Average Cost Of Homeowners Insurance In 2025

How much does homeowners insurance cost? It’s one of the first — and most important — questions homeowners ask when protecting their property. In this article, we’ll break down exactly how much you can expect to pay based on where you live, your home’s features, and other personal risk factors.

Having worked in the insurance industry for over 15 years, I’ve seen how easily people can overpay — or worse, underinsure — simply because they didn’t understand the key pricing drivers. Not having the right coverage could leave you financially exposed in a crisis, so let’s look at what you really need to know before choosing a policy.

The replacement cost is generally the coverage you carry for your home. Often referred to as Coverage A or Dwelling Coverage, it provides protection for the structure of your home and anything attached to it, such as an attached garage or carport. The amount you carry for Coverage A will determine the limits for some other coverages on the policy.

For this reason, it’s essential to ensure you have the correct coverage for your home. In addition, you don’t want to lack the coverage you may need if you experience a loss. A recent survey conducted by the American Property Casualty Insurance Association finds that nearly two-thirds of all homeowners may be underinsured.

It’s wise to periodically check that your coverage is rising along with inflation and notify your insurer if you make any updates to your home.

Average Homeowners Insurance Cost – By State

Homeowners insurance premiums vary widely across the U.S., primarily due to localized risks, construction costs, and state-level regulations. Insurers base rates on the likelihood of a loss in a given area and the estimated cost of rebuilding a home.

For example, states like California face wildfire risks, while coastal states like Florida deal with hurricanes. Meanwhile, in states like Mississippi, lower labor and construction costs reduce overall premiums.

Why Insurance Costs Vary by State

Several key factors impact home insurance rates across states:

• Weather risks: States prone to hurricanes, wildfires, hail, or tornadoes often see higher rates.
• Rebuilding costs: Labor and material costs differ from region to region — for example, it’s cheaper to rebuild in Mississippi than in New York.
• Insurance regulations: States regulate the insurance market differently, impacting what coverages are mandatory and how prices are structured.

Five Cheapest States for Homeowners Insurance

Lower premiums in these states are often due to limited risk exposure or coverage exclusions. For example, Hawaii policies typically exclude hurricane coverage, which must be purchased separately — lowering the cost of standard coverage.

Five Most Expensive States for Homeowners Insurance

Higher-risk states see increased premiums due to frequent natural disasters, severe weather, and widespread damage potential.

Average Cost of Home Insurance by City

Insurance companies use detailed geographic pricing models, often down to the ZIP code, to reflect localized risk, such as fire exposure, theft rates, and construction costs.

For example, San Francisco has among the highest rebuilding costs in the U.S., which drives up premiums despite California’s lower average.

Average Homeowners Insurance Cost – By Dwelling Coverage Amount

The biggest driver of your home insurance premium is going to be the dwelling amount.  The dwelling amount is typically your home’s replacement cost, which is determined by its specifics. Insurers will use a special replacement cost calculator to determine how much it would cost to rebuild your home.

Even carrying the same dwelling limit, the price of home insurance will vary by company. Different prices may also be charged due to other factors such as zip code, claims history, the condition of the home, roof age, safety features, or applicable discounts added. To ensure you are getting the lowest price, it’s best to shop around.

Average Homeowners Insurance Cost – By Claims History

While homeowners insurance protects against losses such as fire, theft, and water damage, filing multiple claims can lead to higher premiums. Insurers view claim history as a strong indicator of future risk and price policies accordingly.

If you’ve filed more than one claim in recent years, you may be considered higher risk, even if the claims were legitimate. As a result, your premium could increase significantly after each additional claim.

Average Homeowners Insurance Cost – By Home Age

The age of your home plays a significant role in determining your insurance premium. Older homes often come with:

• Outdated wiring or plumbing
• Wear and tear on roofing and structural components
• Higher rebuild costs due to older materials or architectural details

Insuring newer homes typically costs less because they are built to modern codes, contain safer materials, and often include advanced safety systems such as sprinkler systems, water sensors, and security alarms.

Home Insurance Costs – By Deductible Amount

Your deductible is the amount you pay out-of-pocket before insurance kicks in on a covered claim. Choosing a higher deductible reduces your premium because you’re taking on more of the financial risk.

A higher deductible can help lower your premium, but it’s essential to choose an amount you can comfortably afford in the event of a loss. Deductible options typically range from $250 to $2,500, though some insurers offer higher limits.

What Companies Offer the Cheapest Homeowners Insurance?

While most insurers consider similar rating factors — like your home’s age, location, claims history, and dwelling coverage — how they weigh those factors can differ significantly. Some companies may put more emphasis on credit score or roof type, while others may offer better discounts for smart home features or bundling.

This is why shopping around is essential. Even with identical coverage, premiums can vary widely from one insurer to another.

Here are some of the cheapest homeowners insurance providers in 2023, based on a $200,000 dwelling coverage amount:

As with other types of insurance, your homeowners premium is calculated using a wide range of variables — from your home’s age and construction to your location, deductible, credit score, and even your dog’s breed.

While each insurer weighs these factors differently, here are the most common elements that determine how much you’ll pay for homeowners insurance:

Location

Location is one of the most important rating factors. Insurance companies assess the weather risks, crime rates, and proximity to emergency services when pricing policies.

• Homes near fire hydrants or professional fire stations may receive lower rates.
• Properties in areas prone to hurricanes, wildfires, or tornadoes often pay more.
• High-crime areas may trigger rate hikes due to theft or vandalism risk.

Type of Home

Multi-family homes and properties with more kitchens, floors, or unique architectural features typically cost more to insure than a standard single-family home. Larger and more complex structures are more expensive to rebuild, increasing the risk for insurers.

Home Size

The larger the home, the higher the replacement cost — and the higher the premium. For example, a 4,000-square-foot home will require more materials and labor to rebuild than a 1,500-square-foot home.

Roof Construction

Roof material, shape, and age are major underwriting considerations. A roof in poor condition or made from less durable materials (like wood shake) can lead to higher premiums or denied coverage.

• Fire-resistant and hail-resistant materials may qualify for discounts.
• A newer roof generally results in lower premiums.

Home Characteristics

High-end features like crown molding, atrium windows, and ornate detailing increase your home’s replacement cost. Homes with rare or luxury finishes will cost more to insure than homes built with standard materials.

Potential Liabilities

Anything that increases the chance of a liability claim can raise your rates. Common examples include:

• Swimming pools
• Trampolines
• Fire pits
• Treehouses
• Certain dog breeds

Trampolines alone account for over 100,000 injuries annually, with hundreds resulting in long-term neurological damage. Many insurers surcharge or exclude them entirely.

Claim History

The more claims you’ve filed, the more expensive your insurance becomes. Insurers often offer claim-free discounts to homeowners with no recent losses, while frequent claimants are labeled high-risk.

Tip: Avoid filing minor claims when possible — reserve your coverage for catastrophic or unaffordable losses.

Insurance Company

Each insurer evaluates risk differently. Some emphasize credit scores; others weigh roof condition or dog ownership more heavily. Base rates, available discounts, and underwriting rules also vary widely by company.

Credit Score

Many insurers use a credit-based insurance score to predict loss likelihood. Lower credit scores are associated with a higher risk of claims.

Some states, like California, Massachusetts, and Michigan, prohibit the use of credit scores in rate-making. In other states, the difference in cost can be significant.

Deductible

Remember that the higher deductible you choose, the lower your price of insurance will be. This is because you are shouldering more of the responsibility in a loss, which means your insurance company doesn’t have to pay as much. You are retaining more of the risk yourself.

Consider someone who has a $2,500 deductible on their home insurance. They aren’t going to be filing claims for any loss less than this amount. The insurance company is saving money by not having to worry about those smaller claims.

Home Age

Older homes often come with higher risks:

• Outdated electrical systems (e.g., knob-and-tube wiring)
• Lead paint or asbestos
• Poor roof condition

Upgrading these features can improve safety — and lower your premium.

Dogs & Other Animals

Certain dog breeds are considered high-risk and may be excluded from coverage altogether. Even one bite-related claim can cost thousands in medical bills or legal fees — which is why insurers take pet ownership seriously.

According to the CDC, 4.5 million dog bites occur annually in the U.S., with over 800,000 requiring medical treatment.

Additional Structures

Detached garages, barns, and sheds are covered under the Other Structures portion of your policy — typically 10% of your Dwelling limit. If that’s not enough, you’ll need to increase coverage, which can raise your premium.

Building Materials and Upgrades

Upgrades increase your home’s value and replacement cost. Renovations often require a coverage increase — and potentially temporary coverage for building materials during construction.

If you’re remodeling, notify your insurer in advance to ensure you’re properly covered.

What Could Make Homeowners Insurance Go Up?

If your homeowners insurance premium went up this year, you’re not alone. While filing a claim is the most obvious reason for a rate increase, many other factors — including ones outside your control — can cause your costs to rise.

Here are the most common reasons for homeowners insurance rate increases:

Filing a Claim

Submitting a claim, especially for fire, water, or liability, often results in a higher premium at renewal. Frequent claims or high-dollar losses make you appear riskier to insurers.

Aging Home

As your home gets older, major systems like your roof, plumbing, and electrical wiring become more prone to failure — which increases your risk profile. Insurers raise rates accordingly to reflect this higher likelihood of loss.

Inflation

Rising material and labor costs increase your home’s replacement cost — the amount needed to rebuild it. If your insurer updates this value (or includes inflation protection), your premium will also rise.

Extreme Weather and Catastrophes

Even if your home hasn’t suffered damage, widespread events like hurricanes, wildfires, or hailstorms in your region can drive up prices. Insurers spread the cost of large-scale payouts by adjusting rates across policyholders.

Supply Chain Disruptions

Delays or shortages in construction materials can lead to higher repair costs and longer rebuild times. This increased cost exposure may prompt insurers to raise premiums preemptively.

Industry-Wide Rate Filings

Insurers periodically submit rate filings to state regulators when they need to adjust pricing models. Even if you haven’t filed a claim, your insurer may raise rates across the board to maintain profitability.

How Much Homeowners Insurance Do You Need?

The amount of homeowners insurance you need should be based on your home’s replacement cost — not its market value. Replacement cost is the amount it would take to rebuild your home from the ground up, using similar materials and labor in your area.

Most insurers (or agents) offer replacement cost calculators to help you estimate this figure.

What to Include in Your Coverage

Once your dwelling coverage is set, other parts of your policy (like personal property or other structures) are typically calculated as a percentage of that amount. However, you’ll need to make a few custom choices:

• Liability coverage – Start with at least $300,000, especially if you have pets, a pool, or higher net worth. Umbrella insurance can offer additional protection.
• Medical payments to others – Consider $5,000 or more to cover small injuries on your property.
• Unique features – Notify your insurer of any custom details (e.g., stonework, built-ins, high-end finishes) so they’re factored into the rebuild estimate.

What Are the Types and Limits of Homeowner Insurance?

A standard homeowners’ policy is an HO-3 Special Form, which refers to the type of events it will provide coverage for. The structure of the home is usually covered on an open-peril basis, which means it covers anything that could possibly happen, unless it’s specifically excluded.

The personal property portion of the policy is covered on a named peril basis, which means it only covers the events described in the policy. These events typically include the following:

• Fire or lightning
• Windstorm or hail
• Explosion
• Riot or civil commotion
• Damage caused by aircraft
• Damage caused by vehicles
• Smoke
• Vandalism
• Theft
• Volcanic eruption
• Falling object
• Weight of ice, snow or sleet
• Accidental water overflow or steam
• Sudden and accidental tearing apart, cracking, burning, or bulging of certain household systems (e.g. plumbing, heating, air conditioning, etc.)
• Freezing
• Sudden and accidental damage from electrical current

Homeowners may purchase a comprehensive form, or HO-5 policy if they would prefer broader coverage. This policy offers open-perils coverage for both the structure of the home and personal property. But this policy is more expensive than the HO-3 since more coverage is provided.

What Does Home Insurance Cover?

Beyond the events a home insurance policy will cover, you also have the amount of coverage provided. All homeowners policies have two major sections of the policy. Section I focuses on the home and Section II focuses on the homeowner’s liability.

Coverage A – Dwelling Coverage

The main driver of premium is your home’s dwelling coverage. This is seen as Coverage A- Dwelling Coverage on your policy documents, and provides coverage for the structure of your home itself. It also includes anything attached to the home as well.

This limit you carry for this coverage is most often your home’s replacement cost as estimated by the insurance carrier. While you can choose a lower limit, it’s not advised. Especially since the remainder of the coverages in Section I are based on percentages of this limit.

Coverage B – Other Structures

Coverage B- Other Structures is typically 10% of your dwelling (Coverage A) amount and covers anything unattached to your home, such as a detached garage or shed. This limit is provided whether you have any other structures on your property or not. There is no additional premium to carry this coverage as it’s built into the policy.

If you have structures that exceed 10% limit provided, there is an option to purchase additional coverage. However, there is a cost associated with it. Your agent or carrier can help you determine if this is needed and how much extra coverage you may need.

Coverage C – Personal Property

The personal property coverage, also known as Coverage C provides a limit up to 50% of the coverage A limit. It provides coverage for a customer’s property, including furniture, appliances, clothing, and electronics. Some types of property such as jewelry, furs, or silverware are covered as well, but have different sub-limits.

Important: To best illustrate what would be considered personal property, I like to imagine flipping your home upside down. Anything that would fall out would be covered under coverage C!

Coverage D – Loss of Use

Coverage D – Loss of Use is sometimes referred to as Additional Living Expenses coverage. It is generally 20% of the Coverage A amount and pays for additional expenses for you to live elsewhere if your home is unhabitable after a loss. It’s important to note that it will only pay for any additional expenses incurred and not the routine expenses you would have to pay anyway, such as your mortgage or utilities.

Coverage E – Liability

Your liability coverage is noted under Coverage E. This coverage provides protection for bodily injury or property damage you may cause to another person. Insurance companies usually start offering coverage at $100,000 but you can often select limits as high as $1,000,000, depending on the company.

Liability coverage is how your insurance company would defend you against lawsuits if your dog bites someone or if someone is injured on your property. The more assets you have, the higher you will usually want your liability limit to be. This is because you have more to protect against lawsuits. Those with teenage children may also want to increase their liability limits to ensure they have adequate protection in case something happens.

Coverage F – Medical Payments

Medical payment coverage is similar to liability in that it will offer protection for bodily injury that you cause. However, the difference is that this coverage is not intended for acts for which you are legally responsible. Rather, coverage F covers events you may feel morally obligated to take care of.

For example, suppose you have a guest over at your home who trips due to an un-tied shoelace and gets injured. Even if you’re not liable for their injury, you could file a claim through your homeowners’ insurance to pay for their medical bills. The limits offered for this coverage are significantly less than what is offered for liability as you would most often not file a claim this small.

Other Home Insurance Coverages You May Need

In addition to the coverages mentioned above, there are some other coverages one can add to their homeowners’ insurance. One additional coverage is flood insurance. Most home insurance policies specifically exclude flooding, and the only way to have coverage for this type of loss is through purchasing a separate policy.

Earthquake is not a coverage that is commonly offered through a standard home insurance policy and a separate policy would need to purchased for this as well. Like flood insurance, a separate policy can be purchased through FEMA for an additional cost. This can be an important add-on if you live in an area that is affected by earthquakes.

Lastly, one of the most commonly added on coverages to a homeowners policy is sometimes referred to as scheduled personal property endorsement or jewelry rider. As we discussed earlier, some specific types of personal property are subject to sub-limits. This means that you may have a $5,000 bracelet but may only get $2,500 for it if it were stolen.

With a scheduled personal property endorsement, you can insure that $5,000 bracelet for that exact amount. This endorsement also insures items on an all-risk basis, meaning that you would be covered for anything that could happen to it, as long as it’s not excluded. Scheduling your high value items are the best way to insure them.

What Types of Damage Are Not Covered by Homeowners Insurance?

As with any type of insurance policy, there are exclusions, of which you should be aware. The following are some damages you can expect to not be covered by your homeowners insurance:

• Intentional Damage – Damage that you intentionally cause is never covered by insurance. Losses must be accidental or sudden and caused by one of the covered events specified in your policy.

• Flood – As mentioned previously, flood is a peril that needs to be insured under a separate insurance policy through FEMA.

• Pest Infestations – Damage caused by termites, ants, and other pests are not covered under your policy as remediation is considered part of your home’s routine maintenance.

• Earthquake – Any type of earth movement, including earthquake needs to be insured under a separate insurance policy.

• Mold – Generally, homeowners’ insurance policies exclude mold damage. However, there are some cases in which it can be covered, so you should always chat with your agent to confirm.

How to Reduce the Cost of Homeowners Insurance?

After discussing all the ways in which your homeowners’ insurance premium can increase, I’m sure you’re asking yourself how you can reduce the overall cost. Luckily, there are a few things you can do.

• Increase Your Deductible – Remember that the more risk you take on with your deductible, the less your price will be. A standard home insurance deductible is typically $500 but if you can afford a higher deductible in a loss, you can save money every month by increasing your deductible to $1,000 or even $2,500.

• Add Discounts – Confirm you are getting all applicable discounts for which you are eligible. Add additional safety features to the home to get a credit on your policy, such as water detection or burglar alarms.

• Shop Around – Get quotes from other homeowners’ insurance carriers. Since the coverages, deductibles and discounts offered can vary between companies, it’s very likely you may find a lower price elsewhere.

How to Choose the Best Homeowners Insurance

As you’re shopping around for homeowners insurance, you will want to evaluate more than just price. While price should be an important consideration, it shouldn’t be the only one. Here are some additional things you should look at to determine the best homeowners insurance for you.

First, do your research. There is a ton of information online about any specific insurance company, such as financial ratings and customer or claims reviews. These can tell you a lot about a carrier.

Additionally, try to evaluate your coverage needs and let that guide you in your search. For example, you may own expensive art work that you display in your home. Try to find an insurer who offers a personal property schedule for these pieces and is experienced in handling these types of claims.

Lastly, lean on the experts. Licensed independent agents work for you, and not the companies they represent. Let them help you find a company that can best fit your needs at a price you can afford.

Do You Need Homeowners Insurance?

Homeowners insurance isn’t legally required in any U.S. state. However, if you have a mortgage, your lender will almost always require you to carry it — because they need to protect the property they’re financing.

Even if you own your home outright, going without insurance exposes you to serious financial risk. Consider the following scenarios:

• A windstorm causes a tree to fall on your roof
• A guest trips on your stairs and suffers a serious injury
• A fire damages your kitchen and part of your living space

These events may seem rare — but they’re more common than many people realize. According to the Insurance Information Institute:

• Wind and hail account for 45.5% of all homeowners claims
• The average bodily injury liability claim is $31,663

If you don’t have the financial resources to pay for major repairs or a lawsuit out of pocket, homeowners insurance is a critical safeguard.