The Average Cost of Homeowners Insurance

Homeowners Insurance

Homeowners insurance is an important way to financially protect yourself in case of damage or destruction to your home or belongings, such as fire or theft. It also covers costs if you accidentally damage another person’s items in the process of maintaining them for yourself.

What state has the cheapest homeowners insurance?

The cheapest states to buy homeowners insurance in the USA are Hawaii, Utah, Vermont, Oregon, Pennsylvania, New Jersey, Delaware, and New Hampshire. These locations have average annual premiums that are less than $1,000 per year, likely  because there’s such a low risk of natural disasters, like tornadoes, hurricanes, or wildfires, damaging your house.

Below is the annual average home insurance cost in these states:

Hawaii – Average home insurance cost: $400

Utah – Average home insurance cost: $646

Vermont – Average home insurance cost: $686

Oregon – Average home insurance cost: $712

Pennsylvania – Average home insurance cost: $736

New Jersey – Average home insurance cost: $751

Delaware – Average home insurance cost: $770

New Hampshire – Average home insurance cost: $794

What state has the most expensive homeowners insurance?

Below you can find a list of states where the annual average homeowners insurance cost is the most expensive:

Texas – Average home insurance cost: $1,883

North Dakota – Average home insurance cost: $1,941

South Dakota – Average home insurance cost: $1,997

New Mexico – Average home insurance cost: $2,024

Arkansas – Average home insurance cost: $2,104

Kansas – Average home insurance cost: $2,767

Nebraska – Average home insurance cost: $2,900

Oklahoma – Average home insurance cost: $3,518

What is the formula to calculate homeowners insurance?

It can be difficult to determine the right amount of home insurance coverage you need on your own. The best way to figure out how much home insurance coverage you need is by multiplying the square footage of your house by its cost to rebuild.

For example, the average cost to build per square foot for homes in your area is $250. If you had a 1,500 square feet home, the dwelling coverage would be 1,500 x $250 = $375,000.(This cost will depend on your home type, age, condition of the house, safety features, etc.)

What factors affect homeowners insurance?

There are many factors that affect homeowners insurance. The most important factor is the value of your home. The value of your home will determine the amount of coverage you need and the premium you will pay for your insurance. More valuable homes are typically more expensive to insure because there is a greater financial risk if the home is damaged or destroyed.

Other factors that can affect your homeowners insurance are: 

The Location of the Home 

Homeowners insurance rates vary depending on the location of the home. Homes in urban areas are typically more expensive to insure than homes in rural areas because there is a greater risk of crime and accidents. If you live in an area that is prone to natural disasters, such as hurricanes or earthquakes, you will likely pay more for insurance than if you live in an area that is not prone to these types of disasters. 

Age and Condition of Your Home

The age and condition of your home can affect your homeowners insurance. Older homes are typically more expensive to insure because they are more likely to have structural problems that can lead to accidents or damage. If your home is newer, it will likely be worth more and will require less coverage. If your home is older, it may not be worth as much and will require more coverage. The condition of your home is also a factor. If your home is in good condition, it will likely cost less to insure than a home that is in poor condition. 

Type of Home You Have

The type of home you have can also affect homeowners insurance rates. For example, homes made of brick or stone are typically less expensive to insure than homes made of wood because they are more durable and less likely to be damaged in an accident. If you have a mobile home, you will likely pay less for insurance than if you have a traditional stick-built home. 

The Occupancy of the Home 

Homes that are occupied by renters are typically less expensive to insure than homes that are owner-occupied because renters are less likely to have as much personal property inside the home and are less likely to be held liable for damages caused by their actions.


The Safety Features of the Home 

Homes with security systems, fire sprinklers, and deadbolt locks typically receive lower rates because they are at a lower risk for burglary, fire, and other accidents.

The Credit Score of the Homeowner 

Homeowners with higher credit scores are typically seen as being more responsible and less likely to file claims, so they receive lower rates.

The Claims History of the Homeowner 

Homeowners who have filed multiple claims in the past are typically seen as being high-risk and are charged higher rates accordingly.

What are the four major categories of coverage in homeowners insurance?

Homeowners insurance is designed to protect you from financial loss in the event that your home is damaged or destroyed. There are a variety of different types of coverage available, and it’s important to understand what each one covers so that you can make sure you’re adequately protected. 

Here are the four major categories of coverage in homeowners insurance:

Dwelling Coverage

Dwelling coverage is the part of your policy that covers the physical structure of your home. This includes the walls, roof, flooring, and any permanent fixtures, like built-in cabinets or plumbing. Dwelling coverage does not cover damage caused by normal wear and tear, so it’s important to keep up with maintenance and repair any damage as soon as possible to avoid having to pay for it yourself.

Other Structures Coverage

Other structures coverage protects buildings on your property that are not attached to your dwelling coverage, such as detached garages, storage sheds, and gazebos. The amount of coverage you need depends on the value of these structures and how likely they are to be damaged or destroyed. For example, if you have a detached garage that houses valuable items, like classic cars or expensive tools, you’ll want to make sure it’s fully covered in case of fire or theft. 

Personal Property Coverage

Personal property coverage protects the belongings in your home from damage or theft. This includes furniture, clothing, electronics, appliances, and anything else that isn’t permanently attached to your dwelling. Most policies have a limit on how much personal property coverage they provide. So if you have high-value items, like jewelry or art, you may need to purchase additional coverage known as a personal property endorsement. 

Liability Coverage

Liability coverage protects you from financial loss if you’re sued for bodily injury or property damage caused by your negligence. For example, if someone slips and falls on your property and sues you for medical expenses, liability coverage would help pay for their injuries up to the limit set by your policy. Homeowners liability insurance also covers damages caused by your pets.

    These resources are for informational purposes only and should not be construed as legal advice. Landlords and Tenants are encouraged to seek specific legal advice for any of the issues as found in this blog.