How much does home insurance cost per year

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The average home insurance cost is $2,777 per year nationwide for a policy with $300,000 in dwelling coverage and liability and a $1,000 deductible, based on 2022 Insurance.com data.

At a dwelling coverage of $200,000, the average rate is $2,233, while a policy with $500,000 in dwelling coverage averages $3,594.

Homeowners insurance rates are impacted by age and size of the home, claim history, cost of construction materials, and also by location. Read on to compare home insurance rates by insurance company, state – even down to ZIP code – and find out what you can expect to pay for the coverage you need.

IN THIS ARTICLE

• How much does home insurance cost?
• Average home insurance cost by ZIP code
• How much is homeowners insurance per month?
• How to get a home insurance estimate
• Best home insurance companies
• Frequently asked questions: Homeowners insurance rates
• Methodology

How much does home insurance cost?

Although the national average rate for home insurance is $2,777, the cost varies by coverage levels and location. Homeowners insurance is most expensive in Oklahoma at $5,317 a year and cheapest in Hawaii at $582 a year.

Here are the nationwide average annual costs in 2022 for homeowners insurance at several coverage levels, all with a $1,000 deductible:

Average Home Insurance Cost by Coverage LevelAverage rateDwelling coverageLiability$2,218$200,000$100,000$2,233$200,000$300,000$2,762$300,000$100,000$2,777$300,000$300,000$3,215$400,000$100,000$3,231$400,000$300,000$3,580$500,000$100,000$3,594$500,000$300,000$3,823$600,000$100,000$3,839$600,000$300,000

Home insurance rate calculator

Using our home insurance calculator below, you can compare average home insurance rates by ZIP code for 10 different coverage levels. Just enter your ZIP code to get started.

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HOME INSURANCE CALCULATOR

Average home insurance rates in CALIFORNIA

Zip

Dwelling

$200,000

Deductible Choose the amount you want to pay out-of-pocket before insurance kicks in. This applies to your dwelling and personal belongings claims.

$1,000

Liability Covers the medical expenses of people who are hurt while in your home or on your property, as well as damage you caused to others’ property. Also covers legal fees if you are sued by someone hurt in your home or on your property. Limits of $300,000 or $500,000 are recommended.

$100,000

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94404 - Foster City

Dwelling $200,000, Deductible $1,000 and Liability $100,000.

AVERAGE RATE: $797

HIGHEST RATE: $1,179 LOWEST RATE: $496

Most & least expensive zip codes for homeowners insurance in California

Most Expensive

Least Expensive

• Methodology ×

  Insurance.com commissioned Quadrant Information Systems to field home insurance rates from major insurers in each state for nearly all ZIP codes in the country for 10 coverage levels based on various dwelling and deductible limits. The homeowner profile is a 35-year-old married applicant with excellent insurance score; new business HO3 policy for house built in 2000 with frame construction and composition roof. Other Structures: 10%. Loss of Use defaulted: 10%. Guest Medical limit: $5,000. Personal property: 50% of dwelling coverage for replacement value.

  METHODOLOGY +

Average home insurance cost by ZIP code

Insurance.com’s analysis of 2022 rates found the highest homeowners insurance rates in ZIP code 77471, Rosenberg, Texas.

ZIP codes in Weatherford, Oklahoma, and Hubert, North Carolina rank second and third, respectively.

We looked at home insurance estimates by ZIP code across the country to find the highest average rate for home insurance in each state as well as the least expensive average rate for home insurance.

The top 10 most expensive locations by ZIP code based on 2022 data are:

Homeowners Insurance Rates by ZIP codeZIP codeStateCityAverage annual premium77471TexasRosenberg$6,63873096OklahomaWeatherford$6,30828539North CarolinaHubert$6,14367861KansasLeoti$5,84868861NebraskaOdessa$5,73388135New MexicoTexico$5,48429585South CarolinaPawleys Island$5,41581041ColoradoGranada$5,05739576MississippiWaveland$4,790

The top 10 least expensive ZIP codes for home insurance are:

Top Least Expensive Locations for Home InsuranceZIP codeStateCityAverage annual premium96813HawaiiHonolulu$57994086CaliforniaSunnyvale$1,0041342MassachusettsDeerfield$1,1788504New JerseyBlawenburg$1,2395439VermontColchester$1,24119808DelawarePike Creek$1,25020852MarylandNorth Bethesda$1,32299835AlaskaSitka$1,32898383Washington D.C.Chico$1,377

How much is homeowners insurance per month?

On average, home insurance costs about $231 per month, but the price depends on the coverage level.

Monthly Average Homeowners Insurance CostAverage rateDwelling coverageLiability$185$200,000$100,000$186$200,000$300,000$230$300,000$100,000$231$300,000$300,000$268$400,000$100,000$269$400,000$300,000$298$500,000$100,000$300$500,000$300,000$319$600,000$100,000$320$600,000$300,000

How to get a home insurance estimate

There are many variables to consider when working up a homeowner insurance estimate, and we’ll break it down into a few easy steps.

Step 1: Estimate how much dwelling coverage you need

Step 2: Decide how much homeowners liability you need (and medical payments)

Step 3: Choose additional coverage options

Step 4: Choose a deductible

The limits of your coverage for the following are typically a set percentage of your dwelling coverage limit as shown below:

• Other structures – 10%
• Personal property – 50% (you choose between replacement value or actual cash value)
• Loss of use – 20%

So, how do you decide the coverage amounts and additional coverage? We'll explain that next.

Step 1: Estimate how much dwelling coverage you need

Your dwelling coverage should equal the cost to repair damage to your home or rebuild it completely at equal quality — at current prices. This is called the replacement cost. Figuring out how to calculate home replacement cost can be a challenging task, but can be done by making a thorough inventory of building materials used for your home, using online calculators, or, you can hire an appraiser to do it for you.

When buying homeowners insurance, you should get enough dwelling coverage to match the full replacement cost of your home.

Step 2: Decide how much homeowners liability you need (and medical payments)

Most home insurance policies come with $100,000 in personal liability insurance but this is rarely enough coverage. The cost to defend a lawsuit or to pay for medical expenses for a serious injury can easily exceed that amount. Most experts recommend upping your limits to at least $300,000.

Liability insurance pays out when you or a family member are legally responsible for others’ injuries or property damage. Personal liability also covers legal fees if you are sued, as well as any resulting judgments from a lawsuit, up to your policy limits.

Medical payments coverage pays for injuries to guests in your home, regardless of who is at fault. Medical payments differs from liability insurance in significant ways, primarily in that it is for minor incidents and comes in very low limits of $1,000 or $5,000. The latter amount of $5,000 is recommended.

Step 3: Choose additional coverage options

With the basics in place, you can look at the options available from the insurance company. Common add-ons and home insurance endorsements you might want to consider are:

• Upgrading to higher or guaranteed replacement cost
• Upgrading personal property coverage to replacement cost
• Water and sewer backup
• Riders on high-value items such as jewelry and art

Some companies offer upgrade packages that include the most popular options for one price.

Step 4: Choose a deductible

The deductible is your share of the repair cost when you file a claim. Your home insurance premium will be lower if you choose a high deductible. If you have a $500 deductible, you're going to pay more on your premiums than if you have a $2,000 deductible.

Going with a higher deductible will save you money. It will also mean you pay more out-of-pocket if there’s a claim. That’s why it’s important to know the trade-off you’re making – and be comfortable with it -- when choosing a home insurance deductible.

Best home insurance companies

With every type of insurance coverage, it's true that the cheapest policy isn't always the wisest choice. You want an insurance company that is financially healthy and that has a good reputation for service.

Insurance.com’s ranking provides an in-depth look at the best home insurance companies in 2022, based on a number of factors. Insurance.com ranked the major insurance companies for average price, J.D. Power rating, A.M. Best rating, and the number of discounts offered. Here are the results of that analysis.

Best Home Insurance CompaniesCompany NameStar ratings (out of 5)USAA4.8State Farm4.5Auto-Owners4.3AIG4.1Progressive4.1Allstate4Nationwide4Erie3.9American Family3.8Chubb3.8Travelers3.7Farmers3.2

Of course, the best homeowners insurance company for you will depend on personal factors. That’s why it’s best to compare policies and quotes for your specific needs before you choose a company.

Frequently asked questions: Homeowners insurance rates

Why are rates so low in some areas?

There are a number of reasons why home insurance is cheaper in some places than others. Factors that make a ZIP or city cheaper for home insurance include:

• Few major weather-related losses.
• A low crime rate.
• Relatively few major liability lawsuits.
• Many well-organized neighborhood watch groups.

While every state has areas where rates are cheaper, there are also reasons why a state like Hawaii has such low rates overall.

“One major factor in Hawaii is the fact that most standard homeowner insurance policies do not cover hurricane damage. Hurricane Iniki, which hit in 1992 did so much damage that the majority of insurers excluded hurricane damage from their coverage. Homeowners in Hawaii now have to purchase a separate hurricane damage policy,” says Michael Barry, spokesman for the Insurance Information Institute.

Why are home insurance rates so high in some areas?

It’s likely no surprise that many of the most expensive ZIP codes for home insurance are in states that experience lots of severe weather. The most expensive ZIPs in Louisiana, Mississippi, Alabama, Texas, and Florida are coastal areas prone to catastrophic storms. Texas. In states like Kansas and Oklahoma, tornadoes and other storms play a part. Naturally, the more claims paid out by insurers for damage due to wind, hail, and flooding, the higher home insurance rates will be for everyone.

“Homeowner rates are based on actual and anticipated losses across the state so if a state is prone to natural disasters, it will push up the cost of insurance for everyone in the state,” Barry says. “It will have the biggest impact on areas where natural disasters tend to hit most often, coastal areas for example.”

What are some ways to lower homeowners insurance rates?

Here are some ways to reduce the cost of homeowners insurance:

• Bundle home and auto insurance to save more
• Shop around for a better deal
• Increase deductibles
• Remove risks such as trampolines from home
• Maintain a good credit score

Remember you can lower your rate by making sure you receive all the home insurance discounts for which you qualify. For example, buying your home insurance from the same company that covers your cars, called bundling, can save you an average of 19%.

How are homeowners rates calculated?

The biggest factors influencing the cost of homeowners insurance are:

• Your home’s location. Allows the insurance company to look at the risk factors in that area.
• Your home’s value. Bear in mind that the value for insurance isn’t the same as the market value.
• Cost to rebuild. The cost to rebuild your home if it were completely destroyed.
• Construction costs. Local construction costs, including building materials availability and price, and building regulations, among other factors.
• Your home’s age. Older homes may have more risks, such as outdated wiring.
• Risk exposure. Risk exposure on your property, for instance, from a swimming pool, trampoline, guest house, or aggressive dog breed.
• Fire protection. Your neighborhood’s fire protection rating, or, how close your home is to a fire station.
• Claim history. Your personal and neighborhood claims history, as well as the previous homeowner’s claim history
• Insurance score. Your insurance score is based, in part, on your credit score (only three states don’t allow this – Massachusetts, Hawaii, and California; Maryland doesn’t use credit for home rates but does for auto rates)

For more information on how home insurance rates are determined, review some of the main factors affecting your home insurance rate. You can also use the home insurance calculator below to see what average rates are in your neighborhood.

Methodology

Insurance.com compared homeowners insurance rates in 2022 provided by Quadrant Data Solutions for dwelling coverage ranging from $200,000 to $600,000 with liability limits of $100,000 and $300,000 and a deductible of $1,000 for all available ZIP codes. ZIP codes were ranked based on the average rates for dwelling coverage of $300,000, liability coverage of $300,000, and a $1,000 deductible and include all credit ratings.

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