Understanding Home Insurance Costs
The cost of home insurance is on the rise, and it’s essential to understand the factors that contribute to this increase. According to recent data, the national average cost of home insurance has reached $2,470. This increase is attributed to various factors, including extreme weather conditions, location, and credit scores.
True Cost of Home Insurance in 2025 by State
Bankrate recently compiled the average home insurance cost for each state, providing valuable insights into the varying costs across the country. The data reveals that the average cost of home insurance has increased by 9% since 2023. California saw the fastest increase between 2023 and 2025, but it doesn’t rank as the state with the highest average cost.
FILE – Houses and vehicles are seen in the flooded Lower Ninth Ward Sept. 24, 2005 in New Orleans, Louisiana. (Photo by Ethan Miller/Getty Images)
Top States with the Highest Average Home Insurance Costs
The state with the highest average cost for home insurance is Louisiana, with an average cost of $6,274. This is largely due to the extreme weather conditions that the state experiences, including hurricanes and flooding. Nebraska ranks second, with an average cost of $6,425, followed by Florida at $5,735. Both Nebraska and Florida are prone to severe weather conditions, including tornadoes, hail, and hurricanes, which contribute to the higher insurance costs.
“Louisiana and Florida are frequently struck by hurricanes, while Nebraska homes are at risk for tornado and hail damage. Extreme weather means more home insurance claims and higher premiums,” according to Bankrate.
Factors Considered in Bankrate’s Data
Bankrate’s data took into account various factors, including married homeowners with homes built in 2015, 2016, and 2017, good credit, and specific coverage levels. The coverage levels included:
- Coverage A, Dwelling: $300,000
- Coverage B, Other Structures: $30,000
- Coverage C, Personal Property: $150,000
- Coverage D, Loss of Use: $60,000
- Coverage E, Liability: $500,000
- Coverage F, Medical Payments: $1,000
Source of the Data
The Source: Information for this article was taken from data compiled by Bankrate between July 2023, July 2024, and July 2025. Rates for all ZIP codes and insurance carriers in all 50 states and Washington, D.C. were also included.
Conclusion
Understanding the factors that contribute to the cost of home insurance is essential for homeowners. By recognizing the impact of extreme weather conditions, location, and credit scores, homeowners can make informed decisions about their insurance coverage. It’s crucial to review and compare insurance rates regularly to ensure that you’re getting the best coverage for your needs and budget.
Frequently Asked Questions
Q: What is the national average cost of home insurance?
A: The national average cost of home insurance is $2,470.
Q: Which state has the highest average cost for home insurance?
A: Louisiana has the highest average cost for home insurance, with an average cost of $6,274.
Q: What factors contribute to the cost of home insurance?
A: Factors such as extreme weather conditions, location, credit scores, and coverage levels contribute to the cost of home insurance.
Q: How often should I review my home insurance coverage?
A: It’s recommended to review and compare insurance rates regularly to ensure that you’re getting the best coverage for your needs and budget.
Q: What is the fastest increasing state for home insurance costs?
A: California saw the fastest increase in home insurance costs between 2023 and 2025.
