In this article, we will be navigating through the 15 best states for homeowners insurance in the US. If you wish to skip our detailed analysis, you can move directly to the 5 Best States for Homeowners Insurance in the US.
The Need for Homeowners Insurance
Homeowners insurance is a package policy that typically covers losses and damages to one’s home and personal possessions. Homeowners can also add popular optional coverages such as earthquake, flooding, or water backup coverage. Those who reside near a fault line can benefit from earthquake coverage while water backup coverage can cover losses where water backs up through sewers or drains.
Other than the dwelling coverage, homeowners might also need extended replacement cost coverage which allows adding to the dwelling coverage if the base amount is not ample to rebuild, or guaranteed replacement cost coverage under which the homeowner insurance policy covers the cost to rebuild the house. Personal belongings that get stolen or damaged are often covered. Simultaneously, liability coverage takes care of any bodily injury or property damage to others. In case the homeowner is not able to live in the home due to a problem covered by the policy, the additional living expenses coverage pays the extra costs.
Current Dynamics in the US Home Insurance Market
Accessibility and availability of affordable homeowners insurance in the US is a major concern. A climate insurance bubble was witnessed across the country in 2023, especially affecting risky areas. On March 14, Fortune reported that currently, more than one in four homeowners in the US with insurance seem worried that their homes are going to be uninsurable in 2024, based on a recent ValuePenguin survey. While hikes in homeowners insurance premiums were recorded in 2023, the major reason behind them was climate change. Properties within the country tend to be more damaged once hurricanes, wildfires, floods, and extreme weather conditions take place. A prime example of these circumstances is California, a victim of wildfires and floods, where costs have increased by more than 300% in some places between 2020 and 2023. During 2023, those residing in Florida have paid premiums about four times relative to the rest of the US. You can also take a look at states with the most expensive home insurance.
States more prone to natural disasters such as California and Florida have witnessed home insurers simply not providing insurance there or insurance businesses exiting these states. Leading insurers such as State Farm and AllState announced to stop offering insurance policies in California. The reasons behind these decisions were cited to be increasing exposure to natural disasters, rising construction and repair costs, and higher frequency of severe weather. The impact of natural catastrophes is immense considering a recent analysis by First Street Foundation, which indicates that 23.9 million American properties face the risk of damaging winds, while 4.4 million properties are vulnerable to wildfire. Flooding is another significant risk for 12 million properties in the US.
Leading Insurers at a Glance
Major players in the home insurance market include Chubb Limited (NYSE:CB), Erie Indemnity Company (NASDAQ:ERIE), and Aon plc (NYSE:AON). Let’s take a look at what these companies have been up to. You can also take a look at some of the best home insurance companies heading into 2024.
Chubb Limited (NYSE:CB) is the parent company of the global insurance provider, Chubb, which offers insurance products covering property and casualty, accident and health, reinsurance, and life insurance. Chubb’s homeowner insurance policies are available across all US states. On March 18, Chubb Limited (NYSE:CB) reported the launch of a global transactional risk platform. As a global insurer, this development will enable the firm to provide transactional risk liability insurance products internationally. A new international business lead has also been appointed to expand the company’s transactional risk practice outside of North America.
Based in Pennsylvania, Erie Indemnity Company (NASDAQ:ERIE) is another property and casualty insurance company offering auto, home, business, and life insurance using a network of independent insurance agents. It operates in numerous US states including Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Wisconsin. On January 18, the company reported that its venture capital arm ‘Erie Strategic Ventures’ will be investing in three new portfolio companies including Wagmo, Roots Automation, and Trust & Will. Erie Strategic Ventures invests in the personal and commercial insurance value chain and helps Erie Indemnity Company (NASDAQ:ERIE) support portfolio companies and strengthen its industry position. Currently, the company serves as the United States’ 12th largest homeowners insurer, 13th largest commercial lines insurer based on direct premium written, and the 12th largest automobile insurer. The best auto insurance companies heading into 2024 have been previously discussed.
Aon plc (NYSE:AON) is a British-American professional services and management consulting firm. The firm offers standard home, condo, and tenant insurance. The company also provides property insurance for cottages, trailers, secondary dwellings, and farms. On February 21, Aon plc (NYSE:AON) reported an update regarding the previously announced acquisition agreement with the leading middle market property and casualty broker, NFP. The companies announced the expiration of the waiting under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. By mid-2024, the transaction is forecasted to close until then the two companies will be working independently.
Now that we have analyzed the home insurance situation in the US, let’s move to the 15 best states for homeowners insurance in the country.
15 Best States for Homeowners Insurance in the US
15 Best States for Homeowners Insurance in the US
Our Methodology:
In order to compile a list of the 15 best states for homeowners insurance in the US, we acquired the latest data on state-level home insurance rates. This data was available on Bankrate, a leading consumer financial services company. The latest data was available, as of February. We selected average annual premium as our primary metric while average monthly premium was chosen as our secondary metric. This is because we have considered the cost factor for determining how convenient the states are for homeowners. As aforementioned, this addresses the affordability concern for many Americans with respect to homeowners insurance. Please note that home insurance rates depend on other factors such as claims history, dwelling age, and square footage as well.
Bankrate has used premium data from Quadrant Information Services to get the most recent home insurance rates by state for $250,000 in dwelling coverage. These rates are based on 40-year-old male and female homeowners who have good credit and a clean claim history. Additionally, the homeowners have a $1,000 deductible and a wind and hail deductible if it is required.
Finally, we ranked the 15 best states for homeowners insurance in the US in descending order of their average annual premium and average monthly premium.
15 Best States for Homeowners Insurance in the US
15. Washington
Average Annual Premium: $1,157
Average Monthly Premium: $96
As of February, the average annual cost of home insurance is $1,157 in Washington which is below the national average. The cheapest cities for homeowners insurance in the state include Woodland, Ridgefield, Vancouver, and Keyport. Hence, Washington ranks as one of the best states for homeowners insurance in the US.
14. Virginia
Average Annual Premium: $1,154
Average Monthly Premium: $96
Virginia recorded an average annual premium of $1,154 and a monthly premium of $96, thereby ranking as another state deemed good for homeowners insurance. Homeowners can especially seek low rates in Hamilton, Ashburn, Purcellville, and Round Hill. All of these places offer home insurance rates relatively cheaper.
13. Maine
Average Annual Premium: $1,147
Average Monthly Premium: $96
The average annual home insurance premium is one of the lowest in Maine and was recorded at $1,147 in February. Although the home insurance costs are relatively higher as compared to surrounding states such as Vermont and New Hampshire, it is still affordable relative to many other US states. Therefore, Maine ranks among the best US states for homeowners insurance.
12. Wyoming
Average Annual Premium: $1,044
Average Monthly Premium: $87
The best states for homeowners insurance rank Wyoming as well. It is a state in the Mountain West subregion of the Western US. As of February, the state has an annual home insurance cost of $1,044 while the monthly premium is $87.
11. Wisconsin
Average Annual Premium: $1,026
Average Monthly Premium: $85
Wisconsin is less vulnerable to natural disasters or property crimes. The average annual cost of homeowners insurance in the state is $1,026, as of February. Oostburg, Cedar Grove, Random Lake, and Waldo are the cheap cities for homeowners insurance in Wisconsin.
10. Alaska
Average Annual Premium: $1,019
Average Monthly Premium: $85
Alaska has an average annual homeowners insurance premium of $1,019 and a monthly premium of $85. Angoon, Tenakee Springs, and Gustavus are places in Alaska where homeowners can find the most affordable rates.
9. Idaho
Average Annual Premium: $1,014
Average Monthly Premium: $85
Idaho ranks as one of the states considered to be the best for homeowners insurance in the US. As of February, the state has an average annual home insurance premium of $1,014. Rates are higher in the state’s neighbors, Montana and Washington. Affordable cities in this regard include Meridian, Kuna, and Star.
8. Pennsylvania
Average Annual Premium: $968
Average Monthly Premium: $81
As of February, the average cost of homeowners insurance per year is $968 in Pennsylvania. Surrounding states including New York and Maryland boast higher premiums for homeowners insurance. For the lowest rates within the state, homeowners can resort to places such as Locust Gap, Dornsife, Dushore, and Sunbury.
7. Utah
Average Annual Premium: $955
Average Monthly Premium: $80
Utah records an average annual homeowners insurance cost of $955. This is the 7th lowest annual insurance cost among all states in the US thereby deeming the state a good choice for homeowners insurance. Kanarraville, Syracuse, Clearfield, and Layton tend to offer cheap insurance rates within the state.
6. Oregon
Average Annual Premium: $954
Average Monthly Premium: $79
Oregon ranks as one of the 15 best states for homeowners insurance in the US. The state’s average annual premium for home insurance was recorded at $954 in February. Simultaneously, the average monthly premium was $79. The most affordable rates within Oregon can be found in Beaverton, Cornelius, Manning, and Forest Grove.
