How Much Is Homeowners Insurance?

No matter where you are in the home buying journey, we bet you’re at least a little familiar with home insurance, but you may not know that it will cost you between $1,450 and $5,287 per year*. Buying a house is no picnic, and getting homeowners insurance is a must for peace of mind as a homebuyer, but also for meeting your mortgage lenders’ requirements.

Homeowners insurance is different from renters insurance. Think of it this way: you now own your own walls, so naturally, a home insurance policy will cost more than a renters. 

But don’t get too worked up about the cost of your insurance just yet. The final price of your premium will depend on a whole host of factors. 

What is the average cost of homeowners insurance? 

Nationwide, the average homeowners insurance premium ranges from *$1,450 to $5,287 per year, or roughly $121 to $440 a month.

Of course, average premiums can vary widely depending on where you live, ranging from a low of $1,091 in Delaware to $4,799 in Oklahoma.

Lemonade homeowners insurance policies start at as low as $25/month. However, your personalized price depends on a variety of factors, including:

1. Your deductible
2. The age of your building
3. Your chosen coverage amounts
4. Your location

Average homeowners insurance cost by state

Here’s a breakdown of the average annual home insurance cost by state:

Rank	State	Average annual home insurance cost	Average monthly home insurance cost	Percent difference from national average
1	Oklahoma	$4,799	$400	+123%
2	Nebraska	$4,370	$364	+103%
3	Kansas	$3,856	$321	+79%
4	Texas	$3,694	$308	+72%
5	Florida	$3,382	$282	+57%
6	Colorado	$3,331	$278	+55%
7	Louisiana	$3,255	$271	+51%
8	Arkansas	$3,235	$270	+50%
9	Missouri	$3,031	$253	+41%
10	Mississippi	$3,005	$250	+40%
11	Tennessee	$2,818	$235	+31%
12	Kentucky	$2,744	$229	+28%
13	Alabama	$2,717	$226	+26%
14	North Carolina	$2,666	$222	+24%
15	South Dakota	$2,596	$216	+21%
16	New Mexico	$2,594	$216	+21%
17	Montana	$2,490	$208	+16%
18	North Dakota	$2,372	$198	+10%
19	South Carolina	$2,298	$192	+7%
20	Georgia	$2,217	$185	+3%
21	Minnesota	$2,191	$183	+2%
22	Indiana	$2,144	$179	0%
23	Illinois	$2,133	$178	-1%
24	Connecticut	$2,119	$177	-1%
25	Iowa	$2,108	$176	-2%
26	Arizona	$1,993	$166	-7%
27	Maryland	$1,962	$164	-9%
28	Wyoming	$1,932	$161	-10%
29	West Virginia	$1,803	$150	-16%
30	Michigan	$1,783	$149	-17%
31	Massachusetts	$1,777	$148	-17%
32	Rhode Island	$1,670	$139	-22%
33	California	$1,624	$135	-25%
34	Virginia	$1,498	$125	-30%
35	Washington	$1,483	$124	-31%
36	Idaho	$1,437	$120	-33%
37	Ohio	$1,436	$120	-33%
38	Wisconsin	$1,391	$116	-35%
39	Alaska	$1,374	$115	-36%
40	Nevada	$1,350	$113	-37%
41	New York	$1,339	$112	-38%
42	New Jersey	$1,337	$111	-38%
43	Washington, DC	$1,336	$111	-38%
44	Oregon	$1,225	$102	-43%
45	Pennsylvania	$1,214	$101	-44%
46	Utah	$1,137	$95	-47%
47	Delaware	$1,091	$91	-49%
48	New Hampshire	$1,002	$84	-53%
49	Maine	$977	$81	-55%
50	Vermont	$929	$77	-57%
51	Hawaii	$601	$50	-72%

Real homeowners insurance cost examples

The numbers in the table above tell part of the story. But the same home, same square footage and the same price tag can cost very different amounts to insure depending on the details. Here are four real-world scenarios that show how coverage choices, location, and home improvements actually play out in practice.

Scenario 1: Suburban family home in Texas

Situation: Marcus and Diana own a $380,000 two-story home built in 2003 in the Austin suburbs. They chose $320,000 in dwelling coverage, $160,000 in personal property coverage, and a $1,500 deductible. They bundle their home and auto policies, and they’ve got a monitored security system.

Reasoning: Texas sits among the highest-cost states for home insurance, largely due to hail, windstorms, and tornado risk. But bundling and security discounts can meaningfully offset that. Their deductible choice also plays a role at $1,500, they’re absorbing more out-of-pocket risk in exchange for a lower monthly payment.

Outcome: Their annual premium runs around $2,950 (~$246/month). Without the bundle and security discounts, that number would be closer to $3,400, a difference of roughly $450/year.

	Without discounts	With bundle + security discounts
Annual premium	~$3,400	~$2,950
Monthly cost	~$283/month	~$246/month
Annual savings	—	~$450/year

Scenario 2: Coastal home in a hurricane zone (Florida)

Situation: Priya owns a $300,000 home in Tampa, about two miles from the water. Her standard policy didn’t include flood coverage. That requires a separate policy entirely. After closing, she had a wind mitigation inspection done and installed hurricane shutters.

Reasoning: Florida law requires insurers to offer discounts for verified wind mitigation features. Priya’s shutters and impact-rated upgrades qualified her for a 20-30% discount on the wind portion of her premium, which is a significant chunk of what coastal Florida homeowners pay.

Outcome: Her base annual premium was around $4,800. After the wind mitigation discount, it dropped to roughly $3,900. The shutters paid for themselves in about two years, and her home is better protected in the process.

	Without hurricane shutters	With hurricane shutters
Annual premium	~$4,800	~$3,900
Monthly cost	~$400/month	~$325/month
Annual savings	—	~$900/year

Scenario 3: Low-risk home in the Pacific northwest

Situation: James owns a $280,000 craftsman-style home in Portland, Oregon, built in 1988. Oregon has relatively low storm and crime risk. He chose $260,000 in dwelling coverage and a $1,000 deductible, keeping his coverage snug to replacement cost without over-insuring.

Reasoning: Oregon consistently ranks among the more affordable states for homeowners insurance. The home’s age adds a modest surcharge. 1988-era plumbing and electrical carry more risk than a newer build, but the low-risk location keeps the overall rate well below the national average.

Outcome: James pays around $1,150/year (~$96/month). If he updated his roof or electrical panel, he could likely reduce that further. The location advantage alone saves him hundreds compared to someone with an equivalent home in a high-risk state.

	Equivalent home in high-risk state (e.g. Texas)	James’s home in Oregon
Annual premium	~$2,950+	~$1,150
Monthly cost	~$246/month	~$96/month
Annual savings	—	~$1,800/year

Scenario 4: Recently renovated historic home

Situation: Carmen owns a 1920s Craftsman in Chicago. Its market value is $420,000, but the replacement cost, what it would actually take to rebuild it today using period-appropriate materials and finishes, is closer to $510,000. Her dwelling coverage is based on that higher number, not the market price.

Reasoning: This surprises a lot of homeowners. Market value includes your land, your neighborhood, and real estate trends. Insurance doesn’t cover any of that. It covers the cost to rebuild the structure. Carmen’s recent updates (new plumbing, electrical, and a 2022 roof) reduced her risk profile and kept her premium lower than it would be for an unrestored home of the same age.

Outcome: With $510,000 in dwelling coverage, $200,000 in personal property coverage, and a $1,000 deductible, Carmen pays around $2,400/year. An equivalent home with original, unrenovated systems would likely run $400-$600 more annually.

	Unrenovated 1920s home	Carmen’s renovated home
Dwelling coverage needed	~$510,000	~$510,000
Annual premium	~$2,900	~$2,400
Monthly cost	~$242/month	~$200/month
Annual savings from renovations	—	~$500/year

What factors impact your homeowners insurance rates?

The price of your insurance can vary significantly, depending on factors like your home’s condition, location, deductible, and the amount of coverage you need. Building costs, inflation, and local climate trends also play a big role in determining your home insurance costs. Let’s dig a bit deeper into this. 

Here are 5 factors that can determine what you’ll pay your insurer for your home insurance policy:

1. Your state 

Homeowners insurance differs from state to state. States with a higher chance of natural disasters generally have higher premiums than states that don’t. For example, Louisiana, Texas, Florida, Oklahoma, Kansas, Mississippi, and Rhode Island have the highest premium for homeowners insurance. It’s no coincidence that Florida, Texas, and Louisiana are coastal states and can encounter some pretty crazy storms, and Oklahoma and Kansas are bang in the middle of Tornado Alley.

The states with the cheapest insurance rates are, (with the exception of Wisconsin) in the west, where natural disasters like hurricanes, windstorms, tornadoes, and hail are generally less frequent. Hawaii, Vermont, Utah, New Hampshire, and Nevada have some of the lowest home insurance rates.

2. Condition of your home

The condition of your home will impact your Lemonade homeowners insurance premium. For instance, how old is the house you live in? When was the last time the roof was replaced? What kind of renovations has it been through? Those pre-war hardwood floors may be your favorite thing about your home, but are the pipes as old as the carpentry? The older your house is, the more prone it is to damage. So older homes = higher premiums.

3. Your deductible

An insurance deductible is the amount of money you choose when purchasing a home insurance policy that will be subtracted from any future claims payouts. So if a fire destroyed a part of the structure of your home costing $30,000 and your deductible was $1,000, your insurance company would pay you $29,000. Think of a deductible as your participation in the damage or loss. You’re saying, “I commit X dollars to any claim, and my insurance company will cover the rest.”

With a higher deductible, you’ll pay a lower premium. But keep in mind that in the event of a claim, a higher deductible also means you’ll pay a lot more out of pocket before your insurer chips in. Different people have different preferences – you’ll have to decide what’s right for you at the end of the day.

4. Your zip code 

Not only will your state come into play when it comes to your insurance premium, but also your address. For instance, if your home is close to a Class 1 fire department, or you live in a gated community, you’ll pay a lower premium. On the other hand, if your home is in an area that has a higher crime rate, your premium will go up.

5. The amount of coverage you choose

The amount of coverage you choose in each category-like dwelling coverage, personal property, and more-has an impact on the final price of your premium. Here’s a handy guide to finding out how much coverage you need.

How insurance companies calculate your premium

Most people assume their home insurance premium is somewhat arbitrary. It isn’t. Insurers follow a structured process to figure out how likely you are to file a claim, and how much that claim might cost them. Here’s how that process actually works.

The risk assessment process

The insurance underwriting process starts broad and gets more specific the closer it gets to your front door.

First, insurers look at regional risk. Your state, county, and zip code all carry historical claims data: how often homeowners in your area file claims, what those claims are typically for, and how severe they tend to be. A zip code with frequent hail damage or a history of wildfires will carry a higher baseline rate than one without those patterns.

Then your specific home gets evaluated. The insurance risk assessment at this level looks at things like:

• Age and construction type. Older homes, especially those with original plumbing or wiring, carry higher risk. Brick construction typically fares better in fire events than wood frame.
• Roof age and material. A roof replaced in the last five years will get a better rate than one that’s 20 years old. Some older roofing materials, like certain types of polyurethane foam, can be harder and more expensive to replace.
• Distance to a fire station. Homes located closer to a fire station tend to get lower rates, since response times affect how much damage a fire can do before it’s contained.
• Local crime statistics. Higher property crime rates in your area can push premiums up, since theft and vandalism are covered losses.

Finally, your personal profile gets layered in. Insurers look at your claims history, including claims filed by previous owners of your home, for up to seven years. They’ll also factor in your credit-based insurance score in most states. A few states, including California, Hawaii, Maryland, and Massachusetts, don’t allow that. If you’re buying a home, it’s worth requesting a CLUE report (a record of past claims on the property) before you close.

Coverage calculation methods

Once your risk profile is established, insurers figure out how much it would cost to cover you. Understanding a few key homeowners insurance terms here makes a real difference in what you end up buying.

Dwelling coverage protects the physical structure of your home: walls, roof, foundation, built-in appliances. The coverage amount should reflect your home’s replacement cost, meaning what it would cost to rebuild it from scratch at today’s labor and material prices. This is almost always different from your home’s market value, which includes your land and neighborhood factors that insurance doesn’t cover.

If you under-insure your dwelling, you may not receive a full payout when you need one. Most insurers require you to cover at least 80% of your home’s replacement cost to avoid a penalty on partial claims.

Personal property coverage protects your belongings: furniture, electronics, clothing, and more. Most policies set this at 50-75% of your dwelling coverage limit. High-value items like jewelry, art, or musical instruments often need to be listed separately to be fully covered.

Liability coverage steps in if someone is injured on your property and takes legal action. It covers legal costs and settlements up to your chosen limit.

Replacement cost vs. actual cash value (ACV) is one of the most important coverage definitions to understand before you buy. Replacement cost pays what it costs to replace a damaged item at today’s prices. ACV pays that same amount minus depreciation. A 15-year-old roof under an ACV policy might net you very little at claim time, even if replacing it costs thousands. Replacement cost policies cost more upfront, but they cover you more completely when it counts.

Your deductible is the amount you agree to pay out of pocket before your insurer covers the rest. A higher deductible lowers your premium but increases your out-of-pocket exposure on any given claim. Choosing a deductible you can realistically cover in an emergency is just as important as getting the monthly number down.

How discounts get applied

After your base premium is calculated, discounts are applied to bring the final number down. Common ones include:

• Bundling. Combining your home policy with auto or other policies through the same insurer typically saves 10-25%.
• Security systems. A monitored burglar or fire alarm can reduce your premium by 5-15%.
• Wind mitigation features. In hurricane-prone states, upgrades like hurricane shutters or impact-resistant roofing earn credits on the wind portion of your premium. In Florida, insurers are required by law to offer these discounts, and they can be significant.
• Claims-free history. Several years without a filed claim usually earns a discount. Filing a claim, even a small one you could cover yourself, can raise your rate for years. It’s worth doing the math before you file.
• New construction or recent renovations. Updated systems and newer builds carry lower risk, and insurers price accordingly.

Your final premium is your base rate, adjusted for your specific home and personal profile, with applicable discounts subtracted at the end. No single factor determines it. It’s the full picture.

How to save on homeowners insurance

If this is your first time buying a home, you might not have factored in the price of homeowners insurance into your monthly payments. In which case, you might be looking for ways to bring your premium down slightly. 

• Bundling different Lemonade policies together can unlock savings and discounts-for instance, you could combine homeowners and car insurance, or homeowners and pet health insurance.
• Your home doesn’t need to be ‘smart’ in order to install some devices that will help to lower your insurance premium. Start with a standard fire alarm and burglar alarm, and you’ve already lowered your risks. And lowered risks equals lowered premiums.
• If where you live is closer to potential bad weather, check with your insurance company what sort of reinforcements you can add to make your home more weather-proof. For instance, you may be able to save money on your premiums by adding storm shutters or adding laminated glass windows. You could also replace your heating, plumbing, and electrical systems to cut down the risk of fire and water damage.
• Lemonade has its own ‘Get Discounts Now’ feature where you can help lower your premium price by answering a series of questions about your home’s characteristics and safety measures like home renovations, or whether you live in a gated community.
• Lastly, if you want your premium to go down, you can increase your deductible. The higher you’ll pay on your deductible the lower you’ll pay on your premium and vice versa. 

You’re covered. Now relax.

Poring over a homeowners policy can feel like a lot, but it doesn’t have to be. Lemonade makes buying coverage simple and fast, from getting your quote to sending proof of insurance directly to your lender, so you can skip the back and forth.

Buying a home is one of the biggest decisions you’ll ever make. Having the right coverage in place means one less thing to stress about, so you can get on with actually enjoying it.

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A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of the policies issued, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage may not be available in all states. Please note that statements about coverages, policy management, claims processes, Giveback, and customer support apply to policies underwritten by Lemonade Insurance Company or Metromile Insurance Company, a Lemonade company, sold by Lemonade Insurance Agency, LLC.  The statements do not apply to policies underwritten by other carriers.