In this article, we will be analyzing home insurance in the US while covering the 15 states with the cheapest home insurance in the country. If you wish to skip our detailed analysis, you can move directly to the 5 States with the Cheapest Home Insurance in the US.
The US Home Insurance Market: An Overview
Home insurance covers damages to one’s home in case of a natural disaster such as a storm, hurricane, wildfire, or an injury on the property. The home insurance cost differs depending on numerous factors such as the location, square footage, and the age of the house. Typically, a home insurance policy provides dwelling coverage for rebuilding or repairing, personal property coverage, as well as liability coverage against accidents caused to others. Most frequently, damages related to earthquakes and floods are excluded from home insurance policies.
The United States remains vulnerable to natural calamities including wildfires, floods, tornadoes, and storms. On September 13, 2023, Reuters reported that the 23 disasters that had hit the US in 2023 have cost $57.9 billion in damages. 253 fatalities took place during these disasters. Outdated building codes that do not cater to the current climate dynamics also expose many Americans to the damage that could be caused during a potential disaster. Furthermore, rising labor costs, construction costs, and material costs for rebuilding led to higher home insurance costs in 2023. The country has seen a rise in property replacement costs as well. These conditions have been prevailing in the industry as home insurance premiums soared from 2022 to 2023, on average.
The American home insurance market has witnessed higher claims due to a surge in climate-related disasters. In order to mitigate this risk, home insurers have increased insurance rates. This has resulted in higher premiums, especially in states which have a higher risk of these disasters. This is because home insurers in these places tend to pay out high amounts in claims related to natural disasters. Hence, climate change poses a serious threat to the industry. A prime example of a US state being affected by natural disasters is Florida. The high risk of hurricanes and flooding in the state has impacted its home insurance market. Many home insurers have left the market or have been driven out of business since offering policies has become way too costly. Climate change does not only affect the companies since homeowners also find home insurance policies relatively difficult to afford in such circumstances. Increasing construction of homes in disaster-prone areas in America also tends to be an issue. You can also take a look at states with the most expensive home insurance in the US.
Home Insurers Leading the Market
The United States is home to many companies which offer home insurance against potential risks. Some of the major home insurers in the US include Chubb Limited (NYSE:CB), The Allstate Corporation (NYSE:ALL), and The Travelers Companies, Inc. (NYSE:TRV). You can also read about some of the best home insurance companies heading into 2024 and the best manufactured home insurance companies heading into 2024.
Chubb Limited (NYSE:CB) is a global insurance provider. It offers commercial and personal property and casualty insurance through its subsidiary, Chubb. On December 19, 2023, Chubb Limited (NYSE:CB) reported extreme weather as the most cited risk to homes, among wealthy Americans and Canadians. A survey of high-net-worth individuals in the US and Canada further revealed that weather-related water damage was an important concern among 63% of the respondents while 31% of them were concerned with the risk of a wildfire. Homeowners in the US and Canada have also taken preventative measures such as installment of whole-house generators and water-leak detection sensors. Wildfire mitigation has also been implemented as a solution.
The Allstate Corporation (NYSE:ALL) is another American home insurance company. On December 14, 2023, The Allstate Corporation (NYSE:ALL) reported its implemented homeowners insurance rates for November 2023. The company observed a 12.6% year-over-year increase in homeowners insurance average gross written premium in November 2023. This increase was due to the rate increases as well as the inflation in insured home replacement costs.
The Travelers Companies, Inc. (NYSE:TRV) provides property casualty insurance for auto, home and business. It offers homeowners coverage depending on the client’s needs and budget. On January 2, the company reported that it has acquired Corvus Insurance Holdings, Inc. Since Corvus specializes in cyber insurance solutions, the firm will be assisting The Travelers Companies, Inc. (NYSE: TRV) in reducing their clients’ exposure to cyber attack events.
Now that we have taken a look at the American home insurance market, let’s move to the 15 states with the cheapest home insurance in the US.
15 States with the Cheapest Home Insurance in the US
Our Methodology:
In order to compile a list of the 15 states with the cheapest home 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 December 2023. We selected average annual premium as our primary metric while average monthly premium was chosen as our secondary metric.
Finally, we ranked the 15 states with the cheapest home insurance in the US based on their average annual premiums and average monthly premiums, on a priority basis.
15 States with the Cheapest Home Insurance in the US
15. Washington
Average Annual Premium: $1,106
Average Monthly Premium: $92
The average annual home insurance premium in Washington is $1,106. Port Gamble, Keyport, and Poulsbo are cheaper cities in this regard. Although the state is subject to risks such as earthquakes, wildfires, and unfavorable weather conditions, the home insurance cost is relatively low. Hence, Washington is one of the 15 states with the cheapest home insurance in the US.
14. Virginia
Average Annual Premium: $1,103
Average Monthly Premium: $92
Virginia is one of the US states that offer the lowest home insurance cost in the country. The average annual premium for home insurance in the state is $1,103. Ashburn, Hamilton, and Round Hill tend to be particularly cheaper cities for home insurance in Virginia.
13. Nevada
Average Annual Premium: $1,057
Average Monthly Premium: $88
In Nevada, the average annual home insurance premium is $1,057 which makes it one of the 15 least costly states for home insurance in the US. Boulder City, Round Mountain, and West Wendover are less expensive places for home insurance in the state. Nevada is also less vulnerable to extreme weather and wildfire than neighboring states.
12. Alaska
Average Annual Premium: $1,027
Average Monthly Premium: $86
Alaska ranks as one of the least expensive states for home insurance in the United States. The average annual home insurance premium in the state is $1,027 while the cheapest cities for home insurance include Angoon, Tenakee Springs, and Homer. The state remains prone to earthquakes, flooding, and severe weather conditions.
11. Wisconsin
Average Annual Premium: $991
Average Monthly Premium: $83
The average home insurance cost in Wisconsin is lower than the average in the US. The average annual premium for home insurance is $991 in the state. Cheap places for home insurance are Oostburg, Cedar Grove, and Waldo. Hence, Wisconsin is one of the 15 states with the cheapest home insurance in the US.
10. Wyoming
Average Annual Premium: $986
Average Monthly Premium: $82
In Wyoming, the average annual premium for home insurance is $986 which ranks the state among other US states with the cheapest home insurance. Cities offering lower costs of home insurance in the state include Dayton, Leiter, and Ranchester.
9. Idaho
Average Annual Premium: $980
Average Monthly Premium: $82
The states with the cheapest home insurance in the US include Idaho as well. The average annual home insurance premium in the state is $980. This cost is lower than the national average. The least expensive cities for home insurance in the state are Meridian, Kuna, and Star.
8. Pennsylvania
Average Annual Premium: $936
Average Monthly Premium: $78
Pennsylvania offers an average annual home insurance premium of $936. The cheapest places in the state in this regard include Locust Gap, Dornsife, and Sunbury. Surrounding states such as New York and Maryland are also more costly than Pennsylvania. Thus, Pennsylvania is a cheap state in terms of home insurance.
7. Oregon
Average Annual Premium: $922
Average Monthly Premium: $77
The average annual premium for home insurance is as low as $922 in Oregon. Beaverton, Cornelius, and Forest Grove are the cheapest cities for home insurance in the state. The weather conditions are relatively less subject to volatility in Oregon. Hence, Oregon is one of the states with the cheapest home insurance in the US.
6. Utah
Average Annual Premium: $904
Average Monthly Premium: $75
Utah ranks as one of the 15 states with the cheapest home insurance in the US. The least expensive places for home insurance in the state include Syracuse, Farmington, and Woods Cross. The average annual home insurance premium in Utah is $904. This is also lower than the home insurance costs in Utah’s neighboring states such as Colorado and Nevada.
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Disclosure: None. 15 States with the Cheapest Home Insurance in the US is originally published on Insider Monkey.
