Homeowners and Renters Insurance Costs by State (Ranking + Advice)

It’s simple: homeowners and renters insurance are among the most important protections any resident can purchase. The latest data reveals that:

In 2017, the average cost for home insurance in the United States was $1,211 a year, and the average cost for renters insruance was $180.

Naturally, homeowners and renters insurance costs by state will vary according to the amount of coverage you purchase and the perils you choose to cover in your policy.

Today, we’re digging deeper into the most important basics behind both types of insurance. This includes how homeowners and renters insurance rates are determined, average rates in each state, and the smartest way to shop for both. Finally, we’ll wrap up by covering some of your home and renters insurance rates FAQs (frequently asked questions).

Ready to find the best homeowners or renters insurance rates now? Start comparing quotes by entering your ZIP code into our free insurance comparison tool.

How Homeowners and Renters Insurance Costs By State Are Determined

When it comes to the difference between homeowners and renters insurance coverage, this is what you need to know:

Homeowners insurance covers actual building or structure, and renters insurance covers the personal property of a tenant.

While the way underwriters determine the premiums you pay for a homeowners or renters insurance policy may seem mysterious, it really isn’t. An insurance company’s rates are generally based upon a number of criteria. Here are some examples:

• Age of the house, apartment building, or condominium. Older houses usually cost more to insure due to the condition of their heating, plumbing, wiring, and roofing; whereas, new buildings often receive credits or discounts for their newer systems.
• Construction of the building. Frame houses cost more to insure than brick houses because they are more flammable.
• Local fire protection. The distance from fire hydrants and the quality of local fire departments can affect your premiums. The Insurance Services Offices has a national rating system to apply to each fire district.
• Location. To be more specific, whether you live in rural or urban areas can have bearing on your rates.

Keep in mind, some personal factors can also come into play when determining homeowners or renters insurance costs. For instance, those with lower credit scores may end up paying higher premiums than their neighbors. Other contributing factors can include qualifying discounts, as well as the deductibles you end up choosing.

Still not 100 percent sure what homeowners insurance is or what it covers? Check out this helpful overview video on that:

https://www.youtube.com/watch?v=JPbFC_VmIvs

Variations in Home and Renters Insurance Rates From State to State

Location, location, location. As we just mentioned, location is another key factor in how your homeowners or renters insurance costs will be determined. Insurance rates vary from state to state for a number of reasons. Some of these variations are due to:

• Weather patterns in your state. For example, a state prone to hurricanes will have different loss ratios from one with a pattern of tornadoes.
• Climate. High contrast between heat and cold; very damp; extremely arid
• City size and crime. To be more specific, factors such as urban and non-urban population, as well as rates of crime such as vandalism and theft are considered.
• The general terrain of the area. Mountains, forests, rivers, and plains can all make a difference in the losses occurring in a state and thus the insurance rates

Now that we have some of these basics out of the way, let’s talk homeowners and renters insurance costs by state.

Average Cost of Homeowners Insurance by State

We get it. You want to know which states have the best home insurance rates.  To get answers, we turned to the Insurance Information Institute for the latest data representing all 50 states, plus Washington, D.C.

Here’s a complete listing of average homeowners insurance rates across the nation as of 2017, ranked from the lowest to the highest:

In reviewing this data, we can see that the five states with the lowest average premiums are:

1. Oregon, $677
2. Utah, $692
3. Idaho, $730
4. Nevada, $755
5. Wisconsin, $779

On the flip side, the five states with the highest average premiums are:

1. Louisiana, $1,968
2. Florida, $1,951
3. Texas, $1,893
4. Oklahoma, $1,885
5. Kansas, $1,584

It’s clear: the difference in home insurance costs among the states with the highest and lowest average premiums is significant. In fact, Louisiana’s average annual home insurance premium is nearly three times than what Oregon residents pay.

What should also be noted about the five states with the highest average homeowners insurance premiums are their geographical locations and weather patterns.

Take Florida, for instance. Numerous studies show that thousands of people from all over the U.S. are relocating to the Sunshine State each month. Without a doubt, many will choose to buy a home in Florida because of its warm climate and tourist destinations. You can also bet that real estate market is extremely active, with agents even working to buy leads and capitalize on the market.

However, like Lousiana and Texas, Florida is located along the Gulf of Mexico and is exposed to a number of hurricanes. Costs associated with hurricanes can, no doubt, play a huge role in increasing premiums for residents. As for Oklahoma, this state is notorious for having frequent tornadoes.

Average Cost of Renters Insurance by State

Now that we’ve taken a closer look at homeowners insurance rates, let’s examine average renters insurance premiums by state. In looking at the same data from III, we have an overview of all 50 states, plus Washington, D.C.:

The five least expensive states for renters insurance costs are:

1. North Dakota, $120
2. South Dakota, $123
3. Wisconsin, $134
4. Minnesota, $140
5. Nebraska, $143

As for the top five most expensive states for renters insurance, they are:

1. Mississippi, $258
2. Oklahoma, $236
3. Alabama $235
4. Louisiana, $235
5. Texas, $232

In comparing the most expensive state for renters insurance (Mississippi) and the least expensive state (North Dakota), this data reveals that renters living in Mississippi are paying twice what residents in North Dakota are.

Keep in mind, all of these are average costs. As you make adjustments to your policy, you can expect to pay more or less.

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Purchasing Homeowners And Renters Insurance Coverage

Now that you have a better grasp of the average homeowners and renters insurance costs by state, you can begin to make more informed decisions about what kind of coverage you want.

Here is a step-by-step guide to help move the process along:

Step #1 – Consider the Value of the Property 

When estimating the replacement cost of your home, should you own it, begin with an online cost estimator. Recognize that the cost of the property, i.e. lot, should not be included in the building coverage.

If you are planning to cover only the contents of the home, as you would under a renter’s policy, begin with a home inventory. The inventory will give an idea of the replacement cost for the contents of your rental or condominium. Inventories are time-consuming, but well worth the time spent to complete.

Determine the limits of liability you need to protect yourself should someone decide to sue you because of a problem at your home, whether rented or not. Liability coverage under a homeowner’s policy is broad and usually follows members of the household. This liability coverage is valuable in scope because it covers a number of actions that you may not consider.

Step #2 – Determine the Perils You Need Coverage For

A peril is something that can lead to financial loss. This can range from a fire to a break-in. Whether you’re getting homeowners or renters insurance, coverage for perils will always be part of the discussion.

Typical perils that can be covered in a homeowners insurance policy include:

• Fire, smoke, explosion, lightning
• Windstorm, hail
• Trees and other falling objects (but not clean up after the fall)
• Weight of ice, snow, and sleet
• Sudden and accidental freezing, rupturing, or overflow of plumbing, HVAC system, or household appliance

As for perils covered in a typical renters insurance policy, this can include:

• Theft, vandalism, and vehicular damage – not from your own vehicle, though
• Fire, explosion, smoke
• Windstorm, hail, sudden freezing, and failure of plumbing
• Weight of ice and snow
• Sudden overflow of appliances

What’s important to remember is that not every peril is covered by every policy, homeowners or renters. For instance, flooding or earthquake insurance would be additional expenditures for renters and homeowners. If you live in a flood or earthquake-prone area, then you’ll definitely want to consider making those additions to your policy.

Something else you’ll want to consider? Making sure everyone who is part of the household is on the same page. For instance, let’s say you’re renting with a roommate. If the two of you are splitting costs, you’ll want to be sure you agree on all coverages — right down to the dollar.

Step #3 – Research Homeowners or Renters Insurance Companies

For homeowners or renters insurance quotes, start by choosing at least three companies. The insurance department for your respective state can help you confirm the names of companies licensed within your state. You can additionally consult with the National Association of Insurance Commissioners’ database.

You’ll also want to examine the financial status and complaint ratio of your chosen insurance companies on the following sites:

• Moody’s and Standard and Poor’s are both agencies known to assess the credit ratings of an insurer
• A.M. Best. This rating will give  you a better idea of the insurer’s ability to meet its financial obligations, and overall creditworthiness

Don’t stop with just checking out the company’s credit ratings. Look to research any customer reviews and complaints you can find. A great resource will be with the Better Business Bureau, known for its rankings.

Frequently Asked Questions: Homeowners and Renters Insurance Costs by State

Before we go, we’re digging into some of our most frequently asked questions about homeowners and renters insurance.

#1 – Will homeowners insurance also cover renters insurance?

No, it does not. Remember, homeowners insurance focuses on the building or structure, where renters insurance focuses on a tenant’s personal property. So, if someone is renting space in an apartment or condo, he or she needs to purchase renters insurance.

#2 – Is homeowners insurance more expensive than renters?

Yes.  Where the average cost of renters insurance will generally remain in the one or two hundred dollar range, homeowners insurance can very easily exceed a thousand dollars annually.

#3 – Do I  have to let my mortgage company know if I rent my house?

Although it’s generally a good idea to let your mortgage company know if you’re renting your home, it will not always be a requirement. This will ultimately come down to what’s in your mortgage contract. If you’re unsure about the specifics, seek out an attorney or realtor for assistance.

Homeowners and Renters Insurance Costs by State: A Final Word

Compare the quotes, companies, and assess the premiums, then determine where to purchase your insurance. After receiving your policy, examine it carefully to determine that you understand the contract. Keep it carefully filed along with the research you have done at this point. Plan to do the research again next year.

Now is always a good time to compare homeowners and renters insurance quotes. Start now by plugging your ZIP code into our free quote tool.

Enter your zip code below to view companies that have cheap home insurance rates.

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