What Is the Average Cost of Homeowners Insurance?

You should know what you can expect to pay when it comes to getting homeowners insurance. Here is the average cost of homeowners insurance.

Buying a home is an exciting life event that people look forward to for years. The saving, dreaming, and house-hunting all pay off when you finally have the keys to your new home.

However, one thing that new homeowners shouldn’t overlook is homeowners insurance. Along with your mortgage payment, it can add a monthly payment that you need to factor into your budget. 

What is the average cost of homeowners insurance? Keep reading our guide to find out. 

The Average Cost of Homeowners Insurance

The national average annual cost of homeowners insurance is $1249, according to the National Association of Insurance Commissioners. That makes the average monthly payment slightly over $100. 

However, homeowners insurance costs can vary state by state. Just because the average is $1249 doesn’t mean you are guaranteed that rate based on where you live.

In 2018, the cost ranged from $400 a year in some states to $2000 a year in other states. Florida, Texas, Oklahoma, Louisiana, and Rhode Island had some of the most expensive policies.

The states with the least expensive policies included Arizona, Delaware, Idaho, Utah, Oregon, Nevada, Wisconsin, and Ohio. The rest of the states were closer to the national average cost.

Cost Factors by State

What makes some state’s homeowners insurance policies more expensive than others? Several factors are considered, including:

  • Extreme weather and likelihood of storms
  • City population density
  • Proximity to forested areas prone to fires
  • Car accidents rates
  • Proximity to fire stations
  • Crime rates

Along with state differences, homeowners insurance policies can also be drastically different between zip codes within the same state. Plus, there are other factors that insurance companies consider when pricing your policy, which we’ll look at next.

Other Factors That Determine the Cost of Your Homeowners Insurance

Location is only one aspect of your homeowner’s insurance policy cost. From the coverage range to the material your home is made out of, insurance companies factor in several things to determine your final cost.

Insurance Coverage Range

The more range of coverage your policy covers the higher your premium will be. If your home’s insured value is less than $50,000, you could have a monthly payment of around $50. 

On the flip side, if your home’s insured value is over $500,000, your monthly premium will be closer to $200.    

Past Insurance Claims

If you live in an area where homeowners insurance claims are often filed, your insurance company will give you a higher premium. Additionally, they will check your personal claim history. If you have filed several insurance claims in the past, your cost will go up. They will also check your credit history.

Home Specs

Several specs of your home, like its age and the material it’s made with. For instance, an older home has older piping, wiring, and plumbing. Since it’s more at-risk of damages, your insurance company will charge more to insure it. 

Insurance companies prefer copper wiring and may not even cover you if your home has aluminum wiring. 

Asphalt roofs are also more expensive to cover than metal or tile roofs. Any materials that are more prone to terminate damage, rotting, or fires, make your home more expensive to cover.


If you have pets, insurance companies will assume they will cause damage to your home. The nice thing is that this damage is covered, but it does raise your rates. Having a more aggressive dog breed can also spike your premium. 

Attractive Nuisances

The fancier your property is, the more it costs to insure. If your home has a treehouse, hot tub, pool, or trampoline, your insurance company counts it as a potential hazard.

They call these additions “attractive nuisances,” and the more you have, the more coverage you will need. 

What Does Homeowners Insurance Cover?

Under your homeowner’s insurance policy, you have six basic areas of coverage:

  • Dwelling coverage
  • Personal property coverage
  • Loss-Of-Use coverage
  • Medical payments coverage
  • Other structures coverage
  • Personal liability coverage

Some homeowners feel adequately protected with standard coverage, but others want to add supplemental coverage for more protection. Each addition you add can raise your monthly premium.

There are several types of supplemental coverage, including:

Equipment Breakdown Coverage

If an electrical or mechanical failure causes your appliances to stop working, your insurance company will pay for it when you have this type of supplemental coverage. It only costs up to $50 per year to add this to your policy.

Water Backup Coverage

If your sewer, sump pump, or drain gets backed up, supplemental water backup coverage can take care of the costs of repairs. On average, this add-on costs up to $70 a year for around $5,000 of coverage.

Identity Theft Coverage

Did you know that your homeowner’s insurance can help you recover your identity if it gets stolen? It’s true, your policy could help cover legal fees, ID replacement, and more when you have this extra coverage. 

Extended Replacement Cost

If your home needs to be repaired or even completely rebuilt, your insurance policy will help cover it. This add-on guarantees that your insurance company will pay for repairs even after you’ve exceeded your coverage limit.

For an extra $50 a year, you can get an extra 50% of dwelling coverage.

Home Business Coverage

Your standard coverage protects your home business to an extent, but if you want better coverage, you should consider supplementing with home business coverage. 

If you have employees or clients using your home for business, this policy will cover any potential accidents or injuries. 

Understanding Home Owner’s Insurance

Hopefully, this guide made the average cost of homeowners insurance more clear to you. Now, you can determine what kind of coverage you need and want.

Along with all of the factors mentioned here, the insurance company you go with also impacts your final cost. It’s a good idea to shop around for the best premium for the coverage you want.

For more finance and home resources, check out our other blogs. 

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