Updated: May 29, 2025
Advertising & Editorial Disclosure
When buying homeowners insurance, start by assessing your property's rebuild cost, not just its market value, to make sure you have enough coverage to fully replace your home after a disaster.
Mortgage lenders require homeowners insurance to protect their investment, and depending on where you live, you may also need optional add-ons like flood or earthquake coverage.
The average annual cost of homeowners insurance in the United States is $2,614, but rates vary widely based on your location, home value and coverage choices.
Buying homeowners insurance starts with determining how much coverage you need. Explore optional coverages, compare quotes and choose a policy that fits your needs and budget.
Breaking the process into simple steps makes finding the right protection straightforward.
The first step in buying homeowners insurance is figuring out how much coverage you need to protect your home, belongings and finances. A standard policy typically covers your home's structure, your personal property, additional living expenses if you're displaced, and liability for injuries or damages that occur on your property. If you have a mortgage, your lender will also have minimum coverage requirements you must meet.
The amount of homeowners insurance you need depends on your home's rebuild cost, the value of your possessions and your financial situation. Different types of homes (like condos, standalone houses and mobile homes) may also have specific coverage needs.
Standard homeowners insurance policies include several core coverages. You'll need different coverage amounts based on your home's value and personal property:
Coverage Type | How Much You Need |
|---|---|
Dwelling coverage | The replacement or rebuilding cost of your home |
Personal property coverage | The value of your personal property |
Additional living expenses | 20% or more of your dwelling coverage |
Liability coverage | Enough to cover the total value of your assets |
Medical payments coverage | Up to $5,000 |
The cost of your homeowners insurance depends heavily on the dwelling coverage amount you select. Here’s a look at average premiums based on different coverage levels:
Dwelling Coverage | Monthly Premium | Annual Premium |
|---|---|---|
$100,000 | $90 | $1,075 |
$250,000 | $165 | $1,979 |
$500,000 | $293 | $3,519 |
$750,000 | $424 | $5,086 |
$1,000,000 | $565 | $6,777 |
$2,000,000 | $1,168 | $14,020 |
$3,000,000 | $1,768 | $21,221 |
MoneyGeek recommends purchasing enough dwelling coverage to fully rebuild your home after a disaster, not just to meet lender requirements. Extended replacement cost coverage offers additional protection beyond your home's rebuild cost but costs significantly more than standard policies.
Standard homeowners insurance covers many risks but excludes damage from floods, earthquakes and other specific hazards. Depending on where you live or your home type, you'll need optional coverage to stay fully protected.Â
Flood and earthquake insurance are separate policies you'll buy in addition to your homeowners insurance. Some insurers offer federally backed flood insurance, while others provide private options. If you live in a high-risk area like a floodplain or earthquake zone, your lender will require additional coverage.
Coverage Type | What It Covers | What It Doesn’t Cover |
|---|---|---|
Flood insurance | Your home structure, additional structures on your property, and the furnishings and contents of your home | Basements and vehicles |
Earthquake insurance | Your home’s structure and contents | Outdoor buildings and areas like garages, pools and lawns |
Water backup of sewer | Damage to your home or property caused by water backup | Broken sump pumps, flooding |
Other structures insurance | Other structures on your property | N/A |
Replacement cost plus | Increases coverage by a percentage | N/A |
Ordinance or law insurance | The cost to rebuild a home and make sure it’s up to code | Additions or renovations unrelated to code |
Personal umbrella liability insurance | Additional injury or damage claims | Your own property |
Shop for homeowners insurance online or work with an independent agent or broker. The best approach depends on how much guidance you need. If you're confident comparing options yourself, online shopping lets you quickly switch home insurance and compare rates.
If you want personalized advice, an insurance agent or broker will guide you through policy options and help you choose the right coverage.
Before applying for homeowners insurance, gather key details about yourself and your property to get the most accurate quotes. Insurers use this information to assess risk and determine your premium. Have the following ready:
Having this information upfront can help speed up the process and ensure you get the best possible pricing.
Comparing quotes from multiple insurers saves money on homeowners insurance. Rates can vary widely based on your home's age, location, your credit history and the coverage limits you choose. Nationally, the average annual cost of homeowners insurance is $2,614, but your actual price will depend on these factors.
Gather home insurance quotes from at least three companies before making a decision. You'll also find savings by bundling home insurance with other policies, such as auto insurance.
Although price matters, compare coverage options to ensure you're getting the protection you need along with competitive rates. The table below shows average home insurance rates by state, helping you understand competitive pricing in your area.
State | Dwelling Coverage | Annual Premium | Premium % Change
vs. National Average |
|---|---|---|---|
$100,000 | $1,436 | -32% | |
$250,000 | $1,117 | -47% | |
$250,000 | $1,982 | -6% | |
$100,000 | $2,039 | -3% | |
$500,000 | $2,002 | -5% | |
$250,000 | $3,156 | 50% | |
$250,000 | $1,649 | -22% | |
$250,000 | $717 | -66% | |
$250,000 | $2,359 | 12% | |
$250,000 | $2,147 | 2% | |
$500,000 | $764 | -64% | |
$250,000 | $1,051 | -50% | |
$250,000 | $1,751 | -17% | |
$100,000 | $954 | -55% | |
$100,000 | $1,242 | -41% | |
$100,000 | $2,878 | 37% | |
$100,000 | $1,120 | -47% | |
$100,000 | $1,625 | -23% | |
$250,000 | $1,046 | -50% | |
$250,000 | $1,671 | -21% | |
$500,000 | $2,864 | 36% | |
$250,000 | $2,341 | 11% | |
$250,000 | $2,735 | 30% | |
$100,000 | $1,377 | -35% | |
$250,000 | $2,710 | 29% | |
$250,000 | $2,595 | 23% | |
$250,000 | $2,972 | 41% | |
$250,000 | $906 | -57% | |
$250,000 | $898 | -57% | |
$250,000 | $1,228 | -42% | |
$250,000 | $1,408 | -33% | |
$250,000 | $1,402 | -33% | |
$250,000 | $1,498 | -29% | |
$250,000 | $2,270 | 8% | |
$100,000 | $938 | -55% | |
$100,000 | $2,520 | 20% | |
$250,000 | $811 | -61% | |
$250,000 | $1,348 | -36% | |
$250,000 | $1,321 | -37% | |
$250,000 | $3,377 | 61% | |
$250,000 | $2,545 | 21% | |
$250,000 | $3,466 | 65% | |
$250,000 | $3,390 | 61% | |
$250,000 | $1,081 | -49% | |
$250,000 | $1,197 | -43% | |
$250,000 | $2,058 | -2% | |
$250,000 | $1,106 | -47% | |
Washington D.C. | $500,000 | $1,713 | -19% |
$100,000 | $843 | -60% | |
$250,000 | $1,257 | -40% | |
$250,000 | $1,965 | -7% |
While cost is important when shopping for homeowners insurance, the cheapest homeowners insurance quote isn't always the best choice. MoneyGeek recommends also considering coverage options, customer satisfaction ratings, financial stability and customer reviews to make sure you're getting reliable protection — not just a low price.
Once you've compared quotes, choose a policy and lock in the final details. Confirm the billing plan, deductible amount and policy start date.
If you're buying a home with a mortgage, make sure your insurance details meet your lender's requirements. You'll likely need their approval before the loan can close.
After finalizing your homeowners insurance policy, the final step is submitting your application and paying your first premium. Once you pay your first premium, you'll have home coverage beginning from the start date of your policy.
Finding the right homeowners insurance isn't just about comparing prices; you need full protection. Beyond choosing a policy, several factors can impact your coverage, costs and long-term security.
Several key factors influence how homeowners insurance premiums are calculated, and understanding them can help you find better coverage at a lower price. Here’s a quick look at what insurers consider:
Homes near coastlines, in high-crime areas or far from fire protection services usually cost more to insure. Areas prone to natural disasters also see higher premiums.
Larger homes and those built with expensive materials cost more to replace (and insure) than smaller, simpler properties.
Older homes or those needing major repairs are riskier for insurers, which can drive up premiums.
Homes with modern electrical, plumbing, security systems or disaster-resistant improvements often qualify for discounts.
Choosing a higher deductible lowers your premium but increases your out-of-pocket costs if you file a claim.
A history of frequent claims can make you a higher-risk customer, leading to higher premiums.
In many states, a higher credit score can result in lower insurance rates because insurers see it as a sign of financial responsibility.
Knowing how these factors affect your rate can help you make smarter choices when comparing policies and planning your insurance budget.
When setting up your homeowners insurance, list everyone with a financial interest in the property to ensure full protection. The primary homeowner should always be listed as a named insured, along with any co-owners, spouses or mortgage co-signers.
Family members living in the home may also need to be included to avoid gaps in liability coverage. Making sure the right people are listed on your policy helps protect their financial interests and ensures claims are handled properly if something happens.
If your homeowners insurance is dropped or denied, you can still stay protected. State-run programs like the FAIR Plan offer basic coverage for homeowners who can't find insurance through traditional companies.Â
Before enrolling in a FAIR Plan, compare it against private insurers specializing in high-risk policies. Some private companies may offer broader coverage or better pricing. Working with an insurance broker can help you navigate your options, find the best fit for your situation and ensure your home meets eligibility standards.
In this page, we explained how to buy homeowners insurance, what factors can affect your rates and what steps to take if you lose coverage. Homeowners insurance is essential for mortgage holders, protecting against damage, theft and liability risks.
Even if you own your home outright, you need coverage to safeguard your investment. The right policy depends on your home's location, lender requirements and your specific coverage needs. Smart shopping and proper coverage selection protect your property and prevent costly gaps in coverage
Homeowners insurance is vital to financially protecting your home, but the buying process involves many decisions. Here are answers to common homeowners insurance questions.
How much homeowners insurance you need largely depends on the value of your home and personal possessions. Generally, you should purchase the necessary coverage for rebuilding your house and replacing all your possessions.
We recommend purchasing extended replacement cost coverage if you want to insure your home for more than it's worth to cover replacement and repair costs. This option covers a certain percentage beyond the value of your home.
Some factors that help insurers determine the value of your home include your home’s square footage, location, building materials, age and major upgrades or additions. While a more valuable home will typically come with a higher insurance premium, it also means that your home is more likely to be fully covered in the event of a total loss.
How long it takes to get homeowners insurance depends on the property's complexity and the insurer's process, ranging from a few days to a week. The process involves getting a quote, submitting an application and undergoing an underwriting review. Starting early and having your property details, personal information and financial documents ready speeds up approval.
Why Trust MoneyGeek
At MoneyGeek, we base our homeowners insurance recommendations on real-world data from official state insurance filings across all 50 states, supplemented with insights from Quadrant Information Services. This allows us to compare providers fairly and highlight the best options based on price, coverage and reliability.
How We Selected Home Insurance Companies
We analyzed insurance premiums and policy offerings using Quadrant’s comprehensive pricing database. Our review focused on both standard homeowners insurance packages and extended coverage options for homeowners with higher-value properties.
Homeowner Profile for Rate Comparisons
To ensure accurate rate comparisons, we created a sample homeowner profile with the following characteristics:
Coverage Levels Used in Our Analysis
Unless otherwise noted, we based our quotes on the following standard coverage amounts:
To assess coverage options for more expensive homes, we also reviewed policies modeled with:
This approach helped us evaluate which insurers offer strong choices for both typical homeowners and those needing higher protection levels.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
