How much does home insurance cost, and why is it rising?

The average homeowners insurance policy on the most common form, known as HO-3, cost $1,737 in 2023, according to the latest national data from the National Association of Insurance Commissioners (NAIC). That works out to about $145 a month, but what you pay depends heavily on where you live, what it would cost to rebuild your home and the coverage you choose.

Premiums have been climbing for years. Here’s what drives the price of a policy, why costs keep rising and how to compare quotes without cutting coverage you need.

Key takeaways

• The NAIC’s average premium for an HO-3 policy was $1,737 in 2023, up from $1,569 in 2022.
• Averages vary widely by state. In 2023, the average HO-3 premium was $3,027 in Louisiana and $2,779 in Florida, compared with $923 in Wisconsin.
• Your premium depends mainly on your home’s rebuilding cost, local weather and fire risk, the home’s age and condition, your claims history and the deductible you choose.
• Rising catastrophe losses, more frequent and costly claims and higher rebuilding costs have pushed premiums up in every region.
• Standard policies don’t cover flood damage and usually exclude earthquakes, so those need separate coverage.

What homeowners pay for insurance

The national average

The NAIC compiles premium data from insurance statistical agents for every state and Washington, D.C. For 2023, the most recent year in its homeowners report, the countrywide average premium for an HO-3 policy was $1,737. The HO-3 is the most common homeowners policy. It covers your house against all causes of damage except those the policy specifically excludes, and it covers your belongings against a list of named perils.

That figure is an average across very different homes and coverage amounts. The NAIC itself cautions that average premium is an imperfect measure of price, because hazards, economic conditions and real estate values vary so much from place to place.

Averages by state

Where you live makes a large difference. In the NAIC’s 2023 data, the average HO-3 premium was:

• $3,027 in Louisiana
• $2,779 in Florida
• $1,737 across the U.S.
• $1,003 in Oregon
• $923 in Wisconsin

States exposed to hurricanes, severe storms and hail tend to have higher premiums. Differences in state laws and coverage requirements also make direct comparisons between states difficult.

Averages by coverage amount

The more dwelling coverage you buy, the more you pay. Here’s how the countrywide average HO-3 premium changed with the amount of insurance in 2023:

Amount of dwelling coverage	Average HO-3 premium, 2023
Less than $150,000	$954
$250,000 to $274,999	$1,350
$350,000 to $399,999	$1,598
$500,000 to $599,999	$1,973
$700,000 to $999,999	$2,916
$1,000,000 and over	$4,314

Coverage should be based on what it would cost to rebuild your home, not its sale price. Market value includes the land, which doesn’t need to be insured against fire or wind.

What affects your premium

Insurers price each policy based on how likely you are to file a claim and how much a claim would cost. According to the NAIC, the main factors include:

• The cost to rebuild your home. Larger homes and costly materials raise the premium.
• Construction type. Brick and masonry homes usually cost less to insure than wood-frame homes.
• Fire protection. Your distance from a fire department or water source, and the quality of local fire services, affect the price.
• Age and condition. Older homes and homes in poor condition often cost more. An old roof or outdated wiring can raise your rate.
• Claims history. Both your past claims and those filed on the home and in your area matter. Insurers can check a shared database of past claims.
• Your coverage choices. Higher limits and added endorsements cost more, and a higher deductible costs less.
• Credit history. In many states, insurers use a credit-based insurance score, which estimates how likely you are to file a claim. State laws limit how these scores can be used, and some states prohibit certain uses.
• Risks on the property. A pool, trampoline, wood stove, home business or certain dog breeds can raise your premium or limit your options.

Insurers also often give discounts for smoke detectors, burglar alarms, sprinkler systems and deadbolts, for buying home and auto coverage from the same company, and for updates such as a new roof or storm shutters.

Why home insurance costs are rising

Premiums have climbed in every region

The NAIC’s HO-3 average rose from $1,411 in 2021 to $1,569 in 2022, an increase of about 11%, and then to $1,737 in 2023. Over a longer stretch, a 2026 NAIC analysis of state regulatory data found that average premiums per policy rose in every region between 2018 and 2024. After adjusting for inflation, the increases ranged from 18.3% to 43.3% depending on the region, or roughly 2.4% to 5.3% a year.

Bigger and more frequent catastrophes

Catastrophes have been occurring more often and causing more damage since the late 1980s, and they’re a major factor in how insurers price policies. Insured losses from U.S. catastrophes totaled more than $940 billion from 2016 through 2025, measured in 2025 dollars, according to figures cited in the NAIC’s report. Wildfires, hurricanes, hail and severe storms all feed into what insurers expect to pay out.

More claims, and costlier ones

The NAIC’s 2026 analysis found that both the number of claims and the average cost of each claim generally rose over the 2018 to 2024 period, particularly from 2021 on. When insurers pay more per claim, they raise rates to cover it.

Higher rebuilding costs

Premiums follow the cost of repairs. Construction costs depend on materials, labor and local building codes. Stricter codes in high-risk areas can make repairs more expensive, even though stronger homes may reduce damage over time.

Fewer renewals in some markets

The same NAIC analysis found that the rate at which insurers chose not to renew policies rose by between 96% and 216% from 2018 to 2024, depending on the region. If your insurer won’t renew your policy and you can’t find coverage elsewhere, your state may have a FAIR plan or other insurer of last resort. These plans typically offer more basic coverage, and your state insurance department can tell you what’s available.

How your coverage choices change the price

What a standard policy covers

Most homeowners policies bundle several coverages. The NAIC lists typical limits, though yours may differ:

Coverage	What it pays for	Typical limit
Dwelling	Damage to your house and attached structures	You choose
Other structures	Fences, sheds and detached garages	10% of the dwelling limit
Personal property	Your belongings, even away from home	50% of the dwelling limit
Loss of use	Extra living costs while your home is repaired	20% of the dwelling limit
Personal liability	Legal costs if you’re responsible for someone’s injury or property damage	You choose
Medical payments	Medical bills for people hurt on your property	You choose

Replacement cost and the 80% rule

You can insure your home and belongings for replacement cost, which pays to rebuild or repair with materials of similar kind and quality, or for actual cash value, which subtracts for age and wear. Actual cash value costs less but often doesn’t pay enough to fully repair the damage.

Keep your dwelling coverage close to the full replacement cost. If it drops below 80% of what it would cost to replace your home, your insurer may reduce what it pays on a claim. An inflation guard endorsement can raise your dwelling limit each year in line with inflation.

Deductibles

A higher deductible lowers your premium because you pay more of each claim yourself. A policy with a $1,000 deductible costs less than the same policy with a $500 deductible. Some areas also have catastrophe deductibles, such as for hurricanes, set as a percentage of your coverage rather than a dollar amount.

Weigh the savings against the risk. If raising your deductible by $1,000 saves $150 a year, it would take nearly seven claim-free years for the savings to cover the extra amount you’d pay on one claim.

What standard policies leave out

Homeowners policies don’t cover flood damage. You can buy flood insurance through the National Flood Insurance Program or a private insurer, and your lender will usually require it if your home is in a flood zone. Earthquake coverage is usually sold as a separate policy or an endorsement. In some coastal areas, policies exclude wind and hail, which then need separate coverage. Most policies also offer limited or no coverage for sewer backups and mold unless you add an endorsement.

How to compare quotes and manage the cost

• Shop around with the same coverage. Ask each insurer for the same limits, deductible and endorsements, and give each one the same details about your home. Get quotes in writing.
• Ask about every discount. Bundling, security devices and home updates can all lower the price.
• Check your state insurance department. Some publish premium comparison guides, and many post complaint information about insurers.
• Think before filing small claims. Claims can affect your premium and whether your policy is renewed. If a repair costs little more than your deductible, paying it yourself may make sense.
• Review your policy every year. Update your coverage after renovations or big purchases, and keep a home inventory with photos.
• Pay on time. Most insurers don’t offer a grace period on premium payments.

If you have a mortgage, your lender will likely require coverage for as long as you have the loan. When premiums rise, your monthly payment can rise too if you pay insurance through an escrow account. If your coverage lapses, your lender will likely buy a policy for you, and that coverage can cost much more than one you’d buy yourself while protecting only the structure. It’s also separate from private mortgage insurance, which protects the lender, not your home.

Frequently asked questions

How much does homeowners insurance cost per month?

The NAIC’s average HO-3 premium of $1,737 for 2023 works out to about $145 a month. Your cost could be much higher or lower depending on your state, your home’s rebuilding cost and your coverage.

Why is my home insurance going up?

Premiums have risen across the country because of larger catastrophe losses, more frequent and more expensive claims, and higher costs to repair and rebuild homes. Your rate can also rise if your home’s rebuilding cost goes up, you file claims or your insurer reprices risk in your area.

How much is homeowners insurance on a $400,000 house?

It depends on the cost to rebuild the home, not its price. In the NAIC’s 2023 data, the average HO-3 premium for dwelling coverage between $400,000 and $449,999 was $1,679. Premiums in high-risk states can be far higher.

Does homeowners insurance cover floods?

No. Standard homeowners policies don’t cover flood damage. You need a separate flood policy from the National Flood Insurance Program or a private insurer.

What is the 80% rule in homeowners insurance?

If your dwelling coverage falls below 80% of your home’s full replacement cost, your insurer may reduce what it pays on a claim. Reviewing your coverage regularly, or adding an inflation guard endorsement, helps you stay above that level.

Can my insurance company drop me?

For a new policy, an insurer can usually cancel for any reason during a short initial period, often 60 days. After that, it can generally cancel only if you don’t pay, misrepresented facts on your application or your risk changed substantially. An insurer can choose not to renew your policy, but it must give you notice, typically 30 days before the renewal date, depending on your state.