What Does Homeowners Insurance Cost?

Buying and owning a home is often the single most expensive thing that many people will do over the course of their lives.

Between the down payment and closing costs during the buying process, ongoing mortgage payments and property taxes, and the occasional maintenance and repair, the costs can really add up. If you’re not careful, they can blow a hole in your budget and make homeownership more difficult than it needs to be.

One cost that many aspiring homeowners overlook until they’re in the contracting stage of buying a home? Homeowners insurance.

So, how are rates determined, what’s the average cost to homeowners, and perhaps most importantly, how can you reduce your premiums to make coverage more affordable? We answer all of these questions and more below.

What is homeowners insurance?

Homeowners insurance is coverage that you buy to protect your home — and the belongings in it — from damage or harm. It works like this: If your home is damaged or destroyed during a covered event, homeowners insurance is there to help you cover some or all of the costs of either repairing or rebuilding it. The same is true of belongings in your home.

While there are eight standard types of homeowners insurance, each with its own coverage and protection limits, the majority of policies are HO-3 (special form) and HO-5 (comprehensive form).

What factors impact the cost of homeowners insurance?

Insurance carriers take a lot of factors under consideration in calculating your homeowners insurance rates, which ultimately affect your monthly premiums. Some of the most important factors include:

• How much coverage you have: Ultimately, when you purchase insurance, you’re paying for coverage. The more coverage you want or need, the higher your premiums will likely be. Likewise, adding additional coverage in the form of riders will generally push your premiums higher.
• The size of your deductible: Your deductible is how much money you need to pay out of pocket, per claim, before your homeowners insurance policy will kick in. When your deductible is higher, your premiums will typically be lower, and when your deductible is lower, your premiums will typically be higher.
• Where you live: The location of your home is one of the greatest factors impacting cost. Homes located in an area that is perceived to be riskier — for example, one prone to extreme weather, flooding, wildfires, or crime — will be more expensive to insure than homes located in a less risky area. With this in mind, rates can vary significantly by city, state, and region.
• The size of your home: Homeowners insurance rates are higher for larger homes than they are for smaller homes. Why? Because a larger home means more “surface area” that can be damaged or destroyed during a covered event, leading to higher repair and rebuilding costs.
• The age of your home: As a home ages, materials degrade, increasing the risk that a covered event will cause significant damage. Likewise, older homes may have been built with less stringent safety standards, especially in regard to its plumbing and electrical systems. With this in mind, older homes can be more expensive than newer homes to insure.
• The condition of your home: Before agreeing to insure your home, most carriers will conduct a home inspection designed to review the condition of your home. This inspection will look for existing damage, hazards, and risks which might make your home riskier to insure. The worse the condition of your home, the more expensive coverage will be — and the greater the likelihood you may be turned down.
• Your history of claims: When you put in a claim against your homeowners insurance policy, it may signal to carriers that you are likely to submit additional claims in the future. With this in mind, if you have a history of claims — especially if they are larger claims — it can push your rates higher.

Other factors that may affect your rates in certain states include your credit history, whether you own your home outright or are financing it with a mortgage, and even your marital status.

Why do homeowners insurance rates rise?

Once you have coverage, it’s important to note that your premiums can increase for a number of different reasons. You probably already know that rates can go up if you file multiple claims in a short period of time, but other reasons you might not be aware of include:

• Your coverage lapsed: If there was a period of time when your home wasn’t insured — maybe you failed to renew your policy or your insurer dropped you — your new carrier may raise your rates due to a perceived increase in risk.
• Your credit score decreased: In some states, insurers are allowed to consider your credit score in calculating your rates. If your credit score decreases, it can cause your rates to go up.
• Your home needs repairs: Insurers consider the likelihood that you are going to file a claim in the future when determining your rate. If your carrier conducts an inspection and determines that repairs may soon be necessary — especially to your roof, foundation, or other structural components — it can lead to an increase in rates.
• The cost of building materials has increased: When the cost of building materials rise, as they have due to inflation and supply chain issues, those costs can get passed along through your premiums.
• A carrier has left your state: In recent years, a number of insurers have made headlines for leaving states with a greater risk of extreme weather — think hurricanes in Florida or wildfires in California. This can cause the remaining carriers to raise their rates for everyone else.
• New hazards: If you’ve made additions to your property in the form of a trampoline, swimming pool, hot tub, or even a new dog, it can increase the likelihood of someone being injured in your home, leading to liability claims against your insurance — and higher premium payments to your carrier.

Average cost of homeowners insurance

According to the National Association of Realtors, the average US homeowner paid $2,377 for homeowners insurance in 2024 — or just over $198 per month.

That being said, average costs vary significantly depending on where you live, how much coverage you are purchasing, and other factors. With this in mind, below is a breakdown of average costs in each of those categories. These figures come from Matic’s internal data about what our customers pay in 2024, in addition to outside sources.

Average homeowners insurance cost by state

Average Homeowners Insurance Premiums by State

Average homeowners insurance cost by coverage amount

Average Homeowners Insurance Premiums by Dwelling Coverage Amount

Get a personalized estimate for the cost of homeowners insurance

To get an idea of your specific homeowners insurance cost, use our free calculator. Enter your address for a personalized estimate, or adjust the property details for a more accurate result. Once you have an estimate, you can explore quotes from our network of over 40 A-rated carriers.

How you can lower your rates

Homeowners insurance, while necessary, can add hundreds of dollars to your budget each month. Though many of the factors that go into calculating your rates are out of your control, the good news is there are steps that you can take to potentially reduce your monthly premiums.

1. Make sure you’re appropriately covered.

When it comes to buying homeowners insurance, most people worry about having enough coverage. While that’s absolutely important, it’s also important to not be paying for more coverage than you need, as this can make your bill significantly more expensive. In other words, you need to find a balance: You want enough coverage to feel secure, but not so much that paying your premiums becomes a hardship.

Learn more about how to determine how much home insurance you need.

2. Take advantage of common homeowners insurance discounts.

Many carriers offer discounts that can help reduce the cost of your monthly premiums. Some of the most common discounts can include:

• Bundles, when you purchase multiple types of insurance (like home and auto) from a single carrier.
• Paperless discounts, when you agree to receive monthly statements by email instead of mail
• Paid-in-full discounts, when you pay your annual premiums in a lump sum instead of monthly
• Loyalty discounts, when you stay with a carrier for a specified length of time
• Senior discounts, for homeowners typically 65 or older

In addition, when you shop with Matic, we work hard to find discounts – even checking to see if using two carriers gets better rates than bundling.

Learn more about the different homeowners insurance discounts you may qualify for.

3. Consider renovations that make your home safer.

As noted above, the more likely you are to submit a claim, the higher your homeowners insurance rates will typically be. With this in mind, any steps you take to lower the risk of a claim can potentially help lower your rates. Replacing your roof, upgrading your wiring and electrical system, making your home more storm resistant, installing security equipment like cameras, and removing hazards are all examples of renovations that might lower your bill.

Learn more about the difference between risks, perils, and hazards and how each can affect your insurance rates.

4. Increase your deductible.

The size of your deductible is an important factor in determining the cost of your premiums. With this in mind, if you’re looking to lower your cost of insurance, increasing your premium is one path to doing so. Before you agree to a higher deductible, however, it’s important to ensure that you’re able to absorb the higher cost. One potential solution is to set aside money for your deductible in a high-yield savings account so you know it’s always there if you need it.

Learn more about your homeowners insurance deductible and how it works.

5. Shop around.

Whether you’re a first-time homebuyer looking for coverage or you’ve been with the same carrier for years, it’s important to shop around to find the best deal for the coverage you need. If your carrier has recently raised your rates, or you’ve simply decided you need to find lower premiums, comparison shopping is one effective strategy.

Learn more about the benefits of reshopping your home insurance.