How much does homeowners insurance cost?

National average: $1,500-$2,500/year ($125-$210/month). By home value: $200,000 home: $1,000-$2,000/year. $300,000 home: $1,200-$2,500/year. $500,000 home: $2,000-$4,000/year. Varies widely by state: low-risk states: $700-$1,200. High-risk states (FL, TX, LA, OK): $2,500-$5,000+. Biggest cost factors: location, home value, deductible, claims history, and roof age.

What does homeowners insurance cover?

Covered (standard HO-3 policy): fire and smoke damage. Wind and hail. Lightning. Theft and vandalism. Falling objects (trees). Weight of ice and snow. Water damage from plumbing (sudden, accidental). Liability (injuries on your property). Additional living expenses (if displaced). NOT covered: flood (need separate policy). Earthquake (need separate policy). Sewer backup (optional rider). Mold (limited). Normal wear and tear. Neglect. Intentional damage. War or nuclear hazard. Important: read your policy carefully. Understand what is and is not covered BEFORE you need to file a claim.

How much homeowners insurance do I need?

Dwelling coverage: enough to rebuild your home at current construction costs (not market value or purchase price). Get a replacement cost estimate from your insurer or a contractor. Personal property: 50-70% of dwelling is standard. Do a home inventory to check if it is enough. High-value items (jewelry, art, collectibles) may need scheduled riders. Liability: minimum $300,000 (standard). Consider $500,000+ or an umbrella policy ($1-$2 million for $150-$300/year). Flood: required if in a FEMA flood zone. Recommended even if not (25% of flood claims come from outside high-risk zones). Cost: $500-$3,000/year.

How do I lower my homeowners insurance?

Increase deductible: from $500 to $1,000 saves 10-25% (average $200-$400/year). From $1,000 to $2,500 saves another 10-20%. Bundle: combine with auto insurance for 5-25% discount. Improve home: new roof (10-20% discount). Security system (5-15%). Smoke and CO detectors. Deadbolts. Storm shutters (in hurricane-prone areas). Shop around: get 3-5 quotes every 2-3 years. Use an independent agent (shops multiple companies). Ask about discounts: claims-free (3-5 years), loyalty, group, military, senior, new home. Improve credit: higher credit scores get lower rates (in most states). Avoid small claims: claims history raises rates. Pay small repairs out of pocket. Save claims for major losses.

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Home Improvement

Homeowners Insurance Guide: Coverage, Cost & Tips

Lumberama Editorial Team, Home Insurance & Protection Specialists Nov 12, 2026 9 min read

Coverage Types

Dwelling coverage (Coverage A): Covers the structure of your home. Damage from fire, wind, hail, lightning, vandalism, and more. Should cover the full replacement cost (not market value).

Other structures (Coverage B): Detached garage, shed, fence, pool. Typically 10% of dwelling coverage.

Personal property (Coverage C): Your belongings (furniture, electronics, clothing). Typically 50-70% of dwelling coverage. Replacement cost vs. actual cash value (replacement cost is better).

Loss of use (Coverage D): Living expenses if your home is uninhabitable. Hotel, meals, temporary housing. Typically 20-30% of dwelling coverage.

Liability (Coverage E): Protects you if someone is injured on your property. Covers legal defense costs. Standard: $100,000-$300,000. Recommended: $300,000-$500,000 (consider an umbrella policy for more).

Medical payments (Coverage F): Covers minor injuries to guests (no-fault). Standard: $1,000-$5,000.

What is NOT covered (standard policy): Flood damage (need separate flood insurance). Earthquake damage (need separate earthquake insurance). Sewer backup (optional rider). Mold (limited or excluded). Normal wear and tear. Intentional damage.

Cost

National average: $1,500-$2,500/year ($125-$210/month).

By state (approximate annual average): Low: Hawaii, Vermont, Utah ($700-$1,200). Moderate: California, Washington, Virginia ($1,000-$1,800). High: Texas, Florida, Louisiana, Oklahoma ($2,500-$5,000+).

Cost factors: Location (weather risk, crime rate). Home value and replacement cost. Deductible ($500-$2,500 typical). Claims history. Age and condition of home. Roof age and material. Credit score (in most states). Distance from fire station. Construction type (frame vs. masonry).

How to save: Increase your deductible ($500 to $1,000 saves 10-25%). Bundle with auto insurance (5-25% discount). Install security system and smoke detectors. Improve your credit score. Ask about group discounts. Review annually and shop around. Ask about claims-free discounts. New roof discount (some insurers offer 10-20% for new roofs).