Average homeowners insurance cost in 2024 | Bankrate (2024)

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How much is home insurance?

Based on rate data provided by Quadrant Information Services, the national average homeowners insurance cost is $1,759 per year — about $147 per month — for a policy with $250,000 in dwelling coverage. This is about 23 percent more than the 2023 homeowners insurance average of $1,428 for the same level of coverage. Insurance is not one size fits all. Coverage and cost vary drastically based on several unique factors, including the age of a home, square footage, cost of building materials and location. Each state has different regulations and natural hazards that also impact the cost of home insurance.

To get a better sense of what your home policy might cost, it could help to review average home insurance rates in your state. Some states may not face a high risk of natural disasters, while others have a cheaper cost of living that makes it more affordable to rebuild after a claim. Based on Bankrate’s analysis of average home insurance costs, policies with $250,000 in dwelling coverage can cost less than $750 per year, as seen in Hawaii, Vermont and Delaware, but cost well over $4,000 a year in states like Oklahoma, and Nebraska. Below is a breakdown of the average cost of homeowners insurance by state.

Learn more: How to estimate the cost of home insurance

Average home insurance cost by state

The average annual home insurance premium for a home with a dwelling coverage amount of $250,000.

*Based on policies with $250k dwelling coverage

Home insurance rates are known to fluctuate frequently, but you can rely on Bankrate to offer you the latest options available.

Average cost of home insurance by city

In addition to the state you live in, your individual city may also have an impact on your home insurance rates. Risk factors like weather damage and crime statistics vary by city, as do the costs for materials and labor. Below are the 25 largest cities in the U.S. by population and their average premiums, as provided by Quadrant Information Services. According to our research, Oklahoma City has the highest average annual premium on this list, at $5,223, while Portland, Oregon’s average annual premium is the lowest at $904.

Home insurance rates are known to fluctuate frequently, but you can rely on Bankrate to offer you the latest options available.

Home insurance is a multi-faceted product with many factors influencing your policy premium. Aside from location, claim history, square footage and several other rating factors, the amount of coverage you purchase and the company you choose may also impact the price of your policy. While $250,000 in dwelling coverage may be appropriate for some homeowners, it could be insufficient or too high for others. Some home insurance companies may use the age of your roof as a strong rating factor while others are more concerned with your home's proximity to the fire department.

Based on Bankrate’s analysis of policies with $250,000 in dwelling coverage, the most expensive carriers were Farmers, Chubb, and Allstate while Erie and USAA had the cheapest average home premiums for this coverage amount. Below you’ll find premium data provided by Quadrant Information Services for different coverage selections from some of the largest carriers by market share.

Top five least expensive companies for home insurance

What are some indicators that it’s a good time to shop around for a new home insurance policy?

Kenneth Chavis IV

Senior wealth advisor atVersant Capital Management

“It may be a good time to shop around if you are questioning your premium costs, are unhappy with your insurer’s service or you simply know you may be able to get the same coverage at a lower cost with a different insurer due to a discount like bundling or some other factor.”

What affects my homeowners insurance rate?

The purpose of insurance is to share financial risk with another entity (an insurance provider), making a potential loss more manageable for the policyholder. Factors that increase or decrease the amount of risk the insurance company assumes can heavily influence insurance premiums. Understanding the most influential factors that impact your home insurance rates may help you save money when purchasing a new home or starting a policy with a new insurance provider.

How to estimate the cost of insurance

Ultimately, the goal of home insurance is to help you rebuild your home and replace your personal property after a covered claim. The best way to estimate your home insurance cost is by getting an accurate account of how much coverage you need in the event of a total loss and evaluating your level of risk. To calculate how much coverage you need, you will need the following information:

• Estimate the replacement cost value (RCV) of your home
• Estimate the replacement cost of any detached structures on your property, such as sheds, fences and garages
• Estimate the cost to replace your personal property. This includes any items not permanently attached to your home, from clothing and furniture to appliances and electronics

Next, take a look at what additional risk can impact your home. These risks can take the form of liability concerns or potential physical hazards. Reviewing coverage concerns with your agent, along with estimates of the values noted above, will help you get an accurate estimate of homeowners insurance from multiple carriers.

Every homeowners insurance policy provides specific protections which help guard against substantial financial loss due to fire, storms, theft, vandalism and legal liability. The most common home insurance coverage types include:

• Dwelling coverage, equal to your home’s rebuilding cost: This pays for covered damages, up to your dwelling coverage limit, that affect your home’s primary structure and attached structures such as carports or garages. This coverage is typically set at replacement cost value.
• Other structures coverage, usually 10–20 percent of your dwelling coverage limit: This coverage provides property damage protection for structures not attached to your home, such as a detached garage, driveway, fences or shed.
• Personal property coverage, usually 50–75 percent of your dwelling limit: This protects the contents of your home, including clothing, furniture and electronics. Within your personal property coverage, you may have additional sublimits. For example, you may only have 10 percent of your personal property coverage for items stored at other locations, and you may have a cap on coverage for certain items, like fine art and jewelry. You may have the option to choose between replacement cost coverage or actual cash value coverage. Replacement cost policies are typically more expensive than actual cash value policies.
• Personal liability coverage, usually between $100,000 and $500,000: This pays for medical expenses or damage to others’ property if you are legally liable for injuries on your property, incidents that happen away from your property or damage to others’ property. It also covers legal fees if a lawsuit is brought against you by the injured party.
• Medical payments coverage, usually between $1,000 and $5,000: This covers the medical expenses for someone outside your household who is injured on your property, regardless of fault.
• Loss of use coverage, usually between 10–30 percent of your dwelling coverage: This provides coverage for additional living expenses should you need to temporarily stay elsewhere while your home is being repaired after a covered claim. Common expenses covered are lodging, food and laundry services.

Not every homeowners insurance policy contains the same components. If you are unsure what your policy covers, talk to your agent or insurance company for clarification.

How are home insurance rates changing?

Generally, home and auto insurance premiums have been increasing post-pandemic, partly due to inflation. As building material prices and labor costs continue to rise, home insurance carriers must raise premiums to cover their increased claims expenses.

Also, according to Triple-I, the effects of climate change may directly impact home insurance costs. Damage from wildfires, tornadoes, hurricanes and floods costs more each year, causing some insurance companies to limit their coverage in high-risk areas. The National Centers for Environmental Information recorded 60 natural disasters over the past three years that caused over $1 billion dollars in damage each. After adjusting for inflation, damage from billion-dollar disasters from the past three years averages out to $149.2 billion per year.

Understanding home insurance rate trends may be integral in finding a policy that fits your needs and budget. See the carrier comparison tool below to compare average homeowners insurance rates for $250K in dwelling coverage from 2021 to today.

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Home insurance industry trends

The home insurance market has faced several challenges in recent years and with 2024 well underway, we are better able to see the ripple effects. Insurance is reactionary — it takes some time for insurance companies to recoup losses (in the form of increased premiums) caused by inflation, widescale extreme weather-related disasters and other complex challenges.

Insurance companies must file for rate increases with the Department of Insurance in each state where they operate, and this can cause a lag between the cause of the rate increase and the actual rate increase itself. Inflation has slowed but the cost of building materials and labor is projected to remain elevated, meaning the cost to repair and rebuild homes might not decrease anytime soon.

How to reduce the cost of homeowners insurance

Homeowners insurance is a good way to shield your finances from sudden misfortune in many cases, but it can have a large impact on your budget. Thankfully, there are ways to save on your homeowners insurance premium, which could help you get the valuable protection you need at a price that works with your wallet. If you need to lower your home insurance bill, consider taking the following steps:

• Bundle your auto and home policies: Most insurance companies offer a discount to homeowners who also insure their cars with them. You may save even more if you need other insurance products, such as motorcycle, RV or even life insurance, where available.
• Compare home insurance quotes: Shopping around and comparing homeowners insurance quotes from three or more companies could help you find the coverage you need at the most competitive price. However, if a company offers a rate drastically lower than what you are currently paying, ensure all coverage levels and deductibles are the same.
• Ask for discounts: Bundling is not the only way to save. Insurers generally have multiple discounts you can apply to your policy. For instance, if you remain claims-free for a certain period of time, you may be able to lower your premium. Or, if you install a home security system, your insurer may offer a discount. Speaking with a representative from your home insurance company can be a good way to help you identify any new savings opportunities.
• Choose appropriate home coverage types: Understanding which type of home insurance is right for you, which optional coverage types you need and what policy limits are best for your situation could help you prevent over- or under-insuring your home.
• Improve your credit score: Most states take your credit into consideration when you purchase home insurance. Homeowners with lower credit scores have a higher statistical likelihood of filing claims and, as such, usually pay higher rates. Consider contacting your insurance agent and asking for a policy review when your credit score has moved into a better placement — this may drastically lower your policy premium.
• Work with an independent agent: Independent insurance brokers usually charge a brokerage fee on top of your home insurance premium. However, they work with several carriers and only make money by keeping you as a customer. This creates an incentive for them to work hard to find you the best policy, which could save you more than when working with a direct carrier.
• Renovate your home: Some home renovations, like getting a new roof or replacing old, out-of-date electrical or plumbing systems, can help lower your premium. These projects could reduce the risk of home damage, which, in turn, may save you money on insurance.
• Green discounts: Some insurance companies offer discounts to homeowners that make eco-friendly home improvements. Energy efficient homes may be eligible for a Leadership in Energy and Environmental Design (LEED) discount as well as qualify for certain tax credits and incentive programs. These options vary by state and carrier.
• Increase your home insurance deductible: Your deductible is the amount of a claim you are willing to pay out of pocket. Most homeowners insurance policies have a minimum $1,000 deductible, although $500 deductibles may be an option with some companies. The higher your deductible, the lower your premium, but the more you’ll pay out of pocket if you file a claim. If you are considering raising your deductible to save money, experts recommend speaking with an agent to talk through all your options.

Methodology

Base profile

Bankrate utilizes Quadrant Information Services to analyze the latest rates from February 2024 for ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on 40-year-old male and female homeowners with a clean claim history, good credit. Our base profile includes the following coverage limits:

• Coverage A, Dwelling: $250,000
• Coverage B, Other Structures: $25,000
• Coverage C, Personal Property: $125,000
• Coverage D, Loss of Use: $50,000
• Coverage E, Liability: $300,000
• Coverage F, Medical Payments: $1,000

Credit: Rates were calculated based on the following insurance credit tiers assigned to our homeowners: “poor, average, good (base), and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. The following states do not allow credit to be a factor in determining home insurance rates: California, Maryland, Massachusetts.

Claims: Rates were calculated based on the following insurance claims assigned to our homeowners: fire ($80,000 loss), liability ($31,000 loss), theft ($5,000 loss) and wind ($12,000 loss).

Year built: Rates were calculated based on the following years built for homes and assigned to our homeowners: 1959, 1982, 1992, 2010, 2016 (base) and 2020.

Various dwelling coverage limits

Bankrate utilizes Quadrant Information Services to analyze the latest rates from 2024 for ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on 40-year-old male and female homeowners with a clean claim history, good credit and the following coverage limits:

• Coverage A, Dwelling: $350,000, $450,000
• Coverage B, Other Structures: $35,000, $45,000
• Coverage C, Personal Property: $175,000, $225,000
• Coverage D, Loss of Use: $70,000, $90,000
• Coverage E, Liability: $300,000
• Coverage F, Medical Payments: $1,000

Unless otherwise noted, the homeowners also have a $1,000 deductible and a separate wind and hail deductible (if required). Depending on your dwelling coverage limit, you may need to have a higher deductible.

These are sample rates and should be used for comparative purposes only. Your quotes will differ.