It’s the first question homeowners ask when they’re sizing up a home insurance policy: How much is this going to cost me?

It’s also one of the trickiest questions because home insurance rates depend on so many personal factors: where you live, the condition of your home, even — to an extent — your claims history.

So tricky, definitely. But there’s some science behind it too, and that’s what we’re going to discover in this guide — how we can get an accurate idea of what home insurance costs these days based on hard data.

Before we delve into state-by-state pricing (because, yes, location matters a lot for home insurance rates), we’re going to give you a roundup of all the factors that impact your homeowners premium. After that, stick around for some key insights into HO-3 policy pricing you might not be aware of.

Did You Know: Home insurance policies come in eight types, from HO-1 (bare bones) to HO-8 (high risk). The majority of homeowners go with an HO-3 policy, which covers all 16 perils, or accidents, and personal belongings.

Six Factors That Influence Your Homeowners Rates the Most

Your location

High-risk states have higher insurance on average.

You may have heard that insurance companies have different home insurance rates for different states. That’s actually true. The average homeowners premium in Texas is $1,950 per year. If we mosey on over to Idaho, it’s just $770.

This isn’t because your average insurance underwriter likes the Potato State any better than life on the open range. It’s because of weather — bad weather.

Texas has a few weather risks that Idaho doesn’t have. One, the Gulf Coast is prone to hurricanes. Two, there’s a swath of Texas that’s at high risk for tornadoes. Put those two risks together, and you’ve got the perfect storm for higher homeowners premiums.

But here’s the catch. Not every area in Texas pays high home insurance bills. As we saw when we reviewed the best Texas homeowners policies, premiums in the safer hill country around Austin were a lot cheaper than the rates in stormy Corpus Christi.

Which brings us to the second location factor that affects your insurance rates.

Your neighborhood plays a role in your monthly homeowners bill.

One of the top risks insurance companies assume is home burglary. If your house is in a neighborhood with a lot of theft, your home insurance rates will be higher. That’s because it isn’t just you that your home insurer is taking a risk on. It’s the statistical risk of crime where you live. They call this collective risk, and while it’s certainly not fair, it’s a fact of life.

Homeowner's Tip: If you’re having trouble finding insurance in your neighborhood, you do have options. Check your state’s FAIR Plan or reach out to the folks at NeighborWorks for assistance.1

The Age and Condition of Your House

Have you ever hopped on a home insurance quote generator? They’re pretty fun. You type in your address and the generator will pull up your house’s profile: when it was built, how many stories it has, if it has an attached or detached garage, roof and basement types, and a lot more neat stuff.

If the info is accurate, you get a quote. If you have any updated information to offer — especially about your HVAC system or roof — you can report it. And you should report it, because how old your house is and how well it’s built affect your premium.

Newer roofs, sturdier foundations, and more energy-efficient materials and home systems mean lower monthly homeowners rates. In some cases, if your roof is too old, an insurer may actually decline coverage!

FYI: The average U.S. home was built in 1974 and is worth about $325,000.

Your Proximity to Emergency Services

Did you know that if you live closer to the fire department, your house is considered less of a risk? It’s true. And this will usually lower the cost of your homeowner’s policy, especially if your fire alarm is connected to the fire station (more on this later).

So while we’d never recommend buying a property just because it’s a stone’s throw from your local hook and ladder, don’t be surprised, when you’re getting a quote from a top home insurance provider, if they reward you for being closer to the engine house.

Your Protective Devices

We’ve already seen three factors that make your home less risky in the eyes of insurers: living in a state without natural disasters, living close to a fire station, and having a sturdy, eco-friendly home.

But home insurance providers also reward homeowners who have better home security. In fact, some providers, like Nationwide, even have smart home programs. For more on that, check out our full Nationwide review.

Generally, insurance companies give lower rates to homeowners who’ve installed smoke and fire alarms, sprinkler systems, smart door locks, and home security systems. When your alarms communicate directly with emergency services, you’ll save even more on your premium.

Pro Tip: Want to know if your home is doing its job to protect your loved ones? Take our two-minute home security quiz.

Your Claims History and Credit Score

When you’re applying for an HO-3 policy, all home insurance providers will ask you if you’ve filed a claim in the past five years. If you haven’t, you get a special discount.

We know, it’s a little weird. When you call the plumber to fix your sink, he doesn’t charge you extra because you had a leak a month ago. But that’s the way it works with home insurance. The fewer claims you file, the lower your premium will be.

Insurance score is more of a wild card, but with the exception of a few states (California, Maryland, Massachusetts, and Washington), many insurers will use relevant elements of your credit history to calculate your risk as a homeowner.

Your Deductible

Your deductible is the amount you need to pay before your insurance policy kicks in. Choosing a higher deductible is another way to lower your premium.

Just remember that what goes up must come down. If you go the opposite route and ask for a bigger helping hand from your insurer in the event of an accident, your premium will go up.

Did You Know: Married couples pay less for home insurance than single people. That’s because they file fewer claims than single folks. (We’re not passing any judgment; we’re just reporting the facts.) So when you’re applying for a policy, don’t forget to mention your better half.

Home Insurance Rates State by State

The average homeowners policy in the U.S. for a home worth between $300,000 and $390,000 costs $1,272 per year. How does your state compare? Here’s what the latest statistics from the National Association of Insurance Commissioners say.2

Important: These rates are statewide averages. Your home insurance may cost more or less depending on where in the state you live and the condition and age of your home, among other factors.

State Average premium per year Average premium per month
Alabama $1,708 $142
Alaska $987 $82
Arizona $921 $77
Arkansas $1,805 $150
California $871 $73
Colorado $1,638 $137
Connecticut $1,351 $113
Delaware $897 $75
District of Columbia $1,077 $90
Florida $2,319 $193
Georgia $1,486 $123
Hawaii $984 $82
Idaho $878 $73
Illinois $1,110 $92
Indiana $1,219 $102
Iowa $1,161 $97
Kansas $1,861 $155
Kentucky $1,407 $117
Louisiana $2,366 $197
Maine $980 $82
Maryland $1,087 $91
Massachusetts $1,310 $109
Michigan $1,091 $91
Minnesota $1,522 $127
Mississippi $2,015 $168
Missouri $1,585 $132
Montana $1,379 $115
Nebraska $1,950 $163
Nevada $794 $66
New Hampshire $1,010 $84
New Jersey $1,075 $90
New Mexico $1,236 $103
New York $1,242 $104
North Carolina $1,312 $109
North Dakota $1,514 $126
Ohio $1,019 $85
Oklahoma $2,446 $204
Oregon $756 $63
Pennsylvania $1,032 $86
Rhode Island $1,611 $134
South Carolina $1,457 $121
South Dakota $1,603 $134
Tennessee $1,441 $120
Texas $2,115 $176
Utah $750 $63
Vermont $944 $79
Virginia $1,047 $87
Washington $875 $73
West Virginia $1,225 $102
Wisconsin $874 $73
Wyoming $1,328 $111
* As reported by the NAIC in Dwelling, Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owner’s Insurance Report: Data for 2018

Average Home Insurance Costs in the U.S.

Looking for your average premium? Keep in mind that the first column of the chart below shows the amounts Americans insured their homes for, not how much their homes are worth. The logic goes like this.
If your home is worth $280,000 today, it could cost $320,000 to rebuild in a year or two with inflation and higher building costs. That’s what those insurance ranges below reflect: the extra coverage many homeowners calculate into their policies to fully cover themselves in the worst-case scenario of a total rebuild.
According to the NAIC, average coverage in the U.S. is between $300,000 and $390,000 and costs around $106 per month. That’s the highlighted row below. If you live in Texas, Florida, Louisiana, or Oklahoma — or in any state at higher risk for extreme weather — your premium will be a much different story.

Insurance range Average premium per year Average premium per month
$175,000 to $199,999 $1,018 $85
$200,000 to $299,999 $1,114 $93
$300,000 to $399,999 $1,272 $106
$400,000 to $499,999 $1,482 $124
$500,000 + $2,148 $179

FYI: One thing most of us aren’t looking for in our homeowners plans is protection from meteors. But chances are, our standard HO-3 policies will cover us from E.T. debris.3

The 5 Most Expensive States for Homeowners in the U.S.

If you’re braced for bad weather, brace yourself for chart-topping HO-3 premiums. To offset some of those extra costs, make sure you take advantage of any home insurance discounts your carrier offers. Living in the Sunshine State? We’ve got some special advice for homeowners in Florida.

State Average premium per year Average premium per month
Mississippi $2,015 $168
Texas $2,115 $176
Florida $2,319 $193
Louisiana $2,366 $197
Oklahoma $2,446 $204

The 5 Cheapest States for Home Insurance Nationwide

Want bargain home insurance? You’re going to have to put up with a lot of heat, cold, or rain. On the plus side, if you move to Utah, Oregon, Nevada, Wisconsin, or Washington, you can invest the money you save yearly on your homeowners policy in a better HVAC system (or a very nice umbrella).

State Average premium per year Average premium per month
Utah $750 $63
Oregon $756 $63
Nevada $794 $66
Wisconsin $874 $73
Washington $875 $73

Home Insurance Pricing: 2022 Insights

The Five Most Affordable Insurance Policies on the Market at a Glance

We looked at policies from California to New Jersey, rounding up quotes from the nation’s top homeowners insurance providers. These are the cheapest home insurance policies we found.

  1. Allstate

    Allstate has three budget H0-3 packages, depending on how much homeowners coverage you need, with excellent green incentives to make your savings go even further. For a closer look at Allstate’s home insurance plans, including their eco discounts, check out our Allstate pricing and protections guide.

  2. Lemonade

    Lemonade has been in the insurance market for only six years, but their unorthodox approach to home insurance has earned them a million happy customers who swear by their transparent policies, bargain premiums, and instant payouts. Lemonade policies start at $25 per month.

  3. State Farm

    State Farm offers big coverage at low prices. But their top offer is their auto and home insurance bundle, which can slash your homeowners premiums by up to 40 percent (we can vouch for this), making State Farm home insurance plans among the best in value for money on the market.

Did You Know: Today, the average homeowner is 47 years old. Back in 1981, the average was 31.4

You Can Lower Your Home Insurance Premium With Discounts and Bundles

Home insurance is a competitive market, so insurance companies always throw in deals to sweeten the pot. The king of home insurance discounts is Progressive with their Perkshare program. (Check out our Progressive costs and coverage guide for the full story on those discounts.) But Progressive isn’t alone. Most insurers will knock dollars off your home insurance policy if you:

  • Haven’t filed a claim in the past 3-5 years
  • Switch providers before your current policy expires
  • Have a new home or recently bought or renovated your home
  • Apply with your spouse
  • Installed protective devices in your home (see above)
  • Bundle more than one insurance policy together
  • Pay annually (versus monthly)
  • Go paperless

FYI: Do you own a dog? If your dog breed has a reputation for biting, you may have to pay for extra “dog bite” coverage. In rare cases, you might not get coverage.

Replacement Cost Coverage Is More Expensive, but It’s Often Worth It

We’re all looking for ways to save on our home insurance. But sometimes we may want to pay a little more so that we’re fully covered in the event of an accident (which one in 20 homeowners experiences yearly, by the way).5

Extra Coverage for Your Home

For houses, total security means padding out your base dwelling coverage with extra or extended replacement cost coverage. You’d want to put anywhere between 20 and 50 percent into your protection pot, depending on the condition of your home and local construction costs. Some insurers also offer inflation coverage, which automatically adjusts your property coverage limit over time to offset rising building costs.

Extra Coverage for Your Possessions

When it comes to your belongings, complete protection means paying a bit more for replacement cost value (RCV) coverage, rather than checking off the cheaper but dicier actual cash value (ACV) coverage.

Too many “replacement coverages”? This may help.

Actual Cost Value (ACV) Explained

Let’s say you come back from a weekend getaway and your $900 50-inch Sony TV is gone. The good news is that your HO-3 policy covers you for burglaries. The bad news is that due to the laws of tech depreciation, your $900 Sony is worth only about $400 today. With ACV coverage, that’s what you’d get from your insurer if you filed a claim.

That’s when you’d be wishing you’d paid a few bucks more per month for RCV protection.

Replacement Cost Value (RCV) Explained

With RCV coverage, your insurer would reimburse you for however much your Sony cost at the time you lost it. (As long as you documented your TV before it got stolen, preferably by receipt and photo, and submitted that information to your provider ahead of time.)

Homeowner's Tip: Looking for affordable home insurance with RCV coverage for your things? Nationwide’s plans offer RCV on the cheap.

Finding the Right Amount of Protection for Your Property

Remember, the amount of protection you want for your home isn’t how much it’s worth. It’s how much you’ll need to rebuild it after a disaster strikes. Your dwelling coverage is always going to be more than your house’s market value, mainly because building costs almost always go up.

To make this concrete, the price of construction materials skyrocketed in 2020. Some estimates say the increase was close to 20 percent in just 12 months.6 That would mean that a house you built at the beginning of 2020 for $320,000 would have cost $384,000 to rebuild at the end of the year.

That doesn’t mean you’d necessarily build the same house — you might have to make some hard choices to keep your rebuild on budget — but you get the point. Building costs fluctuate. To be completely covered, you need to fit those wild card construction costs into your policy, even if it means paying a little more monthly.

Sound like a job for Bob Vila? Actually, you can do it yourself. Here’s a simple three-step plan for nailing your replacement cost budget.

  1. Figure out the square footage of your home.

    Not sure how big your house is? You can find out yourself with a measuring app like Measure by Google or RoomScan. If the last thing you measured was a triangle in seventh grade, try your local tax assessor’s office (they’ll have the records) or hire an appraiser. They’re relatively cheap.

  2. Add up local building costs.

    Like home insurance premiums, construction rates vary from state to state and area to area. That said, the average home (around $300,000) cost $114 per square foot in 2019.7

  3. Do the math.

    Figures vary wildly for the average size of the American home. We’ve seen estimates ranging from about 1,650 sq. ft. (per The Atlantic via Zillow) to 2,261 sq. ft. (according to the U.S. Census Bureau).8 The National Association of Home Builders (NAHB), who you’d figure would know, pegs the magic number at 2,500. If we take something in the middle — 2,000 sq. ft. — the average home in the U.S. would cost about $228,000 to rebuild. One caveat: Those figures from the NAHB don’t account for the massive spike in building costs we saw in 2020.

Big House Fact: Thought you had a big house? Your house is a shed compared to the Sultan of Brunei’s mondo 2.15-million-sq.-ft. Istana Nurul Iman Palace. (To put that into perspective, the Pentagon, the world’s largest building, has 3.7 million sq. ft. of office space.) According to our own estimates, the sultan would need approximately $294 million to rebuild his mega palazzo at today’s construction rates.

It May Be Time for an Extra Home Warranty

Your home insurance plan covers a number of perils, including fire and smoke damage, some water damage, storm and hail, and theft. If your home’s appliances and systems, like your HVAC system, are destroyed (or stolen), your HO-3 will likely come to the rescue.

But what if your clothes dryer dies in mid-spin or your AC conks out in a heat wave? Your homeowners policy doesn’t cover wear-and-tear repairs. To get your appliances back in working order without breaking the bank, you’d need a home warranty.

Home Warranties Explained

A home warranty is a service contract for repairs on or replacement of your major appliances and home systems. The best home warranties offer 24/7 support for wear-and-tear repairs with low service fees (which are on you). Prices range from $25 to $85 per month.

Not every household needs a home warranty. You might want to add this extra layer of protection if your HVAC system and appliances are getting up in years but still have some life left in them.

If your house is newer, with its appliances still covered by warranties, you have another, much cheaper option: equipment breakdown coverage.

Equipment Breakdown Coverage Explained

Equipment breakdown coverage, or EBC, covers all your electric appliances (from your computer to your AC) from physical accidents, including mechanical failure. If your clothes dryer just stopped working, EBC wouldn’t kick in. But if it short-circuited, you’d be covered.

Many insurers offer some form of EBC. Lemonade offers EBC for as little as $2 per month. Curious about that? You can dive deep into EBC in our Lemonade review.

Just remember, unlike a home warranty, which is like a premium maintenance contract and won’t affect your claims history, EBC has a deductible and a claims process. A flurry of claims will drive your rates up.

Did You Know: Is five o’clock Chardonnay in the hot tub hour? You may be surprised to learn that some home warranties won’t cover your hot tub — or your garage door or septic tank. So always read the fine print before you sign off on a warranty.

Putting It All Together: A Homeowners Case Study

We’ve seen how, like family mac-and-cheese recipes, no two home insurance policies cost the same. We’ve analyzed the factors that account for those differences in rates, factors like where you live, the condition of your home, and how secure it is.

We’ve also taken a look at national homeowners averages (and the outliers), and pointed out a handful of areas to pay special attention to when you’re shopping for your HO-3 policy.

Despite all that, some of you may still be wondering: “OK, but how much does home insurance actually cost?”

We hear you, and we’ve put together some very granular data to sharpen the picture.

Nationwide, one of our top home insurers this year, has a great quote builder that’s easy to use and lets you build very personalized policies. We simulated a quote with a home that is, from our extensive research, truly the average American home. Here’s a complete breakdown of what it looks like and what it costs to insure from top to bottom.

Location Michigan
Year built $2,002
Square feet $1,700
Market value $325,00
Extended dwelling coverage $487,000
RCV coverage Included
Inflation coverage Included
Protective devices discount* Included
Building ordinance** 10%
Deductible $1,000
Monthly rate $133
Yearly rate $1,592
* Local burglar and smoke alarms, and sprinklers
** Extra coverage to rebuild to code

Final Thoughts

And that’s the story on home insurance rates. They’re difficult to pin down, but with a little knowledge (and some tips from the pros), you can get a surprisingly good idea of how much you should expect to be paying for an HO-3 policy in your neck of the woods.

If you thought our homeowners insurance pricing study was exhaustive, guess what? We’re constantly updating and expanding our data on home insurance, so tomorrow we may have even more.

Homeowner's Tip: Accepting building ordinance coverage to offset the extra costs of rebuilding to code is never a bad idea. Building to code doesn’t just help you survive accidents; it lowers insurance rates for your whole community over time and makes it easier to get federal assistance.9