How Much Does Home Insurance Cost?

Home insurance is one of the largest recurring costs of homeownership, yet most people never shop their policy after the initial purchase. According to the Insurance Information Institute, the average American homeowner pays $2,230 per year — but your neighbor with a similar home might pay $800 less because they chose a different insurer, raised their deductible, or bundled with auto. This guide breaks down costs with real numbers: state-by-state averages, insurer comparisons, and the specific factors that drive your premium up or down.

National Average Home Insurance Cost in 2026

The national average homeowners insurance premium in 2026 is approximately $2,230 per year — about $186 per month — for a standard HO-3 policy with $300,000 in dwelling coverage, a $1,000 deductible, and $100,000 in personal liability. This represents an 8% increase from 2024, driven by rising construction costs, increased catastrophic weather, and higher global reinsurance premiums. However, premiums vary by 310% between the cheapest and most expensive states, and by 40-60% between insurers for the same home. Location, dwelling value, construction type, and claims history are the dominant factors.

State-by-State Home Insurance Cost Comparison

Geography is the single largest determinant of home insurance cost. Below are average annual premiums for a $300,000 dwelling HO-3 policy with a $1,000 deductible:

The gap between Vermont ($1,100) and Oklahoma ($4,500) reflects that catastrophe exposure dominates pricing. If you live in a high-cost state, insurer selection and discount optimization are even more critical because absolute dollar savings from a 15% discount are much larger.

Factors That Affect Your Home Insurance Premium

Understanding what drives your specific premium allows you to take targeted action. Here are the factors insurers weigh, ranked from most to least impact:

• Location (ZIP code): Accounts for 30-40% of your premium. Insurers evaluate coast proximity, wildfire zones, hail corridors, crime rates, and distance to fire stations (5+ miles away adds 10-30%). A home 1 mile from the coast may cost 50-80% more than one 30 miles inland.
• Dwelling coverage amount: Each additional $100,000 in coverage adds $300-$600/year. A $500,000 policy costs 60-70% more than $250,000 for the same location.
• Construction materials: Masonry (brick/stone) reduces premiums 5-15% vs. frame. Concrete block saves up to 20-30% in hurricane-prone states like Florida.
• Roof age and type: Roofs older than 15 years increase premiums 15-35%; many insurers decline homes with roofs over 20 years old. Impact-resistant Class 4 shingles earn 10-28% discounts in hail-prone states.
• Claims history: Tracked in the CLUE database for 5-7 years. One claim raises premiums 9-20%. Two claims in 3 years can push you into surplus lines market (50-200% higher).
• Credit-based insurance score: Used in ~44 states. Poor credit means 40-115% higher premiums. California, Maryland, Massachusetts, Hawaii, Michigan, and Oregon restrict credit-based pricing.
• Deductible level: $2,500 deductible saves 10-20%; $5,000 saves 20-35%. Coastal states often require separate 2-5% wind/hail deductibles.
• Distance to fire services: Homes beyond 1,000 feet from a hydrant or 5 miles from a station face 10-30% surcharges.

Home Insurance Cost by Insurer

Insurer pricing varies significantly for the same home. The following table shows average annual premiums for a $300,000 dwelling, $1,000 deductible HO-3 policy from major national carriers:

USAA offers the lowest premiums but is limited to military families. Erie Insurance provides the best value for consumers in its 12-state coverage area. State Farm offers competitive national rates with local agent convenience. Allstate and Farmers have higher base premiums but strong bundling discounts that can bring total cost below competitors when combined with auto.

Premium Differences by Home Value

Dwelling coverage amount directly drives premium. Below are typical annual premiums at three levels, based on a Midwest location with standard risk factors:

The cost per $1,000 of coverage decreases as dwelling amount increases because a large portion of the premium covers fixed costs (liability, administrative overhead, catastrophe reserves). A $600,000 policy costs roughly 2.7 times a $200,000 policy — not 3 times. Higher-value properties get more cost-effective coverage per dollar.

How Your Deductible Affects Cost

Your deductible — the amount you pay out of pocket before insurance kicks in — is the most immediate lever you have to lower your premium. A $500 deductible adds 15-25% to your premium vs. the standard $1,000 level. A $2,500 deductible saves 10-20% ($200-$400/year) and is the sweet spot for most homeowners. A $5,000 deductible saves 20-35% ($400-$700/year) but is best for those with emergency funds who can self-insure small claims.

In hurricane and hail-prone states, many policies include a separate percentage-based wind/hail deductible of 2-5% of dwelling coverage. On a $300,000 home, a 2% wind deductible means you pay the first $6,000 of any wind or hail claim out of pocket. These percentage deductibles are often non-negotiable in coastal areas but significantly reduce the base premium.

Available Discounts and How to Qualify

• Bundling (home + auto): Save 5-25% by carrying both with the same insurer. On a $2,200 policy, a 20% bundle saves $440/year. See our car insurance guide for auto shopping tips
• Security system/smart home: Monitored alarms earn 5-15% discounts. Smart devices (leak sensors, connected smoke detectors) add 2-8% at insurers like Nationwide
• New roof: Reduces premiums 10-35%. A Class 4 impact-resistant roof in Texas saves $500-$1,200/year, often paying for itself in 5-7 years
• Claims-free discount: Clean record for 3-5 years qualifies for 5-20% savings. Some insurers offer vanishing deductibles ($100 off per claims-free year)
• New home discount: Homes under 10 years old receive 5-15% discounts for modern codes and systems
• Loyalty discount: 3-10% for long-term customers, but always compare renewal quotes against competitors
• Protective devices: Deadbolts, fire extinguishers, impact shutters each earn 1-5% discounts

How to Get and Compare Home Insurance Quotes

Getting accurate, comparable quotes requires consistency. Follow this process:

1. Determine your dwelling coverage amount: Use your home's estimated reconstruction cost — not market value. Your mortgage lender may require a minimum tied to your loan balance. Agents can run replacement cost estimates using Marshall & Swift or Xactimate
2. Standardize your quote parameters: Request identical dwelling coverage, deductible ($1,000 standard), liability ($300,000 minimum), and personal property coverage across all quotes
3. Get 4-5 quotes minimum: Contact 2 captive agents (State Farm, Allstate), 1-2 independent agents (who shop 8-15 carriers), and 1 direct writer (USAA, Lemonade, Hippo)
4. Compare on total cost and coverage: Check whether each quote includes replacement cost on personal property, guaranteed replacement cost on dwelling, and water backup coverage. A cheaper policy lacking these features costs more in a claim
5. Review every 2-3 years: Rates change annually as insurers adjust for catastrophe losses. Regular comparison shopping is the single most effective way to avoid overpaying

What Standard Home Insurance Covers

A standard HO-3 homeowners insurance policy — the most common type representing about 80% of all homeowner policies — provides six categories of coverage:

• Coverage A — Dwelling: Repairs or rebuilds your home's structure. Set this at full replacement cost — not market value
• Coverage B — Other Structures: Detached structures (garage, fence, shed) at 10% of dwelling coverage
• Coverage C — Personal Property: Your belongings at 50-70% of dwelling coverage. Has sub-limits on jewelry ($1,500), firearms ($2,500), and electronics ($5,000) — schedule valuable items separately
• Coverage D — Loss of Use: Additional living expenses (hotel, meals, temporary rental) at 20-30% of dwelling coverage if your home is uninhabitable
• Coverage E — Personal Liability: Legal liability if someone is injured on your property. Standard $100,000 but $300,000-$500,000 recommended. Consider an umbrella policy for $1M+ protection
• Coverage F — Medical Payments: No-fault medical bills for guests injured on your property, $1,000-$5,000 per person

Hidden Costs and Coverage Gaps to Watch For

Standard home insurance has important exclusions. These gaps require separate policies or endorsements:

• Flood damage: Never covered by standard policies. You need separate flood insurance through the NFIP or a private insurer. Average flood claims exceed $50,000
• Earthquake damage: Excluded in all states. Available as a separate policy — in California, through the CEA
• Sewer/water backup: Excluded unless you add a water backup endorsement ($30-$75/year for $5,000-$25,000 coverage). Worth adding to every policy
• Home business equipment: Business equipment and liability excluded. A home business endorsement costs $25-$100/year
• Actual cash value vs. replacement cost: Some policies pay depreciated value on personal property. A 5-year-old $1,800 laptop might receive only $400 under ACV. Always choose replacement cost coverage
• Ordinance or law: Extra costs to rebuild to current building codes are not covered without this endorsement — critical for older homes

For a broader overview, see our insurance guide. If you are also looking at renters insurance, that guide covers tenant-facing coverage.