Calculate your home insurance costs
For an accurate estimate of how much coverage you need and how much it will cost, use our free homeowners insurance cost calculator.
Is there a formula to calculate homeowners insurance?
According to the Federal Reserve, the insurance premium for a home is roughly 0.35% of its market value. [1] Using this method, a home with a market value of $400,000 would have a home insurance premium of around $1,400.
Another quick way to estimate your home insurance coverage is by multiplying the square footage of your home by the average building cost per-square-foot in your area according to local contractors.
However, keep in mind that these methods will give you very rough estimates and we don't recommend using them when estimating your homeownership expenses.
Why you can trust Policygenius
As an online insurance marketplace, policycentral works closely with homeowners all over the U.S. to help them find a home insurance policy that suits their needs — without bias or favor toward any one company. Our educational guides are written and fact-checked by licensed home insurance experts and reviewed by our Financial Review Council to ensure autonomy, expertise, and accuracy. Read our methodology below.
How to calculate home insurance
To calculate homeowners insurance, you need to consider two factors that greatly influence your premium: where you live and your susceptibility to extreme weather damage or other risks. Your premium is also based on factors that are specific to you and your property, such as your home’s estimated rebuild amount, its age and characteristics, your claims history and credit score, and how high of a policy deductible you choose.
1. Estimate your coverage amounts
Home insurance policies include coverages that protect everything from your personal belongings to liability, but dwelling coverage has by far the biggest impact on your insurance premiums. The more dwelling coverage you have, the higher your rates will be.
Other than dwelling, your insurance coverages have a mostly minimal impact on your insurance premiums, especially if you opt for the default coverage amounts. But it’s important to understand how each coverage is calculated and opt for higher limits if your situation calls for it.
Coverage | What it covers | Standard coverage limits | How to calculate coverage needs |
|---|---|---|---|
Your home if it’s damaged or destroyed by a covered peril, such as a fire or windstorm | Based on your home's replacement cost | Determine how much it would cost to rebuild your home from the ground up at today’s prices using our replacement cost estimator | |
Buildings on your property that aren’t directly attached to your home, such as garages, sheds, fences, and carports | Usually set at 10% of your dwelling coverage limit by default | Determine how much it would cost to rebuild any outdoor structures on your property | |
Everything inside your home, such as furniture, clothing, kitchen appliances, and electronics | Usually set at 50% of your dwelling coverage limit by default | Take an inventory of your personal belongings and decide if you want them replaced at today’s prices (replacement cost value = more expensive) or with depreciation taken into account (actual cash value = cheaper) | |
Hotel stays, dining out, dry cleaning, and other additional living expenses when you’re unable to stay at your house after a covered loss | Usually set at 20% of your dwelling coverage limit by default | Consider the risk of your home being so badly damaged in a natural disaster that you need to move elsewhere while it’s being repaired, and set higher limits for the greater likelihood of this happening | |
Legal and medical expenses if you’re found legally responsible for injuring someone or damaging their property | Usually available from $100,000 to $1 million, though supplemental umbrella insurance policies can offer higher coverage limits if needed | Determine the value of your assets, such as your house, car, personal possessions, 401k, stocks, retirement accounts, and liquid assets | |
Medical expenses if someone’s injured at your home, regardless of who’s at fault | Usually set at $1,000 to $5,000 | $5,000 is typically the highest amount of coverage offered for this |
Learn more >> How much home insurance do I need?
2. Consider your home’s location & other characteristics
After dwelling coverage limits, your home insurance rates are then primarily based on your home’s location and risk, such as its proximity to areas that see frequent wildfires, tornados, hurricanes, snow storms, or other natural disasters, as well as characteristics of it.
You’ll likely see higher rates for any of the following since you’re at greater risk of filling a claim:
Home in an area at high risk of natural disasters
Older home with an outdated roof, electrical, or plumbing system
Home constructed with obsolete materials
Home with a pool, trampoline, or even dogs
3. Check your credit score and claims history
Insurance companies consider homeowners with lower credit scores or multiple past claims to be riskier to insure compared to homeowners with good credit and a clean claims history. Even having one claim in the past few years or a credit score below 670 could mean higher home insurance premiums, so you’ll want to consider both of these factors when estimating your home insurance rates.
4. Choose a policy deductible
Your home insurance deductible is the amount you’re responsible for paying out of pocket on each claim before insurance kicks in to cover the remainder of the loss amount. A typical policy deductible comes in a flat fee that ranges anywhere from $500 to $2,000, but some companies offer deductible levels as high as $5,000.
Picking a higher deductible can lower your premiums, but it also increases how much you need to pay when you file a claim.
5. Get quotes from a home insurance marketplace
Get quotes through our online home insurance marketplace — all for free and with minimal information required. All that's required is a few brief details about you and your home, and we'll send you a side-by-side comparison of rate estimates from several insurance providers.
Estimate home insurance rates by coverage level
On average, home insurance premiums differ substantially based on how much dwelling coverage is in your policy. Here’s the average annual home insurance rate for five different levels of dwelling coverage.
Dwelling coverage | Average annual cost |
|---|---|
$100,000 | $946 |
$200,000 | $1,442 |
$300,000 | $1,754 |
$400,000 | $2,481 |
$500,000 | $3,066 |
Learn more >> Average homeowners insurance cost in 2024
Home insurance rate estimates by state
After all of this, you're probably wondering, How much should home insurance cost? Along with the price to rebuild your home, your home’s location plays a significant role in your home insurance premium. Here’s the average yearly home insurance rate in each state.
State | Average monthly cost | Average annual cost |
|---|---|---|
$165 | $1,982 | |
$117 | $1,398 | |
$147 | $1,762 | |
$244 | $2,924 | |
$120 | $1,436 | |
$206 | $2,472 | |
$113 | $1,359 | |
$77 | $928 | |
$96 | $1,154 | |
$204 | $2,442 | |
$163 | $1,956 | |
$41 | $486 | |
$113 | $1,352 | |
$148 | $1,775 | |
$143 | $1,719 | |
$143 | $1,714 | |
$258 | $3,094 | |
$219 | $2,622 | |
$209 | $2,507 | |
$90 | $1,076 | |
$131 | $1,575 | |
$107 | $1,285 | |
$129 | $1,550 | |
$161 | $1,937 | |
$221 | $2,655 | |
$219 | $2,627 | |
$184 | $2,213 | |
$312 | $3,741 | |
$101 | $1,209 | |
$81 | $967 | |
$75 | $904 | |
$141 | $1,686 | |
$95 | $1,139 | |
$132 | $1,580 | |
$158 | $1,890 | |
$108 | $1,297 | |
$353 | $4,230 | |
$75 | $905 | |
$97 | $1,162 | |
$113 | $1,358 | |
$141 | $1,696 | |
$202 | $2,418 | |
$187 | $2,242 | |
$252 | $3,027 | |
$77 | $923 | |
$75 | $900 | |
$111 | $1,329 | |
$101 | $1,216 | |
$122 | $1,464 | |
$98 | $1,177 | |
$133 | $1,599 |
Methodology
To find the average annual premium by coverage level and for each state, policycentral analyzed home insurance rates provided by Quadrant Information Services for over 30,000 ZIP codes in all 50 states plus Washington, D.C. Our sample quotes for each company and ZIP code were for a 40 year-old homeowner with no claims history, good credit, a $1,000 deductible, and the following coverage limits:
Dwelling: $300,000
Other structures: $30,000
Personal property: $150,000
Loss of use: $60,000
Liability: $300,000
Medical: $1,000
Given the fact that both population size and premium amounts can vary drastically depending on where you live, we assigned weights to each ZIP code based on its population of homeowners, according to U.S. Census Bureau data; and to companies based on their market share presence in each state, according to Quadrant Information Services. Once weights were assigned to each ZIP code and company, we were able to calculate our national average home insurance rate.
