Homeowners insurance is averaging nearly $2,500 a year, but you can still save

The average cost of homeowners insurance in the U.S. is $2,424 per year for $300,000 in dwelling coverage, according to Bankrate data. Of course, that's just a nationwide average: In states like Nebraska and Louisiana, it's well over $6,000 a year.

Inflation, tariffs, government regulations and labor shortages have all contributed, experts say, but climate change has emerged as the chief culprit. 

"One of the big things we've seen in the last five, ten years is the growing frequency of weather events in parts of the country," David Seider, chief commercial officer for insurance marketplace The Zebra, told CNBC Select. "Hail, tornadoes, flooding — storm damage has become a pivotal piece of policy calculations."

Some states are pushing back: After State Farm announced in July 2025 that it would raise premiums in Illinois by an average of 27.2%, Gov. J.B. Pritzker called on lawmakers to beef up the Department of Insurance's ability to reject excessive rate hikes.

His message came two months after Louisiana Gov. Jeff Landry signed a bill extending Insurance Commissioner Tim Temple's regulatory authority. 

But saying no to rising premiums could turn into a dangerous game of chicken, Seider said, with homeowners ultimately losing out.

"If an insurer's rate increase is denied... they'll stop offering policies in that state," he added.

Farmers, Progressive and State Farm have all either stopped issuing or pulled back drastically on issuing new policies in Florida, while Allstate, Chubb, Nationwide and others have cut or curtailed coverage in California.

"They can't go back to the loss ratios they had in the pandemic," Seider said. "If they can't underwrite profitably, I don't think they'll write policies at all."

You can't stop hailstorms or wildfires, but you can save money on homeowners insurance.

1. Comparison shop

Insurance companies calculate premiums differently, so you may get wildly different quotes depending on which carrier you check with. Most insurers offer online quotes, while marketplaces like Insurify, The Zebra and Policygenius let you compare prices side by side.

If you prefer the human touch, an independent insurance agent or broker may have access to rates that aren't published online. 

2. Ask about discounts

Comparison shopping is always a good idea, Seider said, but find out what discounts your current carrier has first.

"There are so many discounts," he added. "You can get a loyalty discount, a discount for paying in full, for not smoking or for living in a gated community."   

Bundling, or buying multiple lines of insurance from the same carrier, is the surest way to save. Amica offers discounts of up to 30% for purchasing both auto and home insurance, the largest bundling discount we've found.

3. Make your home safer

A burglar alarm can save you money on premiums, but an actively monitored security system will lower your rates even more. The same is true for smoke detectors and sprinkler systems.

Wind-resistant features like storm shutters, roof clips and impact-resistant glass can also get you a discount, especially if you live in a hurricane-prone region.

4. Raise your deductible

Your deductible is the amount you have to pay out of pocket for repairs before your insurance will pay on a claim. Raising your property insurance deductible from $500 to $1,000 can save you as much as 25% a year, according to the Insurance Information Institute.

Only increase your deductible if you can comfortably afford the difference when filing a claim.

5. Improve your credit score

In most states, carriers can consider your credit history when calculating your insurance premiums. The average homeowners premium for someone with excellent credit is $2,260, according to The Zebra, while someone with poor credit will average $7,260 (That's a difference of 221%).

By raising your credit score by one category, you can save an average of 32% on your premiums.  

You can be rejected for homeowners insurance for any number of reasons, including a bad credit score, your previous claims history or the crime rate in your area.

If your region is prone to natural disasters, ask your neighbors which carrier they use. If you're a new homeowner, your real estate agent should be able to tell you who previously insured the property.

More than 30 states offer subsidized Fair Access to Insurance Requirements (FAIR) plans, which enable high-risk homeowners to get coverage —although with considerably higher premiums. 

If you've received several rejections, you may be approved by an excess and surplus line company. Their policies usually come with more exclusions and higher deductibles, but they cover high-risk properties.

"The excess and surplus market is filling up," Seider said. "These folks specialize in markets and policyholders that others won't touch."

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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