The average annual homeowners insurance premium is around $1,200, but costs vary widely from state to state and house to house.

Selecting a homeowners insurance policy is one of the more important purchasing decisions you’ll make after finding a new home. Homeowners insurance protects your assets — the home itself, personal property within the home, and legal and medical bills if someone is injured on your property. It's also required by most mortgage companies before they’ll lend to you.

According to the National Association of Insurance Commissioners, the average annual homeowners insurance premium is $1,211. Homeowners insurance costs differ from state to state for a number of reasons. If a state has a lot of major cities and more densely populated areas, it’s more likely to have higher premiums, as home values are generally higher. States in areas with a higher incidence of natural disasters also generally have higher premiums than states that don’t match that criteria. Homeowners insurance premiums are also dependent on the age and rebuild value of your home and the insured limits in your policy.

Extreme weather is a common theme in states with high homeowners insurance premiums. Louisiana, Texas, and Florida are coastal states and are more susceptible to strong storms, and Oklahoma and Kansas are right in the middle of Tornado Alley.

1. Louisiana: $1,967
2. Texas: $1,937
3. Florida: $1,918
4. Oklahoma: $1,875
5. Kansas: $1,548

Lowest Average Premium by State

On the flip side, you can get a bargain deal on homeowners insurance if you live in a state that experiences milder weather.

While we don’t advise moving somewhere strictly based on how high homeowners insurance premiums run, it’s helpful to understand why policies are cheaper in certain states and more expensive in others. As you can see, the following states aren’t likely to experience tropical storms and aren’t as prone to catastrophic tornadoes or other disasters.

1. Oregon: $659
2. Utah: $664
3. Idaho: $703
4. Nevada: $742
5. Wisconsin: $762

Average homeowners insurance rates by company

Some insurance companies simply charge less for homeowners insurance than other companies. If you insure your home with a company intended for high-value homes owned by high-net-worth homeowners — like AIG or Chubb — you’ll pay more for coverage simply because the insurance products and customer service are more comprehensive and personalized than with a standard carrier like Travelers or Stillwater.

Certain insurance companies also have a different risk tolerance than others, and that can mean lower rates. For example, if they don’t insure homes with prior claims or homes at high risk of being damaged by a natural disaster, rates might be lower across the board.

What determines the cost of homeowners insurance?

Similar to life insurance underwriting , your homeowners insurance company will examine potential risks when determining your rates. Some of these risks you have control over, and some are simply beyond your control.

Circumstantial homeowners insurance cost factors

• Location – Location is one of the biggest homeowners insurance premium cost factors. Weather, population density, proximity to fire-prone forested areas or car accident-prone intersections and roads, proximity to a fire station, and insurance claim history (if you’ve filed past claims or live in an area with a high number of insurance claims, you’ll have higher premiums) are all taken into account when determining rates.
• Credit history – Most states allow homeowners insurance companies to check an individual’s credit history to determine their premium.
• Age of your home – That Victorian house you just bought in a historic neighborhood may be charming, but chances are it has older wiring and plumbing, meaning your rates will be higher due to the heightened risk of fire and plumbing hazards. Homes with aluminum wiring are typically excluded from dwelling coverage unless proper safety modifications are made by a licensed electrician. Companies will also suggest a complete copper rewiring to minimize risk.