Next to auto and life insurance, home insurance is one of the most sought-after insurance policies — and for good reason. Home insurance financially protects your home and assets in the instance of damage or loss, which happens more often than you think. About 1 in 20 insured homeowners file a claim each year, whether it’s related to fire and lightning, water damage or theft.
Purchasing home insurance can ensure that your most expensive asset is covered, even if it’s not legally required. By understanding home insurance statistics, you can learn how valuable coverage can be for any homeowner.
Key Takeaways:
Insurance is an ideal way to protect your most expensive investment: Your home. Review the statistics below to see how it’s helped homeowners across the U.S.
By the end of 2021, homeownership rates in the U.S. hit 65.5%.
In the U.S., 93% of homeowners have some form of home insurance.
Claims are made in 1 in 20 insured homes annually, while 1 in 40 homes make a claim related to wind and hail.
Tennessee was the most expensive state for homeowners insurance; Delaware was the least costly, on average.
Most Purchased Homeowner Insurance Coverages
As a homeowner, you can select from several types of insurance policies, also known as "forms." There are eight primary policy types; what you need will depend on your home's structure and the level of coverage you want.
The HO-3 home insurance policy, which offers a broad range of coverage, is the most common form of home insurance. It covers almost any peril, save for any losses specifically stated as excluded from coverage by the insurer. Conversely, HO-1 has the most basic coverage, only offering protection against 11 perils. There is also an HO-4 policy, or renters insurance, along with an HO-6 home insurance policy or condo/co-op insurance.
% of Homeowners With Each Coverage, 2019
Type of Policy | Coverage Percentage |
|---|---|
HO-1 | 1.62% |
HO-2 | 6.12% |
HO-3 | 77.68% |
HO-5 | 14.09% |
HO-8 | 0.49% |
% of Tenants or Condominium Owners With Each Coverage, 2019
Type of Policy | Coverage Percentage |
|---|---|
HO-4 | 73.86% |
HO-6 | 26.14% |
Note that an HO-4 policy is designed for renters, while an HO-6 policy is for condos and co-ops. These types of policies are typically lumped together, with 77.86% opting for an HO-4 policy over an HO-6 policy. The rest (HO-1, HO-2, HO-3, HO-5 and HO-8) are meant for single-family homes and other housing units.
Homeowner Insurance Claims Statistics: Frequency and Severity
Home insurance claims statistics provide insight into the frequency and severity of claims in different parts of the country. While frequency entails how often it happens, the severity outlines the monetary losses. Understanding both can underscore the importance of having a policy.
For example, 5.1% or 1 in 20 insured homes make a claim each year — for varying reasons. 97.2% of claims are due to property damage, such as wind and hail, theft and more, while 2.8% are due to liability, such as medical payments and property damage. Learn more about claims statistics in the table below.
Reasons, Frequency & Severity of Home Insurance Claims 2015–2019
Causes of Loss | Claim Frequency* |
|---|---|
Property Damage | 5.57 |
Fire and lightning | 0.27 |
Water damage and freezing | 1.9 |
Wind and hail | 2.45 |
Theft | 0.23 |
All other | 0.71 |
Liability | 0.10 |
Bodily injury and property damage | 0.07 |
Medical payments and other | 0.03 |
Credit Card and Other | Less than 0.1 |
Total Average | 5.67 |
Source: Insurance Information Institute
*Claims per 100 house years.
The table shows that between 2015 and 2019, the majority of claims were made because of bodily injury and property damage.
Most Common Causes of Homeowner Insurance Claims
Throughout the years, rates of common claim reasons have differed; knowing the most common reasons can help you prepare for and adjust your policy limits accordingly. For instance, in 2017, 41% of claims were due to wind and hail, up by 18.5% from 2015. On the other hand, claims regarding bodily injury, which was 3.7% in 2015, went down slowly over the years and stood at 2.4% in 2019.
Discover some of the most common claim causes over a five-year period in the table below.
Reasons Behind Home Insurance Claims By Year
Causes of Loss | 2015 | 2016 | 2017 | 2018 | 2019 |
|---|---|---|---|---|---|
Wind and hail | 22.5% | 33.4% | 41% | 36.3% | 34.3% |
Water | 42.4% | 29% | 18.7% | 23.7% | 29.4% |
Fire and | 23.7% | 26.2% | 32.2% | 30.2% | 25.1% |
Theft | 1.9% | 1.9% | 1.1% | 1% | 1% |
All other | 5.6% | 5.7% | 4.5% | 6.5% | 7.4% |
Bodily injury | 3.7% | 3.5% | 2.2% | 2.1% | 2.4% |
Medical | 0.2% | 0.2% | 0.2% | 0.2% | 0.4% |
Credit card | Less than | Less than | Less than | Less than | Less than |
Total | 100% | 100% | 100% | 100% | 100% |
Source: Insurance Information Institute
Most Expensive Homeowner Insurance Claims
Not all home insurance claims are expensive: Some are more severe and costly than others. For example, property damage claims cost more than liability claims, and specific occurrences damage property more often than others. The table below showcases which claims cost insurers the most.
Most Expensive Home Insurance Claims Causes, 2015–2019
Causes of Loss | Claim Costs |
|---|---|
Fire and lightning | $78,838 |
Bodily injury and property damage | $29,752 |
Water damage and freezing | $11,098 |
Wind and hail | $10,801 |
All other property damage | $6,406 |
Medical payments and other | $5,802 |
Theft | $4,328 |
Credit card and other | $672 |
Source: Insurance Information Institute
Generally, property damage losses cost more than all liability claims combined, with fire and lightning costing the most. This illustrates the importance of getting ample dwelling coverage in your insurance policy.
However, in terms of liability claims, bodily injury and property damage cost the highest.
Average Cost of Homeowner Insurance Ranked by State
Thanks to numerous external factors, the average cost of home insurance varies by state. This can include the number of thefts in your neighborhood, the likelihood of floods or earthquakes and more. Case in point, the average cost of home insurance in Massachusetts for $500,000 in dwelling coverage is $2,864 per year, while in Hawaii, it costs an average of $764 for the same coverage. Discover your state’s average homeowners insurance costs in the map below.
Top 5 Most Expensive States for Homeowner Insurance Premiums
Certain states have more expensive home insurance rates than others, as location is a key factor in determining premiums. This includes how old the area is, how close your home is to other buildings, what type of fire services are nearby, crime rates, government regulations and more. The higher the perceived claim risk is in your area, the higher your premiums will be.
Below are the top five states with the most expensive home insurance premiums.
Tennesse
The average cost of home insurance in Tennesse is the highest across the country, averaging $3,466 per year. This is 65% higher than the national average, which may be due to the hazards that Tennesse is exposed to, such as drought, earthquakes, tornadoes, severe weather and more.
Texas
Home insurance in Texas costs an average of $3,390 per year and is 61% more expensive than the national average. Similar to Tennessee, this may be because Texas experiences the highest frequency and severity of natural disasters.
South Carolina
The average cost of home insurance in South Carolina is $3,377 per year, which is only $13 less than the average cost for Texas.
Colorado
It costs an average of $3,156 per year to insure a home in Colorado, which may be due to the risk of severe weather, such as snow and hail storms.
Nebraska
Nebraska home insurance costs an average of $2,972 per year. This is 41% higher than the state average and ranks it as the fifth most expensive state to insure a home.
Top 5 Least Expensive States for Homeowner Insurance Premiums
In some states, home insurance is more affordable. This is because the likelihood of filing a claim in that area is lower. For instance, there may be a lower crime rate or risk of natural disasters compared to other areas.
The states with the most affordable home insurance premiums are detailed below.
Delaware
Homeowners insurance in Delaware costs an average of $717 per year, which is the lowest among all states.
Hawaii
The average cost of home insurance in Hawaii is $764 per year, 64% less than the national average.
Oregon
Homeowners insurance in Oregon costs an average of $811 per year, which is $2,655 less than the cost of insuring a home in Tennessee, the most expensive state.
West Virginia
Home insurance in West Virginia costs homeowners an average of $843 per year. This is 60% less than the national average and 75% less than the cost of the most expensive state to insure a home (Tennessee).
New Hampshire
Home insurance in New Hampshire costs an average of $898, making it the fifth least expensive state for home insurance.
Factors Affecting Your Homeowner Insurance Costs
When determining pricing, some factors matter more than others, such as the age of the home or your location. How these factors are weighted, however, can vary from insurer to insurer, which is why it’s always important to compare home insurance quotes from several providers.
A policy's price is determined by several factors, including:
1
Coverage Type
It's more expensive to replace the dwelling and contents than actual cash value, but it's worth it to not have to pay for depreciated value in the event of a loss.
2
Deductible
Higher deductibles mean lower premiums but higher out-of-pocket expenses if you file a claim.
3
Coverage Limits
Your dwelling and personal property coverage limits can significantly affect your insurance premiums. The higher it costs to rebuild your home, the more coverage you need.
4
Age of Home
Generally, the older the house, the more likely you'll make a claim, and the more expensive the payout will be to repair or replace it. This often leads to higher premiums, regardless of your dwelling coverage limits.
5
Home Location
Location is, as demonstrated, a key factor in determining premiums. In an area with a dense population and more weather-related events, premiums are more likely to be more expensive.
Homeowner Insurance Companies Statistics Ranked by Market Share
The market share of an insurer is a crucial factor to consider when selecting the best home insurance provider. Larger companies tend to have better benefits and convenience, while smaller companies may have lower premiums. Reviewing their financial health can also grant you insight into how reliable the company is and how well they can support your claim. Learn more about home insurance companies by examining their market share and other statistics in the table below.
Home Insurance Companies By Market Share 2019
Company | Direct Premiums Earned | DL/EP Ratio | Market Share (%) | Cumulative Market Share (%) |
|---|---|---|---|---|
State Farm | $65,180,403,219 | 58.6 | 18.0 | 18.0 |
Allstate | $8,492,576,270 | 52.3 | 8.4 | 26.4 |
United Service | $6,491,910,720 | 63.5 | 6.6 | 32.9 |
Liberty Mutual | $6,691,343,537 | 51.0 | 6.5 | 39.4 |
Farmers | $5,869,634,053 | 38.7 | 5.7 | 45.1 |
Travelers | $3,972,510,933 | 55.8 | 4.1 | 49.2 |
American Family | $3,863,377,151 | 61.8 | 3.9 | 53.1 |
Nationwide | $3,199,085,340 | 57.5 | 3.1 | 56.2 |
Chubb | $2,894,510,591 | 62.5 | 2.9 | 59.1 |
Erie | $1,713,815,363 | 68.5 | 1.7 | 60.8 |
Auto Owners | $1,641,196,431 | 56.5 | 1.6 | 62.4 |
Progressive | $1,522,992,880 | 67.0 | 1.6 | 64.0 |
Universal | $1,158,240,071 | 82.3 | 1.2 | 65.2 |
Metropolitan | $1,107,973,270 | 52.3 | 1.1 | 66.2 |
American | $1,125,466,818 | 86.3 | 1.1 | 67.3 |
The Hartford | $969,833,077 | 44.0 | 0.9 | 68.2 |
CSAA | $937,156,383 | 25.1 | 0.9 | 69.1 |
Amica Mutual | $927,707,747 | 52.7 | 0.9 | 70.0 |
United Insurance | $829,836,659 | 67.1 | 0.8 | 70.9 |
Auto Club | $838,295,829 | 52.4 | 0.8 | 71.7 |
National General | $829,650,549 | 48.4 | 0.8 | 72.5 |
Heritage | $789,064,912 | 63.6 | 0.8 | 73.2 |
Country Insurance | $716,606,762 | 65.2 | 0.7 | 74.0 |
Assurant | $694,262,848 | 38.6 | 0.7 | 74.6 |
Automobile Club | $693,617,904 | 65.6 | 0.7 | 75.3 |
Direct premiums earned stand for the total amount policyholders paid for home insurance, while direct loss to direct premium ratio identifies the proportion of direct premiums used to pay for claims. The higher the direct premium earned, the more policies that provider has, which can indicate their reliability and popularity. A low ratio also means that fewer claims are being made.
Given the data above, State Farm is the largest home insurer by market share in the U.S., holding 17.97% of the market and having earned premiums upwards of $18 billion.
Homeowner Insurance Statistics FAQs
To better understand homeowners insurance statistics and what a policy entails, review the frequently asked questions (FAQs) below.
Will homeowners insurance cover my home business?
Some providers offer additional coverage to your home insurance, allowing you to cover your business property. However, not all insurers do this. For instance, Universal North America offers Incidental Occupancy, which can help you pay for business activities conducted on your premises.
How many Americans have no homeowners insurance?
Seven percent of U.S. homeowners have no home insurance.
What is the most common cause of homeowners insurance claims?
Property damage is the most common reason why homeowners make a claim. In particular, wind and hail stand as the most frequent reason as of 2019.
What is the most popular home insurance policy type?
HO-3 policies are the most common amongst policyholders, as it provides coverage for almost all types of perils except for those specifically stated on the insurance agreement.
What state has the most expensive home insurance premium average?
Tennessee has the most expensive home insurance rates on average, costing $3,466 per year.
Expert Insights
To help you deepen your understanding of homeowner insurance, MoneyGeek has compiled insights from several industry professionals.
- What statistics should policyholders look at when looking for a policy?
- Should policyholders consider the market share of a company when selecting home insurance? Why or why not?
Stacey A. GiuliantiCo-Founder & Chief Legal Officer at Florida Peninsula Insurance Company
Scott W. JohnsonFounder & Manager at Marindependent Insurance Services
Related Content
Understanding home insurance, how it works and why you need it is more than just the statistics. Learn more about home insurance in the resources below.
- What Is Dwelling Coverage and How Much Do You Need to Protect Your Home?: As part of homeowners insurance, dwelling coverage protects the home's structure in case of damage caused by a covered peril. Find out what dwelling coverage is and how to find the amount of coverage that's right for you.
- How Much Home Insurance Coverage Do You Need to Protect Your Home?: Having home insurance covers you in many ways, but it’s especially important to find a policy that covers the cost of rebuilding your home and insures your possessions so that they are fully protected. Find out how much coverage is best for you and your home.
- HO-3 Home Insurance Policy: What You Need to Know: HO-3 home insurance is designed to protect your home and valuables in case of a disaster. Learn more about it and whether this type of home insurance is a good fit for your needs.
- How to Buy Homeowners Insurance: Everything You Need to Know: A homeowner's insurance policy is a necessity, not a luxury. When buying homeowners insurance, it’s important to understand the basics to ensure you get the coverage you need.
- A Guide for How to Switch Home Insurance Companies: Homeowners often wait for their policies to expire before switching home insurance providers. However, you can switch companies anytime. Learn how and when to navigate the process successfully.
About Nathan Paulus
Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.
Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.
sources
- Insurance Information Institute. "Facts + Statistics: Homeowners and renters insurance." Accessed April 21, 2022.
- Insurance Information Institute. "Insured homes by state." Accessed May 12, 2022.
- National Aeronautics and Space Administration. "Natural and Manmade Hazards in the State of Texas." Accessed April 21, 2022.
- National Association of Insurance Commissioners. "2019 Top 25 Groups and Companies by Countrywide Premium." Accessed May 12, 2022.
- National Association of Insurance Commissioners. "Dwelling, Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owner’s Insurance Report: Data for 2019." Accessed May 12, 2022.
- Tennessee Department of Military. "Tennessee Threats." Accessed April 21, 2022.
- U.S. Census Bureau. "Quarterly Residential Vacancies and Homeownership, First Quarter 2022." Accessed May 12, 2022.
