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The amount of premium that you pay towards your home insurance policy is influenced by a number of factors such as the size, area, and use of the property, as well as discounts that you could receive under certain conditions. However, home insurance premiums in the United States also vary from state-to-state. We present a comparison of the cost of homeowners’ insurance on a state by state basis based on certain factors.
Below are in-depth reviews of cheap home insurance in each state.
All average home insurance costs listed here are sourced from Insurance Information Institute's data which can be found here.
Table of Contents
Like we said, house insurance is dependent on many factors. However, for the purpose of a comparison, we’ve considered the main influential factors such as the state’s geographic location, exposure to severe weather, and the probability of other hazards or accidents relative to that state:
The area, in which a property is located, is one of the main deciding factors on the quote that your insurance company provides you on your policy. This is because certain geographic areas are more prone to natural disasters, such as tsunamis, earthquakes, volcanoes, hurricanes and tornadoes. Florida, for example, is close to the Gulf of Mexico and the Atlantic Ocean, making it highly susceptible to storms and hurricanes. It is for this reason that states such as Texas, Florida, California, Kentucky and Oklahoma, among others, have incredibly high premiums ($1,947, $2,055, $1,023, and $1,772, respectively). These areas are risky to insurance companies as they are more prone to damage and therefore, filing of claims, which insurance companies view as losses.
On the other hand, states such as Idaho, Oregon, Nevada and Utah have cheaper premiums due to their favorable geographic locations. These states face a low risk of natural disasters as per their National Hazards Risk Scores, which is why Idaho only has an average premium of $590, Oregon of $574, Utah of $634 and Nevada of $704.
Another factor to consider in geographic location is also the crime rate of a state. States with higher crime rates (generally cities) have higher premiums due to the increased chance of theft or damage, such as Florida, Louisiana or even New York.
Though related to geographic location, exposure to severe weather is a major factor in itself that determines house insurance rates. Properties in states that experience extremely cold temperatures, wildfire or high winds, are charged higher premiums. This is due to the fact that there is an increased chance of snow-related accidents such as frozen pipes or flooded basements, chances of fire and fire-related accidents, and wind damage. All of this could lead to claims for damage, injury or even replacement.
States such as New York, Ohio, and Utah are at lower risk of extreme weather conditions. However, states such as Alaska, Louisiana and Texas experience severe weather conditions. Alaska experiences some of the worst winters while Texas experiences the hottest and driest summers and sandstorms, while Louisiana is a hotbed for hurricane activity, which is why the premiums in these states are $976, $1,947, and $1,847, respectively.
The amount you shell out for the construction of your house varies from state to state. This could be due to several factors such as higher costs of living, expensive labor, or expensive land. Well, all these factors don’t just affect construction costs but your insurance premium as well! The more expensive the cost of construction, the higher the premium. This is because insurance companies have to pay more to compensate any claims through construction. States such as Texas, Washington, New York and California have some of the highest construction costs in the world, which is why premiums here are as high as $1,947, $695, $1,265, and $974, respectively, especially when compared to states with lower construction costs such as Utah and Wisconsin ($634 and $686, respectively).
Sinkholes are depressions caused in the ground due to the collapse of any of the layers in the ground. Though they cause the ground to open up, sinkholes are not similar to earthquakes and can occur quite suddenly, which is why sinkhole insurance is for real!
At least 20% of USA’s landmass is prone to sinkholes, with the phenomenon occurring most commonly in Florida, Texas, Alabama, Tennessee, Pennsylvania, Kentucky and Missouri. As we’ve already seen, most of these states have a high insurance premium already and sinkholes just add to that. In comparison, states further up north, such as Alaska, Idaho, North Dakota, Minnesota, and Wyoming experience fewer chances of sinkholes, leading to a lesser premium.
Ultimately, the states with the highest premiums are Florida, Louisiana, Oklahoma, Alabama, Mississippi, Arkansas, Texas, Kansas, Missouri and Nebraska, while those with the lowest premiums are Idaho, Oregon, Utah, Wisconsin, Washington, Nevada, Delaware, Arizona, Ohio and Maine. The premium in these states is affected by a variety of factors such as the weather, the geographic location, sinkholes and local construction costs.
States with more exposure to severe weather, less-than-ideal geographic locations and high construction costs tend to be more costly. However, not all these factors occur all at once, so there may be states that have a high construction cost but lower premium than a state with low construction cost. This is because other factors may be influencing the premium of the latter, such as weather and geography.
However, whichever state you belong to, you can still save on your insurance quote in a lot of ways, the main way being discounts! Discounts are a great way to save the dollars, especially if you’re living in a state where the premium charged on policies is high. Also educate yourself on what factors exactly determine the premium you’re charged, so that you can discern if you’re ever taken on a ride by your insurance company. If not, just move lock, stock, and barrel to Idaho and you’re set till the day global warming makes Idaho cranky!