunderstorms, hail, and localized flooding. Major weather and climate disasters are also increasingly common.

The National Centers for Environmental Information tracked an average rate of nine annual billion-dollar disasters (disasters resulting in $1 billion or more in damage, adjusted for inflation) from 1980 to 2024. The rate from 2020 to 2024 (23 a year) more than doubled the overall rate, indicating a recent increased frequency in major devastating weather events like wildfires, hurricanes, droughts, winter storms, and tornadoes.

The reinsurance market

Reinsurance is insurance purchased by insurance companies. It helps ensure they can stay financially stable in the event that they must make a high number of major payouts following a catastrophic event, like a hurricane. 

Because the frequency of major weather events has increased in recent years, reinsurance costs have followed suit. Ultimately, those rising costs for insurers get passed on to homeowners via higher premiums.

How to lower your homeowners insurance cost

Homeowners insurance costs are on the rise, but that doesn’t necessarily mean you’re simply stuck paying more. Here are a few ways to lower your homeowners insurance costs.

• Bundle home and auto policies: Most insurance companies offer a discount if you purchase both your home and auto insurance policies from them. The bundle discount varies by insurer but often ranges from 15-25%.

• Ask about other discounts: Most major insurers offer a wide range of homeowners insurance discounts, such as green home discounts, pay-in-full discounts, paperless discounts, and even non-smoker discounts.

• Home safety upgrades: You can often qualify for a home safety discount after you install certain safety features, such as burglar alarms, smart water leak sensors, and smoke detectors.

• Wind and storm mitigation: In some states, you might qualify for wind and storm mitigation discounts after hardening your home. This includes strategies that make your home more resistant to damage, like installing impact-resistant shingles or hurricane shutters.

• Improve your credit: In addition to making on-time payments on all your debts, you can review your credit report and dispute any errors. Insurers generally reward higher credit-based insurance scores with lower rates in states where credit is permitted as a rating factor.

• Shop around regularly: Each year, shop around to see if you can find better rates for the same amount of coverage from other insurers. But remember that insurance companies also often offer loyalty discounts, so sometimes it pays to stay with your current insurer.

Frequently asked questions

How much is home insurance per month?

The average cost of home insurance per month is $275 for $350,000 in dwelling coverage, per the Consumer Federation of America. Most homeowners pay this as part of their monthly mortgage escrow payment. However, home insurance rates vary depending on where you live, the age and condition of your home, the deductible and coverage limits you choose, optional policy add-ons, and even your credit history.

Is homeowners insurance cheaper if you pay for the year?

Homeowners insurance is usually cheaper if you pay for the full year upfront. That’s because insurers often offer a “paid in full” discount for one lump-sum payment at the start of a policy, rather than monthly payments throughout the policy term. If you have a mortgage with an escrow account, your lender typically uses your escrow funds to pay your home insurance premium annually.

What is the 80% rule for homeowners insurance?

The 80% rule for homeowners insurance is a guideline that helps ensure you have enough home insurance coverage in the event of a large claim. Typically, insurers want homeowners to insure their homes for at least 80% of the home’s replacement cost. For instance, if your home’s replacement cost value is $400,000, your home should be covered for at least $320,000.

Fall short of that threshold and your insurer may only pay part of your claim, even if your policy is otherwise in good standing. It's worth reviewing how much home insurance coverage you need with your agent to make sure you're adequately covered.

Why did my homeowners insurance go up if I didn’t file a claim?

While filing a claim can cause your home insurance to go, it’s not the only reason for a premium increase. Home insurance costs can also rise due to external factors such as rising construction costs, changing weather and criminal activity in your neighborhood, and the overall global reinsurance market. Your rate will also go up if you raise your coverage limits or lower your deductibles. 

What is the cheapest state for homeowners insurance?

Hawaii and Vermont are the cheapest states for homeowners insurance. The average annual cost of a policy with $350,000 in dwelling coverage is $672 in Hawaii and $984 in Vermont, according to the Consumer Federation of America. While several factors influence home insurance prices across the country, these two states are less at risk for certain natural disasters, such as tornadoes, wildfires, and large-scale hailstorms.