Where the highest home insurance rates by state are: #1 won't surprise you!

^{Updated May XX, 2024} 

There are a lot of things that can affect the fluctuation of home insurance rates per state. Some elements have a heavier impact than others. These factors are the key to identifying which states will have the highest home insurance rates. 

In addition, it would help to have some insight regarding the changes that occur with these rates. Understanding both the average home insurance premiums in the US and the average policy charges of the state where you reside is also vital. 

To let you know more about these parameters, Mortgage Professional has listed the top ten states with the most expensive home insurance rates. We will also discuss which factors set the pricing of these home insurance premiums. 

Top 10 states with the highest home insurance rates 

The average rate of home insurance premiums for these states has breached the national average cost by more than a hundred percent. At the top is the state of Florida, where homeowners pay a whopping $5,770 per year to insure their homes and properties according to the latest analysis by Bankrate.  

Below is a table that lists the average policy premiums in Florida, along with the nine other leading states, as well as the difference from the national average cost: 

Note: These rates are for a home or property with $300,000 worth of dwelling insurance 

1. Florida 

Florida has the highest home insurance rates across all states. This state not only sits in the first spot for being frequently visited by tornadoes but is also often battered by hurricanes and other natural disasters. As a result, home insurance premiums in Florida are skyrocketing. 

2. Louisiana 

Following closely in second place is Louisiana, where hurricanes are a major threat to every resident’s property, livelihood, and safety. The deadly Hurricane Katrina stunned the nation in 2005, when it wreaked havoc in New Orleans. Due to this, Louisiana's homeowners' insurance market is in shambles and policy costs keep rising. 

3. Nebraska 

Aside from the weather conditions, Nebraska’s home insurance rates are also at an all-time high due to increasing fees for roof replacement caused by hailstorms. This makes it land in the no. 3 spot of our list. Blizzards and drought also play a role in other house repairs, causing high insurance claims. 

4. Oklahoma 

Taking the fourth place is Oklahoma where drastic changes in the weather drive up not just the insurance premiums for houses but also car insurance costs. Oklahoma faces numerous natural calamities per year including hurricanes, windstorms, tornadoes, and hailstorms.  

5. Mississippi 

Hurricane-prone Mississippi is at the fifth spot of our list of highest home insurance rates. Its average insurance rate of $4,289 per year is nearly double the national average. Shifting climate causes property perils in this state. Plus, the temperature is humid, resulting in heavy downpours. In turn, Mississippi’s harsh weather conditions cause insurance rates to climb. 

6. Texas 

At no. 6 is Texas, where the temperature is relatively warm and humid Like Mississippi. Still, Texas experiences heavy rains in the spring and in the beginning of autumn. 

Below is a video on what Texan residents can do if weather damages their houses and property, as explained by a Texas Department of Insurance representative: 

In addition to its volatile weather changes, home insurance premiums in this state are also increasing due to crime rates and economic inflation. 

7. Kansas 

Kansas is in Tornado Alley, where the strongest tornadoes mostly appear. This means that Kansas is vulnerable to devastating tornadoes and other intense weather occurrences. The increased possibility of such unforeseen events results in astronomical home insurance premiums. 

8. Arkansas 

Just like the other states, Arkansas has a spike in home insurance fees because of the severe weather conditions and the high probability of natural catastrophes. 

9. Colorado 

Second to the last is the state of Colorado. Taking the emphasis off from shifting weather and natural catastrophes, Colorado’s insurance premiums are moving up at a climbing trajectory because of reinsurance issues and high prices of goods and services.  

10. Alabama 

Concluding the list of highest home insurance rates by state is Alabama, with an average insurance rate that’s 38% higher than the national average cost. Most residents living close to the Gulf Coast of Alabama pay higher insurance premiums than the rest of the state. Alabama is also prone to natural disasters like the other nine above.  

Which state has the lowest homeowner insurance? 

Vermont has the least cost for homeowner insurance in the US. The average annual premium in this area is around $799, a drop of 63 percent below the national average; and a gap of $1,352 to be exact.  

Property owners pay about $67 per month for their home insurance charges as opposed to Florida’s $481, over seven times the amount. 

Other less expensive states for home insurance  

Aside from Vermont, there are several states that have a big difference in the average cost of home insurance coverage compared to the ten states previously discussed. Based on Bankrate’s data, we have also provided some of them along with the relevant values for better comparison. These figures are for policies with a dwelling coverage of $300,000: 

Average home insurance rates in the US 

To have one’s house or property insured in the US, the average cost that they will have to pay is $2,151 per year for a dwelling insurance that has $300,000 policy. 

By comparing the national average with the average policy charges of any state, finance and real property professionals can determine the estimated amount that other residents pay in the location. Knowing these figures will also aid homeowners as well as homebuyers, should they wish to apply for property insurance. 

Factors behind the increase of policy premiums 

Prices of home insurance premiums fluctuate yearly. The factors that drive up these rates are, but not limited to, the following: 

• location of the house or property – whether it’s in an area or state with low crime rates 
• price of the house or property 
• distinct features of the house or property 
• homeowner's insurance claims history 
• frequency of natural disasters in the area such as hurricanes, wildfires, tornadoes, and floods 
• level of danger posed by these calamities 

How does climate change affect home insurance rates? 

Climate change has a direct impact on home insurance rates, and it is unsurprisingly devastating. The chances of these calamities will be more frequent: 

• stronger and deadlier hurricanes 
• destructive wildfires 
• extended periods of excessive heat 

To put it simply, climate change means that the odds of natural calamities will be higher. 

Many Americans view their homes as an irreplaceable investment, their most prized possession even. In connection with this, about 66 percent of US residents own the house they live in. This was during the first quarter of 2023, according to the data provided by Bankrate.  

The study saw a decline in homeownership in the preceding years and has predicted the same outlook this year. Sadly, some homebuyers do not factor in climate change when choosing a property to purchase. Yet house owners put great importance on the property they possess. 

Home insurance policies still appeal to many because they guarantee protection. If houses are damaged by a natural disaster, being insured safeguards the property and its owners financially. 

These calamities have been recurring nonstop due to climate change. Home insurance companies will have no choice but to demand higher premiums as a result. Climate change has increased the hazards associated with several property locations; these drive the increase in policy costs. The higher or lower the risk, the same goes for the premiums. 

Insurers can even refuse to issue a contract if the perils are too great. Some property insurance providers no longer accept new applications altogether. These companies say that some houses are just uninsurable. 

To say that the home insurance market and homeowners alike have sustained heavy losses due to climate change is an understatement. 

Curious to know more? Watch this video as to why Americans are suddenly losing their home insurance: 

Is paying high home insurance rates worth it? 

Home insurance is not a necessity but a choice for current and soon-to-be property owners, although there are mortgage providers that will require it. Overall, if the protection that home insurance guarantees is not appealing enough, they ought to consider peace of mind. That is worth every dollar.  

Are you a mortgage professional in one of the states with the highest home insurance rates? What advice do you share with clients on getting home insurance in these states? Let us know in the comments section.