Homeowners Insurance Facts and Statistics 2023
Homeowners insurance helps protect your home in case something bad happens. Here are some important things to know as you look for insurance.
Getting a house is a big investment. With homeowners insurance, you can protect this item in case something bad happens. Home insurance includes the structure of your house as well as your belongings. It also covers your liability in case someone gets hurt on your land.[1]
In this guide, we’ll look at some important facts about homeowners insurance, talk about the most common insurance cases for homes, and learn about the most popular insurance companies for homeowners.
States with the most expensive home insurance
Home insurance rates tend to be higher in some states than in the rest of the country. For example, places like Florida and Alabama often have bad weather, which means that insurance companies get more claims. Because of this, homeowners in these places often pay more for their insurance.
The table below shows how home insurance costs are different in different states. For example, the average homeowner in Florida pays about 108% more for home insurance than the average homeowner in the rest of the country, who pays $1,319 per year.
Insurance plans for homeowners owned
The table below shows how many of each type of coverage were bought in 2020. About 55.5% of all homeowner insurance policies written in the U.S. are HO-3 policies, making them the most popular type. The next most popular are HO-4 policies, which make up 20.8% of all policies, and HO-5 policies, which make up 9.3% of all policies.
Insurance risks for homeowners
A danger is any thing that could hurt or destroy something. Fire, wind, theft, falling trees, and other things are all common dangers. Different home insurance plans cover different types of risks. For example, a comprehensive home insurance coverage covers all risks except those that are specifically left out.
Floods and earthquakes aren’t covered by most home insurance plans. If a homeowner wants to be covered, they need to buy separate flood insurance and earthquake insurance policies on top of their normal homeowners insurance policy. If you live in an area where natural disasters happen often, you should strongly think about getting flood or earthquake insurance.
Most claims were made by homes because of wind and hail. In 2020, these claims made up 46% of all claims for property loss. The next most common reason for a claim is water damage (20%), followed by fire and lightning (24%). Less than 1% of all insurance claims are because of theft.
Even though theft is rare, you should still make sure you have good personal property insurance to protect your furniture, phones, appliances, and other things. If you have expensive jewelry or art, you should also think about adding a rider or endorsement to your coverage.
Insurance claims from homeowners
A homeowner’s request for money after a protected loss is called a home insurance claim. For example, if a hurricane damages the structure of your home, you could make a claim to ask your insurance company to pay for the repairs.
Check how bad the damage is before you file a claim. If the cost of fixes is less than your deductible, you probably don’t need to call your insurance company. If you want to make a claim, you should tell your insurance company right away and then do the following:
Take shots and videos of any property that has been damaged to keep track of it.
Get your policy number, which you can find on the paperwork you signed when you first got the insurance or on your online account.
You can call, go online, or use a smartphone app to talk to the claims department of your insurance company. Explain what happened and give a full account of the damage.
After you make a claim, a home insurance agent will look at the damage and figure out how much it will cost to fix. The adjuster will also look closely at your coverage and use your deductible to figure out how much you owe. Then, your insurance company will get in touch with you to tell you what it found and talk about what to do next.
Items that people often claim to own
Some things you might be able to claim on your insurance are jewelry, electronics, and clothes. Homeowners should also try to protect their furniture, machines, and tools. Investing in a home security system and making your home harder to break into are both good ways to reduce the risk of theft. You may also be able to get a discount on your home insurance if you buy anti-theft gadgets.
A recent study by the Insurance Information Institute found that almost half of all homeowners keep a list of what they own. In the event of a loss, it can be much easier to file a claim if you have a thorough inventory.
Most expensive home insurance claims
By far the most expensive are fire and lighting claims, which cost an average of $77,340. The average cost of a claim for wind and hail damage is $11,695, and the average cost of a claim for water damage is $11,650. The average cost of a theft claim is $4,415, which is one of the lowest costs.
When someone gets hurt, a homeowner could also make a liability claim. Liability claims are made less often than claims for damage to property, but they are often very expensive. The average claim for physical injury liability is $30,324, while the average claim for medical payment is $7,147.
Costs of homeowner’s insurance
The average amount paid for home insurance is $2,724. Still, you could end up paying a lot more or a lot less based on a few key things, such as:
State: If you live in a state that gets a lot of bad weather, you may have to pay more. Insurance companies know that you are more likely to file a claim, so they charge you more to cover the risk.
ZIP code: Rates for home insurance can range from one state, city, or neighborhood to the next. Homeowners who live close to emergency services, like a fire station, are thought to have a lower chance of big losses and, on average, pay less for their insurance.
Condition of the home: A home that is old or in bad shape is more likely to be damaged. Homeowners can get discounts if they make fixes that make their homes less likely to get damaged.
Home value: Homes that cost more to fix cost more to cover, which makes sense. Insurance experts often say that you should buy insurance worth 80% of your home’s new cost. If your home is expensive to rebuild, you’ll have to buy more insurance.
Deductible: If your deductible is high, your monthly premiums will be cheap. The deductible is the amount you have to pay before your insurance kicks in. When you raise your deductible, you put more money at risk.
Prices change from insurance company to insurance company. One of the best ways to save money on your home insurance is to shop around and compare prices.
How the cost of homeowner’s insurance has changed over time
The chart below, from the Insurance Information Institute, shows how the average cost of home insurance has gone up regularly over the past ten years. In 2010, the average cost of a HO-3 insurance was $909 per year, which is $363 less than the average cost in 2019.
Over the past ten years, insurance prices have gone up because of many different things. As real estate prices and building costs went up, so did insurance costs. Also, the United States has had more severe weather in recent years, which has led to more claims and higher rates.
Rates for home insurance are also affected by the economy. When inflation and interest rates go up, it can affect the value of a home, which can change the cost of insurance. Regulations at the state and federal levels could also have an effect on the cost of renters insurance.