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| The most and least expensive US states for home insurance |
According to the Insurance Information Institute (III), approximately 93% of homeowners in the US have some sort of home insurance policy. This statistic equates to over 70 million households, as per the recent census data.
The prevalence of insured homes in the country is not unexpected given the numerous advantages that come with home insurance. Besides covering the cost of repairing or replacing the dwelling and its contents in the case of a covered loss, home insurance can also provide protection for owners against liability claims for harm or damage to other people and property.
However, the cost and coverage of home insurance policies may vary greatly depending on the location of the home. This is due to the fact that various states pose varying levels of risk, which ultimately affects the cost of insurance.
To determine which states have the highest and lowest home insurance premiums, financial services company Bankrate collected and analyzed 2021 rates from all carriers and zip codes in all 50 states and Washington D.C. The quotes were based on a $250,000 dwelling coverage for a 40-year-old homeowner with a clean claim history and good credit score.
According to Bankrate's findings, the national average cost of home insurance for this type of coverage is $1,312 per year. The premiums for home insurance can vary greatly from state to state, with some states having higher costs and others having lower costs, as determined by the financial services firm's analysis.
The most expensive states for home insurance
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| The most expensive states for home insurance |
Oklahoma
Oklahoma is one of the costliest states for home insurance. The average yearly insurance premium is $3,519, which is 5.92% of the median household income. Additionally, the premium in Oklahoma is 168% higher than the national average. The state is located in Tornado Alley in the Midwest and is vulnerable to tornadoes and strong winds. Additionally, Oklahoma is prone to summer storms and flooding, particularly in the eastern part of the state. These factors contribute to high insurance rates in Oklahoma. In Oklahoma City, the average insurance premium is $4,239 per year, while in Tulsa it's $3,123.
Nebraska
Nebraska is another state located in Tornado Alley and is also known for its high home insurance rates. The average annual premium is $2,816, which is 3.85% of the median household income. This amount is 115% higher than the national average. Nebraska is prone to hailstorms that can cause severe property damage. The state is also vulnerable to damaging winds, flooding, and summer storms. In Omaha and Lincoln, the home insurance premiums are $2,766 and $2,060 per year, respectively.
Kansas
Kansas is known for its high home insurance costs, with an average annual premium of $2,694, which is 3.68% of the median household income. This amount is 105% more than the national average. The state is located in the Great Plains and is vulnerable to blizzards, tornadoes, and hailstorms. The city of Wichita has the most expensive home insurance rates in Kansas, at $2,878 per year.
Arkansas
Arkansas is another state with high home insurance costs. The average annual premium is $2,142, which is 3.93% of the median household income. This amount is 63% higher than the national average. Arkansas is located near the New Madrid Seismic Zone and is susceptible to earthquakes. Additionally, some areas in the state are prone to flooding. The state also sits along the path of many tornadoes, experiencing an average of 33 per year, which contributes to wind damage being a common insurance claim in the state.
New Mexico
In New Mexico, the average home insurance premium is $2,024, which is 3.81% of the median household income. This amount is 54% higher than the national average. Flash floods are a major concern for homeowners in the state due to its arid climate. Additionally, New Mexico is at an elevated risk of earthquakes. While tornadoes do occur in the state, the risk is not as high as in the Midwest. However, those living in Albuquerque have lower home insurance rates, at $1,513 per year, which is much lower than the state average.
South Dakota
South Dakota is known for its extreme weather conditions, with sweltering hot summers and extremely cold winters. The average home insurance premium in the state is $1,917, which is 2.98% of the median household income. This amount is 46% higher than the national average. Strong winds and tornadoes are common during the summer, while freezing temperatures can cause damage to water pipes in the winter. Some areas in the state are also susceptible to wildfires.
Texas
The average annual home insurance premium in Texas is $1,863, which is equivalent to 2.76% of the median household income in the state. This amount is 42% higher than the national average. In the past year, Texas saw 105 tornadoes and 6,713 wildfires, ranking second in the country. The state was also affected by damaging hailstorms, affecting 1.5 million properties and leading to $14.2 billion in total losses, according to the Rocky Mountain Insurance Information Association. Home insurance premiums in Houston and Dallas are about 70% higher than the state average, costing $3,183 and $3,107, respectively.
North Dakota
The average annual home insurance premium in North Dakota is $1,841, or 2.63% of the median household income. This amount is 40% higher than the national average. The state is known for its harsh winters, with temperatures dropping below zero for around 50 days each year, causing pipes to freeze and burst. Some eastern parts of the state also have a higher risk of flooding.
Kentucky
The average annual home insurance premium in Kentucky is $1,839, or 3.30% of the median household income. This amount is 40% higher than the national average. Kentucky is in the path of many tornadoes and hurricanes and has an elevated risk of flooding. Homeowners in Lexington and Louisville, however, can expect lower-than-average premiums, with rates of $1,381 and $1,683 per year, respectively.
Montana
The average annual home insurance premium in Montana is $1,826, or 3.03% of the median household income. This amount is 39% higher than the national average. Montana had 2,400 wildfires last year, the fourth highest in the nation, burning nearly 3,700 acres of land. Additionally, the western part of the state is seismically active, making it prone to earthquakes.
The least expensive states for home insurance
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| The least expensive states for home insurance |
Hawaii
Home insurance rates in Hawaii are the cheapest in the US with an average annual premium of $376. Only 0.43% of the median household income is spent on home insurance, which is 71% less than the national average. This is because the state is relatively safe from natural calamities such as tornadoes, hailstorms, and blizzards. Despite this, homeowners in Hawaii are still cautious of earthquakes, wildfires, and flooding, which are the most common causes of property damage. In Honolulu, the average annual home insurance rate is slightly lower at $372.
Utah
With an average annual premium of $647, Utah is another state with lower home insurance rates with only 0.77% of median household income being spent on insurance. This makes it 51% less expensive than the national average. Utah is protected from many natural disasters, except for flooding in the southern regions. Residents there face extreme heat in the summer and severe snowstorms in the winter.
Delaware
Despite having a risk of flooding, Delaware offers almost 50% lower home insurance rates than the national average with an average annual premium of $680. Only 0.92% of median household income is spent on home insurance. Hurricanes are a common cause of insurance claims by residents.
Vermont
Vermont's annual home insurance rates are also 48% less expensive than the national average with an average annual premium of $686. Only 0.92% of median household income is spent on insurance. Despite the moderate-to-high risk of flooding and a moderate risk of wildfires (96 blazes were recorded in the past year), Vermont's emergency preparedness ranks among the best in the country, making it one of the most protected states from natural disasters.
Oregon
Although Oregon has a low average annual premium of $712 which is 46% less than the national average, the state is still susceptible to natural disasters such as wildfires (more than 2,200 were recorded in 2020, burning over 1.1 million acres of land) and earthquakes in the western portion of the state. The insurance rates in Portland are among the lowest in the state at $657 per year. On the other hand, Eugene has annual premiums that average more than double the state average at $1,433.
New Hampshire
With an average annual premium of $724, New Hampshire is 45% less expensive than the national average with only 0.83% of median household income being spent on insurance. Although the state is prone to hurricanes, its location and topography cause them to lose intensity as they move north, keeping most of New Hampshire out of harm's way. Flooding is the primary concern for homeowners in the state.
Pennsylvania
Average annual premium: $730
Percentage of median household income: 1.03%
Percentage lower than the national average: 44%
In Pennsylvania, the likelihood of flooding is considerable, yet the risks of wildfires and snowstorms are less prominent in comparison to other states, contributing to lower insurance rates. Pittsburgh residents typically pay slightly more for home insurance, with an average of $741 per year, while the average in Philadelphia is $1,151, due to the higher frequency of theft and vandalism incidents.
New Jersey
Average annual premium: $751
Percentage of median household income: 0.86%
Percentage lower than the national average: 43%
nterestingly, home insurance rates in New Jersey are among the most affordable in the US, even though the entire state is at a high risk of flooding. The state recorded approximately 2,000 wildfires last year, burning nearly 12,000 acres of land. Insurance costs in Newark average $868 per year, while in Jersey City, the average is $824, both higher than the state average.
Wyoming
Average annual premium: $805
Percentage of median household income: 1.24%
Percentage lower than the national average: 39%
Wyoming experienced 828 wildfires last year, which is relatively low compared to other states in the western region. Despite the large amount of land affected, the damage was among the highest in the country, with a total of 340,000 acres burnt. Despite this, home insurance rates in Wyoming are almost 40% less expensive than the national average.
Nevada
Average annual premium: $822
Percentage of median household income: 1.16%
Percentage lower than the national average: 37%
Home insurance rates in Nevada are around 37% cheaper than the national average, although many areas in the state are at risk of flooding. The western region also has a significant chance of earthquakes. Nevada residents may also have to endure periods of extreme heat during the year. Insurance rates in Reno are lower than the state average, costing $782 per year, while in Las Vegas, the average is $905, slightly higher.
Homeowners Insurance Companies:
The information about insurance providers included here is intended for informational purposes only and does not imply endorsement of any particular company or product. The writers of this content and the website itself are not authorized to sell or provide insurance advice. Not all coverage options, discounts, and features may be available in every state. To learn more about any of the companies mentioned or to get a quote, please reach out to an insurance company, agent, or financial advisor directly. The content is not a general recommendation for homeowners insurance products or a specific endorsement of a particular insurer or product. Any rates listed are provided as examples only. You should reach out to the insurance provider or agent directly to get applicable quotes.
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