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The Cheapest Homeowners Insurance of 2022

Updated Nov 18, 2022

Updated Nov 18, 2022

Home > Home Insurance > The Cheapest Homeowners Insurance of 2022

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Homeowners insurance is a necessity for the peace of mind it provides, but it’s also often required by your lender to protect their investment in your property. Even if you’re a renter, insurance is crucial to cover your belongings and ensure you maintain a place to live in the event of a catastrophe.

While property insurance is essential, it can also be rather expensive, with annual premiums sometimes topping $2,000 and deductibles requiring a massive outlay of cash in the event of a claim. To help you reduce your insurance costs and find the best quality coverage for less, we’ve done some research on the most affordable homeowners insurance available.

This review should help you get the most bang for your buck in terms of a home insurance policy. Start the process of getting homeowners insurance today with any of the providers below.

The Cheapest Homeowners Insurance Companies

We’ve researched dozens of insurance providers to ensure we’re bringing you the most valuable information possible. It’s worth noting that we’ve made some assumptions when getting sample quotes from companies. These include a homeowner age of 40 years old and a home value — not property value — of $325,000. This is around the national average for dwelling value.

Below is a brief list of the best cheap insurance companies we found. We’ll follow this with more in-depth reviews and information for each company in the following sections.

Compare Affordable Homeowners Insurance Companies

The chart below provides a quick look at our top five picks for cheap insurance coverage. We’ll include additional company information for each of these providers in the following sections.

CompanyState FarmLemonadeNationwideProgressiveErie
Compare QuotesGet QuoteGet QuoteGet QuoteGet QuoteGet Quote
Average Monthly Premium$109$116$104$100$109
Average Annual Premium$1,300$1,400$1,250$1,200$1,300
Savings vs. Average$250 in savings per year$150 in savings per year$300 in savings per year$350 in savings per year$250 in savings per year
House Method Star Rating4.84.54.54.74.4
AM Best RatingA++NRA+A+A+

State Farm – Best Overall

Allstate Home Insurance

State Farm is one of the largest insurance companies in the country, with coverage in all 50 states and policies available for home, auto, and more. This company offers affordable coverage, especially if you choose to bundle policies and take advantage of the resulting discounts. State Farm also has an A+ rating with the Better Business Bureau, an A++ rating with A.M. Best, and a relatively high customer satisfaction rating overall.

Why We Chose State Farm

We chose State Farm primarily because of the quality and extent of the coverage you get for the money. It has one of the lowest average premiums according to our research, but the coverage can be customized to meet your needs and suit your situation. You can add protection for personal property and valuable assets held in your home, identity theft, cyber attacks, earthquakes, floods, and more.

State Farm also offers discounts for a variety of situations. You can lower your monthly premium by bundling with auto insurance or life insurance, upgrading your home security, and maintaining coverage without any claims.

Below are a few upsides and drawbacks to working with State Farm for your homeowners insurance.

Pros & Cons of State Farm

Pros

  • Affordable but extensive coverage
  • Lots of customization options
  • Fewer complaints than most other companies
  • Many opportunities for discounts
  • Thousands of local insurance agents across all 50 states

Cons

  • Higher rates than some other companies

Cost and Dwelling Coverage

As is the case with all homeowners insurance companies, the more coverage you need for your dwelling and liability for damage to neighboring homes, the more you’ll pay per year. The chart below provides a quick look at the average costs from State Farm for different dwelling coverage amounts.

Dwelling Coverage Amount$525,000$425,000$325,000$225,000
Annual Cost$1,800$1,500$1,300$900
Savings vs. national average$300 per year$250 per year$250 per year$200 per year

Lemonade – Quickest Claims Process

Quickest Claims Process

Lemonade is one of the youngest insurance providers in the country, having been founded in 2015. It is also currently the smallest one in our rankings, as it serves just 23 states. It’s best known in the industry for modernizing insurance. It operates entirely online and has one of the smoothest and most robust mobile platforms available. Lemonade also provides a nice range of other insurance coverage options, like pet insurance, auto insurance, valuable protection, and more.

Why We Chose Lemonade

Lemonade isn’t the cheapest insurance provider available, but its premiums are still well below the industry average. While it is a bit more expensive, the coverage is also more comprehensive than many competitors. Policies include your home and detached structures, lawsuit protection, medical expenses for guests, your belongings, and even some additional living expenses. You can also customize for a bit more money by adding on coverage for plumbing and water issues, in-ground utilities, additional valuables, and some home systems.

Lemonade keeps costs down, in part, by keeping the employee to policy ratio low — about half of some other leading providers. Plus, it doesn’t pay rent for local branches, so it saves in rent and passes those savings onto customers. Lemonade offers only a few discounts, including lower premiums for installing safety equipment, bundling with other insurance policies, and remaining claims-free.

Below are some of the benefits and downsides of working with Lemonade for your homeowners insurance policy.

Pros & Cons of Lemonade

Pros

  • Includes non-standard coverage for better protection
  • Industry-leading online/mobile platform
  • Excellent selection of optional coverages

Cons

  • No in-person service offered (a con for some homeowners)
  • A bit more costly than competitors
  • Only a few discounts available

Cost and Dwelling Coverage

The chart below includes some average policy prices for Lemonade customers. As is the case with any insurer, these are just estimates and should be used for rough numbers only.

Dwelling Coverage Amount$525,000$425,000$325,000$225,000
Annual Cost$1,750$1,400$1,250$800
Savings vs. national average$350 per year$350 per year$300 per year$200 per year

Nationwide – Best Optional Coverages

Best Optional Coverages

Nationwide ranks ninth in the country by the number of direct premiums written, meaning it’s one of the most popular insurance companies. It provides a massive range of coverage options, including separate policies for homes in gated communities, condos in buildings with 24/7 security, and more. Nationwide also provides the typical insurance options, like life and auto, plus non-standard coverage for weddings, identity theft, umbrella policies, and more.

Nationwide might be a good option for you if you’re looking for affordable coverage plus investing and retirement opportunities. The provider offers annuities, mutual funds, retirement plans, and more to help you save over time.

Why We Chose Nationwide

Nationwide is not only a popular and prevalent company that services 43 states, but it also maintains some of the most affordable homeowners insurance coverage in the nation. With its unique coverage options — like specific plans for home renovation gated communities — and the range of optional coverages — including earthquake, flood, valuable protection, and water backup — you’re sure to find a plan that suits your needs exactly. This helps you get the coverage you need without paying for what you don’t.

Nationwide also provides discounts for a variety of things, including bundling home and auto insurance, smart home upgrades, security system installation, and more. You can also work with your agent to uncover additional discounts, especially if you remain claims-free.

Below are some of the positive and negative aspects of getting your homeowners insurance through Nationwide.

Pros & Cons of Nationwide

Pros

  • Variety of discounts available to bring down costs
  • High degree of plan customization
  • Offers insurance products, financial products, and investment management
  • Includes ordinance or law coverage in policy

Cons

  • Doesn’t cover all 50 states
  • Not the best customer reviews
  • Mobile/online experience is lacking compared to top competitors

Cost and Dwelling Coverage

Dwelling Coverage Amount$525,000$425,000$325,000$225,000
Annual Cost$1,750$1,450$1,250$800
Savings vs. national average$350 per year$300 per year$300 per year$200 per year

Progressive – Best for Affordability

Progressive Home Insurance

According to the Insurance Information Institute, Progressive is the third largest insurance provider in the country by premiums written. Progressive offers a wide range of insurance coverage options, including homeowners insurance, renters insurance, auto insurance, life insurance, and more. Progressive services all 50 states with over 38,000 independent agents. It provides discounts for bundling, and it maintains generally positive reviews online.

Why We Chose Progressive

Progressive is a clear choice because its coverage plans are cheap and robust. In fact, it’s the #1 company we reviewed in terms of affordability, so if you’re looking for the absolute lowest monthly premium for homeowners insurance, this is likely the company for you. It’s important to keep in mind that the customer ratings — specifically for Progressive’s underwriting company — are lower than those for State Farm, but the price is hard to pass up.

Progressive also helps to keep costs low by offering bundling discounts — an average of 5% reduction in your premium — paying your annual premium in full rather than monthly, installing burglar alarms, and installing other safety equipment, like cameras, fire alarms, or automatic sprinklers.

Below are some of the pros and cons of working with Progressive for home insurance coverage.

Pros & Cons of Progressive

Pros

  • Fully online experience available via mobile app
  • A myriad of discounts available
  • Low costs compared to competitors
  • Provides multi-policy discounts (bundling)

Cons

  • Some negative reviews for American Strategic Insurance (ASI), Progressive’s underwriter
  • Not much in the way of plan customization

Cost and Dwelling Coverage

The chart below shows you around what you can expect to pay for homeowners insurance from Progressive based on different dwelling coverage amounts. Keep in mind that these averages include some potential discounts, so your numbers might vary quite a bit.

Dwelling Coverage Amount$525,000$425,000$325,000$225,000
Annual Cost$1,700$1,400$1,200$800
Savings vs. national average$400 per year$350 per year$350 per year$200 per year

Erie – Best for Customer Service

Erie Home Insurance

Erie is the smallest insurer on our list, with a service area covering just 12 states. As a regional insurance provider, Erie excels at providing excellent customer service. It has a 100% customer response rate via the BBB, and it’s tied for third in the country for homeowners insurance policies by J.D. Power. It also upholds higher customer reviews than the industry standard and maintains an A+ rating with A.M. Best.

The company provides auto, home, life, and business policies to meet all of your insurance needs. It has a decent selection of add-on coverage options as well, which include protection for valuables, flood insurance, and service line protection.

Why We Chose Erie

Erie’s premiums are a bit higher than some of the other companies we’ve reviewed here, but it still makes the list because the quality of customer service you get for the money is outstanding. In our opinion, Erie is a great option for customers looking for an affordable insurance policy without sacrificing overall customer experience and satisfaction. Erie also includes a guaranteed replacement for your coverage, which means your coverage amount won’t decrease just because your home or valuables depreciate.

Erie also offers massive bundling discounts between 16% and 25%, with an average around 20%. Like most other providers, Erie also provides lower premiums for homes with upgrade security and safety systems, as well as for homeowners who choose to open or renew a policy 7 to 60 days prior to the existing policy expiring.

Below are some of the pros and cons of working with Erie for your homeowners insurance needs.

Pros & Cons of Erie

Pros

  • Guaranteed replacement coverage included in most policies
  • Unmatched customer service for the money
  • Excellent discounts for bundling
  • Good range of add-on coverage options

Cons

  • Small footprint in just 12 states
  • A bit more expensive than some competitors
  • Not the best online and mobile platforms

Cost and Dwelling Coverage

The chart below provides some rough estimates for what your coverage will cost from Erie based on different dwelling coverage amounts. Keep in mind that these coverage amounts include your structure only and shouldn’t be calculated based on your entire property value.

Dwelling Coverage Amount$525,000$425,000$325,000$225,000
Annual Cost$1,800$1,500$1,300$850
Savings vs. national average$300 per year$250 per year$250 per year$150 per year

Cheapest Homeowners Insurance Rates in Every State

As you may already know, homeowners insurance rates can vary widely by state. The primary reason for this is that home values in different parts of the country can sit hundreds of thousands of dollars apart. The more home value you need to insure, the higher your premiums will be.

The chart below includes a brief look at how average insurance premiums vary by state. It’s important to remember that each state’s average premium can also fluctuate based on your location within the state and often based on proximity to major cities.

StateMedian Home ValueCheapest Home Insurance CompanyAverage Homeowners Insurance Policy Premium
Alabama$134,300Farmers$1,400
Alaska$326,000Country Financial$950
Arizona$257,600Progressive$900
Arkansas$129,500State Auto$1,500
California$550,800Allstate$1,200
Colorado$381,300Auto-Owners$1,600
Connecticut$244,800Progressive$1,500
Delaware$236,300Nationwide$900
Florida$237,900Nationwide$2,000
Georgia$193,500Progressive$1,400
Hawaii$619,000DB Insurance$1,200
Idaho$274,200Farm Bureau$800
Illinois$183,500Allstate$1,150
Indiana$148,700Indiana Farmers Mutual$975
Iowa$146,500West Bend Mutual$950
Kansas$141,500Auto-Owners$1,500
Kentucky$148,400Progressive$1,150
Louisiana$147,600Farmers$2,000
Maine$237,800Vermont Mutual$950
Maryland$290,500Brethren Mutual$1,100
Massachusetts$408,100Preferred Mutual$1,600
Michigan$154,500Westfield$1,000
Minnesota$239,900Auto-Owners$1,450
Mississippi$130,200Allstate$1,100
Missouri$163,700Nationwide$1,600
Montana$242,100Chubb$1,375
Nebraska$169,900USAA$1,500
Nevada$291,800Nationwide$750
New Hampshire$280,400American Family$1,000
New Jersey$329,000Selective$1,200
New Mexico$197,400State Farm$1,150
New York$305,300NYCM$1,300
North Carolina$189,900State Farm$1,200
North Dakota$210,000Agraria$1,200
Ohio$142,600Ohio Mutual$850
Oklahoma$125,400American National$2,050
Oregon$350,600Mutual of Enumclaw$750
Pennsylvania$176,500Penn National$1,000
Rhode Island$284,200Narragansett Bay Insurance$1,750
South Carolina$170,700Chubb$1,300
South Dakota$194,700Nationwide$1,250
Tennessee$170,800Progressive$1,200
Texas$199,900Chubb$2,100
Utah$351,100Mutual of Enumclaw$750
Vermont$210,600Vermont Mutual$950
Virginia$264,200Farmers$1,000
Washington$393,800Mutual of Enumclaw$900
West Virginia$99,000Westfield$1,000
Wisconsin$191,600West Bend$775
Wyoming$236,100Nationwide$1,250

Cheapest Homeowners Insurance Rates in Major U.S. Cities

As mentioned above, homeowners insurance rates can fluctuate even more as you get closer to major cities, which means a policy in or near Manhattan, for example, could cost significantly more than the average policy in New York.

The chart below includes some average property values and policy premiums for the top 20 cities in the country by population.

CityMedian Home ValueCheapest Home Insurance CompanyAverage Homeowners Insurance Policy Premium
Austin, TX$340,000Chubb$2,200
Charlotte, NC$255,000State Farm$1,400
Chicago, IL$252,000Allstate$1,800
Columbus, OH$219,000Ohio Mutual$975
Dallas, TX$225,550Chubb$3,750
Denver, CO$442,000Auto-Owners$2,900
El Paso, TX$152,192Chubb$1,100
Fort Worth, TX$329,000Chubb$3,400
Houston, TX$192,500Nationwide$2,900
Indianapolis, IN$185,000Indiana Farmers Mutual$1,200
Jacksonville, TN$245,000Progressive$1,500
Las Vegas, NV$305,000Nationwide$825
Los Angeles, CA$710,000Nationwide$2,000
New York, NY$450,000NYCM$950
Philadelphia, PA$240,000Allstate$1,900
Phoenix, AZ$308,900Progressive$2,300
San Antonio, TX$175,000Chubb$1,500
San Diego, CA$620,000Oregon Mutual$1,300
San Francisco, CA$930,000Nationwide$2,000
San Jose, CA$1,160,000Nationwide$1,800

How to Find Cheap Homeowners Insurance

Since homeowners insurance policies can reach into the thousands of dollars, most individuals look for ways to save on their premiums. Luckily, there are a few key things you can do to find low insurance premiums. We’ll discuss some of the best options in the sections below.

Shop Around

One of the best and easiest things to do to find the most affordable insurance premium is to get home insurance quotes from a few different companies in your area. If you ask ten different providers for a coverage quote, you’ll very likely get ten different premiums. You can then choose the lowest one to save the most or opt for the best value, which we recommend.

It’s crucial to remember that cheaper doesn’t always mean better, and a lot of careful consideration should be given to what kind of coverage you get for the money. In fact, higher customer satisfaction rates are associated with policies that have good coverage value than those that have low premiums but sacrifice on coverage.

You’ll likely have quite a few insurance companies available to you in your area, so to save time, you can begin by getting quotes from the companies we’ve recommended above. These tend to be the most affordable without sacrificing coverage and quality.

Opt for a Higher Deductible

Your insurance premium is the total amount you pay annually for homeowners insurance, provided you don’t have any claims. Any time you do file a claim, you’ll also pay a deductible, which is the amount of out-of-pocket costs you’re on the hook for before your insurance covers anything.

When you accept higher deductibles, you’re essentially telling your insurer that you’re willing to pay more in the case of a catastrophe, which translates to a lower risk for the company. As such, your premium should decrease the higher your deductible goes. It’s best to find a balance between the two in most cases.

Cover Only What You Need

Every insurance policy and company is different in what they offer coverage for, and you can keep your premium low by opting for a plan that covers only what you need.

For example, homeowners insurance typically includes protection for burglary. If you live in a gated community, though, the risk of burglary is about 33% lower. Your insurer should understand this and offer you a discount on that coverage due to the lower risk.

For homeowners in gated communities, it might be best to choose an insurer who provides specific coverage for their living situation. Otherwise, you might be paying more for coverage you don’t need.

Bundle Your Insurance Policies

Most insurance providers offer discounts to customers who bundle multiple policies together. Discounts for coupling home and auto insurance can range from 5% up to 25% or more. With the average policy sitting around $1,550 per year, you could save between $75 and $388 per year by bundling.

Some companies provide additional insurance options, like life insurance and pet insurance. You might get added discounts for each policy you include in the bundle.

However, it’s worth noting that, according to a press release from J.D. Power & Associates, bundling is becoming less and less of a benefit to homeowners. Auto insurance premiums are on the rise, so it’s often worthwhile to shop around for auto insurance rather than opt for the same insurer that covers your home.

Ask Your Insurer About Discounts

Many insurance companies offer additional discounts on premiums, so it’s a good idea to ask your policyholder about options. Most will offer policy deductions for things that decrease the insurance company’s risk. These include things like:

  • Installing an alarm system in your home
  • Installing fire and CO detectors
  • Installing an impact-resistant roof
  • Working from home or retiring
  • And more

Maintain a Good Credit Score

Insurance companies often use credit reports to calculate their risk of insuring your home, and they tend to provide lower home insurance rates to customers who have above-average credit scores.

To maintain a healthy credit score, you can pay all of your bills on time, pay off as much credit as possible to maintain low credit usage, and report errors by monitoring your credit report and disputing any issues.

Start Looking for Insurance Before You Actually Need It

Finally, many insurance providers will offer discounts for proactive homeowners seeking insurance. The companies we’ve reviewed above all offer lower premiums if you secure your insurance policy in advance of when you need it. An effective date closer to when you need it will usually cause a small increase in your premium.

Cheap Home Insurance for Homeowners in Different Situations

There are a few different situations you might be in that could affect what you pay for homeowners insurance. Things like your credit score, the age of your home, when you purchase your home, and other factors will all play a role in what you pay from different providers.

In the sections below, we’ll explain how these criteria can affect your annual premiums and the best homeowners insurance companies to choose for each situation.

Cheapest Home Insurance Based on Credit

Insurance companies in most states are legally allowed to base your premiums, at least in part, on your credit score. The reason for this is that companies have found that homeowners with lower credit scores are more likely to file insurance claims, which means an increased risk for the insurer. Additionally, these individuals are statistically less likely to maintain their properties.

The only exceptions to using credit for policy pricing are California, Maryland, and Massachusetts. In all other states, having a below-average or poor credit score can and likely will mean higher premiums. However, each insurer handles credit scores differently. As such, it’s often helpful to choose the provider that weighs credit score the least or offers below-average rates for customers with low credit scores.

Progressive Insurance often has the lowest rates for individuals with poor credit. The average insurance policy from this company for those with poor credit is around $2,150 per year or around $179 per month.

Below are some average premiums you might expect based on where your credit score lies. This is for comparison purposes only, as these numbers assume an average home value and average values for several other important criteria.

Credit ScoreAverage Annual PremiumAverage Monthly Premium
Poor (500-600)$2,150$179
Average (600-700)$1,950$162
Good (700-800)$1,750$145
Excellent (800+)$1,550$129

Cheapest Home Insurance for New Homeowners

Many of the larger insurance companies in the country provide discounts on premiums for first-time homebuyers. This discount is based less on risk and more on lowering the cost of homeownership for buyers. The likelihood is that companies also offer this to establish a relationship with new insurance customers, as this is beneficial to them long term.

Of the companies we’ve reviewed above, only Progressive offers a discount for new homeowners. It doesn’t disclose the discount amount, so you’ll have to reach out to a local agent or request a quote online for more information.

While it doesn’t provide a specific discount for new homeowners, Nationwide provides a premium reduction for coverage on all newly purchased homes, provided you bought within 12 months of getting your coverage.

Finally, many insurers provide lower premiums for new construction. New homes are less likely to run into certain issues stemming from utilities and foundation problems, so insurers keep premiums low because of the lessened risk of providing coverage.

Cheapest Home Insurance for Wind or Water Claims

According to the Insurance Information Institute, nearly half of all claims filed are due to property damage from wind or hail, and another 20% are due to flooding and water damage. With nearly 70% of all claims stemming from wind and water damage, it should come as no surprise that coverage for these items will drive up your premium.

In fact, most insurance companies don’t include coverage for wind or water damage in their coverage and instead offer them as add-on options.

The average annual amount you’ll have to add for wind coverage is around $300. The average annual amount to add flood coverage is around $700. These numbers can fluctuate by hundreds of dollars based on the value of your home, your location, and how big of a risk windstorms, hurricanes, tornadoes, and floods are in your area.

For wind damage, your local insurer will likely need to provide a customized policy for you. For flood damage, you can gauge roughly how much extra you’ll pay for insurance by looking at your flood zone flood maps provided by the Federal Emergency Management Agency (FEMA).

Of the companies listed above, Erie has the cheapest rates once you add in flood and/or wind coverage. However, this insurer is only available in 12 states, so it might not provide service in your location. If that’s the case, Progressive and State Farm also have relatively low add-on rates for wind and flood coverage.

It’s also worth noting that State Farm has some of the most affordable premiums for homeowners who have filed a past wind or flood claim, averaging around $1,600 per year or $133 per month.

Cheapest Home Insurance with High Deductibles

Generally speaking, paying higher deductibles will translate to lower annual premiums. The reason for this is that the insurance company pays less per claim when you agree to pay higher deductibles, so they take on less risk.

State Farm offers some of the best home insurance plan customization, including a wide range of deductibles you can choose to alter your premium. You could be looking at an annual premium of under $1,000, or a monthly premium of just $83.

Below is a chart that provides average annual premiums based on the deductible you choose. Keep in mind that not all insurers offer all of these deductible options.

DeductibleAverage Annual PremiumAverage Monthly Premium
$500$2,000$166
$1,000$1,800$150
$1,500$1,700$125
$2,000$1,550$129
$2,500$1,300$108

Cheapest Small Home Insurance Companies

Smaller home insurance companies — like those that are regional or only operate within a single state — tend to be more expensive per month than the industry leaders, like State Farm and Progressive. However, the trade off is that you usually get far better customer service and responsiveness, given the personalization the company can provide.

If you believe having access to quality customer service is more beneficial than paying the least for your premium, then you’re probably better off with a smaller insurance provider.

One of the best options is Erie. This company only covers 12 states, but it maintains premiums below the industry average and delivers outstanding service to all of its customers. It also maintains better online reviews than most competitors.

Cheapest National Home Insurance Companies

As mentioned above, national insurance companies are often able to provide lower premiums because they have more underwritten policies to protect their upside. Some of them also use complex algorithms that take local factors into account to provide the lowest premiums possible.

Progressive comes in with the lowest annual coverage costs overall, with an average policy premium of just $1,200 — a monthly outlay of $100. State farm and Nationwide also provide appealing premiums, averaging $1,300 and $1,250 per year, respectively. All of these are well below the national average of $1,550.

Cheapest Home Insurance for Home and Auto Bundles

Bundling your home and auto insurance policies almost always leads to savings, as most companies provide premium reductions for bundles.

While Progressive has the lowest overall premium, Erie provides more appealing bundling deals to drive prices down as much as possible.

Progressive’s discount for bundling is 5%, which brings the annual premium down to $1,140. Erie’s average premium is $1,300, but with bundling discounts of up to 25%, you could bring your annual payment down to $975.

How to Save on Home Insurance

There are a few things you can do to bring your home insurance costs down, sometimes rather significantly.

First, you can bundle your home insurance with other policies. Most companies provide discounts between 5% and 25% for property owners who open multiple policies.

Second, you can improve the safety of your home to reduce the risk of burglary. Providers will often provide discounts if you lessen their risk by installing alarm systems or impact-resistant windows.

Third, you can protect your home from weather-related damage to reduce your insurer’s risk and your premium. Some companies offer discounts for installing impact-resistant roofs and hurricane windows, and for carrying out other safety-related home improvements.

Finally, you can change your plan to lower replacement costs — if your home or other insured items depreciate — or to raise your deductible. Both of these things will generally lead to lower overall insurance costs.

How Much Does Homeowners Insurance Cost?

The average homeowners insurance policy in the U.S. costs around $1,550. However, it’s not uncommon to see annual premiums as low as $350 or as high as $3,000 or more. Your annual cost will fluctuate based on many different factors. These include:

  • Credit score
  • Income
  • Home value
  • Location
  • Claims history
  • When you’re purchasing your policy
  • When you purchased your house
  • Home’s age
  • Proximity to large bodies of water
  • Risk of wind damage in your area
  • Risk of hurricanes and tropical storms in your area
  • Risk of earthquakes in your area
  • Deductible you choose
  • Add-on coverage you choose
  • And more

The best way to get an idea of what your particular policy will cost is to reach out to a few different insurance companies for quotes.

Typical Homeowners Insurance Discounts and Deals

One thing that can affect your insurance pricing is the discount potential offered by your insurer. Most companies offer discounts or deals based on your other policies and the risk they’re assuming by insuring you. We’ll discuss some of the most appealing and popular discounts you’ll see in the industry below.

Home and Auto Bundling

Home and auto bundling has been a staple of the insurance industry for decades now, and it has regularly led to lower premiums overall, often for both policies. However, bundling is never a guarantee of a lower insurance cost, so you’ll have to check with your provider for discounts provided.

J.D. Power recently reported that bundling insurance policies is becoming less appealing because auto insurance rates are on the rise. This means that more and more people are turning to auto-specific insurers for the lowest rates, which sometimes leads to lower overall costs than if you bundled policies.

Home Upgrades

Insurance premiums are based on risk assumed by your provider, so lessening their risk will often lead to lower costs for you.

Some ways to make your home less prone to accidents that lead to claims include updating electrical and plumbing systems and replacing your roof within the normal lifespan. You can also upgrade to impact-resistant roofing and windows. These upgrades will be especially helpful in areas where extreme weather — like tornadoes and hurricanes — tend to drive up insurance costs.

It’s a good idea to check with your provider what other home upgrades could lead to reduced rates.

Home Safety and Security Systems

As we mentioned above, protection against burglary and theft are typically included in homeowners insurance coverage. When you install equipment to provide better protection for your home — like home security systems — you lessen the risk of these losses, which often leads to lower premiums.

Similarly, installing fire alarms that communicate directly with your local fire department and water line monitors and shut-offs that cut your water supply when a leak is detected also lessen the risk of extensive fire and water damage. Installing these systems and other safety equipment can help keep your insurance premium down.

Clean Claims Record

Finally, just like with car insurance, homeowners insurance premiums tend to go up as you file more claims. If you have a history of insurance claims, you can expect your insurer to see you as more of a risk and charge more for coverage.

A history of claims on your particular home can also trigger increases in premiums. For example, if the prior owner of your property filed numerous claims for theft, flooding, or damage from extreme weather, your costs will likely be higher.

Of course, when you experience damages that are covered by your insurance, you’ll have to file a claim. A good way to keep down the number of claims filed, though is to avoid filing small claims for things that are covered but that you can comfortably replace or repair yourself.

Quickest Claims Process

What Impacts Eligibility for Cheap Homeowners Insurance Premiums

Just because you choose one of the companies we’ve reviewed above that tend to provide affordable homeowners insurance doesn’t mean your premium is guaranteed to be low. In actuality, there are numerous factors that can affect your eligibility for a below-average premium. We’ll discuss some of the more significant factors below.

Location and Home Risk Level

As you can see in the charts above that look at average insurance premiums by state and major city, your location can play a massive role in what you pay for home insurance. While this is partially due to the cost of living affecting payouts, the variance in rates is mostly due to different risk factors based on where you live.

For example, homes located on the east coast are particularly prone to hurricanes, tropical storms, and cyclones, as are homes located around the Gulf of Mexico. Insurance providers will often charge more for coverage in these areas because damage is more likely to result from weather-related issues.

Similarly, flood insurance will be higher the closer your home is to a large body of water. FEMA’s flood zones designated as “A” will generally have the highest risk of flooding — around a 26% chance over a 30-year mortgage — while zone X won’t require flood coverage and will come with the lowest rates.

Claims Record

The affordable insurance rates we’ve provided above for our top company picks are only applicable for homeowners who haven’t had any homeowners insurance claims. You can expect your premiums to increase a bit if you have had large claims — often over $5,000 — or if you’ve filed multiple claims in the past.

Claims filed by the prior owner of your home can also have an impact on your eligibility for below-average insurance premiums.

Payment History

The risk of damage to your property isn’t the only risk your insurer will evaluate; in most states, providers also evaluate the likelihood that you’ll pay your premiums. If you’ve held homeowners insurance for quite some time and have a long history of on-time payments, or if you have a good or excellent credit score, you’ll be more likely to get access to cheap insurance coverage.

Coverage and Deductible

The estimates for affordable home insurance above are all based on a dwelling coverage amount of $325,000, which is around the average value of the structure for all properties in the U.S. They’re also based on a standard deductible of $1,000.

If you need more coverage for a more expensive home, you can expect your premium to increase about in proportion to your home value. Similarly, agreeing to higher deductibles means your provider assumes less risk, so your premiums are likely to be more affordable. Choosing a low deductible — around $500 is considered low — will make you less eligible for cheap coverage.

Compare the Cost of the Top Cheapest Home Insurance Companies

The chart below provides another quick look at the cost of homeowners insurance for our top picks for affordable coverage.

CompanyState FarmProgressiveNationwideLemonadeErie
Average Monthly Premium$109$100$104$116$109
Average Annual Premium$1,300$1,200$1,250$1,400$1,300
Savings vs. Average$250 in savings per year$350 in savings per year$300 in savings per year$150 in savings per year$250 in savings per year

We would also be remiss if we didn’t mention that it’s important to compare coverage included when considering your premium cost.

For example, Progressive has some of the cheapest homeowners insurance coverage in the country, but for $100 more per year — less than $9 more per month — you get additional coverage from State Farm. For many homeowners, the added coverage, including personal liability coverage, loss of use coverage, and guest-medical payments may prove to be more valuable to you than the $9 extra per month you’d pay to enjoy them.

How We Ranked the Cheapest Home Insurance Companies

We began our search for the most affordable coverage by looking at homeowners insurance quotes for coverage in multiple zip codes from the top-rated insurance providers in the country. We eliminated many of the smaller providers that only serve a single state or a few areas in the country, as these appeal to far fewer individuals than the big players, like Allstate and Progressive.

Next, we took a deep dive into the coverage provided by each of these insurance companies, including what comes with the standard plans and what add-on options are available for customization. We also looked at each company’s options for deductibles and coverage limits to determine how likely each was to appeal to a wide range of homeowners.

Then, we compared these companies based on pricing throughout the country, including high-risk areas and relatively low-risk areas. We took the average of the premium costs for each company and ranked them against the others based on the value provided for the cost.

Finally, we considered what special circumstances each company covered — like properties in gated communities or new construction homes — and looked at company reviews to see the overall customer service. We also considered each company’s ratings with the BBB, A.M. Best, J.D. Power, and other websites to get a sense of how likely customers are to be pleased with these companies.

We weighed all of the factors above to arrive at our own company ratings and rankings.

Final Verdict: Which Home Insurance Company is the Cheapest?

If you’re looking for the cheapest possible homeowners insurance that’s still worth buying, we recommend going with Progressive. This company has some of the lowest average home insurance premiums in the industry, and although customer satisfaction is a bit lower than some of our other rated companies, Progressive has proven to be the most affordable while still maintaining good value.

However, we still recommend State Farm over Progressive. State Farm serves the entire company, just like Progressive, but it has far better customer reviews and ratings. The coverage provided is also more inclusive, so although you pay an average of $9 more per month for State Farm’s policies, you get more value for the money. State Farm also provides more customization options to help keep costs down for only the coverage you need.

Frequently Asked Questions

How can I lower my home insurance cost?

There are a few things you can do to lower your homeowners insurance costs each year. First, you can do your best to remain claims-free. You will undoubtedly need to file a claim in the event of a natural disaster or other catastrophe, but you can reduce the number of claims you file by avoiding small claims for damages you can afford to fix yourself.

Second, you can stick with your company for a long period. Insurance companies love to see customer loyalty and may keep your premium low or offer discounts after a certain amount of time you spend insured by the company.

Finally, you can check to see if bundling multiple policies would behoove you. Most providers will provide a premium reduction if you agree to insure your home and car with them, and others might offer discounts for adding in other options, like life insurance, pet insurance, and more. Bundling isn’t always beneficial, but it very often is. Check with your insurer to see if it would bring your total insurance costs down.

What is the most basic home insurance coverage?

The most basic home insurance policy is called an HO-1 policy, also called “basic form coverage.” This includes your primary structure, attached garages, and the core parts of your home, like flooring, home systems, and appliances. These policies are considered outdated and aren’t offered as universally as other options.

An HO-2 policy — also called “broad form coverage” — cover everything in an HO-1 policy, plus damage from some accidental damage, damage from the weight of snow and ice on your roof, and falling objects, like tree limbs. For most homeowners, an HO-2 policy will be the most basic one available.

Is home insurance necessary?

Technically speaking, homeowners insurance isn’t required by law. Provided you own your home outright, you can opt not to have your property covered. However, insurance provides peace of mind and financial aid in the event of an emergency. This is why 93% of all U.S. homeowners hold insurance policies.

There is one caveat to homeowners insurance not being required, which is relevant if you finance your home. Since lenders want to ensure that the collateral they use for your mortgage — your home — is protected, nearly every mortgage lender will mandate complete coverage for your home with a replacement value matching or exceeding the value of the home when you purchase it.

What is the difference between ‘all risk’ and ‘named peril’ coverage?

An “all risk” policy, also known as an “open perils policy,” is one that covers everything in standard homeowners insurance, plus damages caused by issues that aren’t explicitly excluded in the contract.

Conversely, a “named peril” policy only covers damages caused by issues specifically mentioned in the contract.

For example, an all risk policy that doesn’t exclude damages from floods will cover water damage in the event of a flood. A named peril policy that only states coverage will be offered for fire and wind damage will not.

What should I choose as my home insurance deductible?

The answer to this question really depends on your financial situation, your personal risk tolerance, and how much you want to keep your annual premium to a minimum.

When you opt for higher deductibles, you’ll be agreeing to pay more for damages and issues in your home before your insurance policy kicks in. As such, you take on more risk yourself, but you take that risk away from your insurer. The result is usually a lower annual premium.

Higher deductibles might benefit you if you move into a newly constructed home in an area with a low risk of weather damage. However, you might still want the peace of mind of knowing you’ll only be on the hook for a few hundred dollars instead of a few thousand if something goes wrong.

If you know you don’t budget well, paying more for your premium could save you from repair or replacement bills you can’t pay in the case of an emergency. Alternatively, you might prefer to pay less in ongoing insurance costs and pay more only if something goes wrong.

Ultimately, the deductible you choose should be catered to your personal preference and ability to take on risk.

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