USAA claims the crown for cheapest homeowners insurance at roughly $70 monthly for $200,000 dwelling coverage—but there’s a catch. Only military members and their families can join. For civilians, Auto-Owners ($1,374 annually) and Travelers ($1,490 annually) offer the lowest rates nationally. Progressive hovers around $1,705 per year. Of course, premiums vary wildly by state, coverage amount, and home construction type. Vermont residents pay just $816 yearly while Californians and Floridians get hammered with sky-high rates. The full picture reveals several cost-cutting strategies worth exploring.
Design Highlights
- USAA offers the lowest rates at $70 monthly for $200,000 coverage, though membership is military-restricted.
- Auto-Owners and Travelers provide competitive national averages at $1,374 and $1,490 annually for standard coverage.
- Vermont has the cheapest state premiums averaging $816 yearly, while Utah and Maine also offer low rates.
- Regional insurers often beat national companies on price due to localized market knowledge and lower overhead costs.
- Installing security systems and bundling policies can reduce premiums by up to 20% with most insurers.
Nobody likes throwing money at insurance premiums, but home insurance isn’t optional when there’s a mortgage involved. The good news? Some companies charge way less than others for the exact same coverage.
USAA consistently ranks as the absolute cheapest option, with rates around $70 per month for $200,000 in dwelling coverage. That’s roughly $840 a year. Compare that to the national average of $2,408 annually for $300,000 coverage, and the difference becomes obvious.
USAA’s $840 annual rate crushes the $2,408 national average, proving the right insurer makes a massive financial difference.
USAA isn’t available to everyone though. It’s restricted to military members, veterans, and their families. For everyone else, Auto-Owners and Travelers offer some of the lowest average annual premiums at approximately $1,374 and $1,490 respectively.
Progressive also provides competitive rates, averaging close to $1,705 annually for $200,000 dwelling coverage. Even better for new homes, where Progressive’s rates start as low as $59 per month.
Coverage level matters. A lot. For $200,000 dwelling coverage, USAA leads at $70 monthly, followed by Travelers at $124 and Progressive at $142. Bump that up to $500,000 coverage, and State Farm comes in around $258 per month, Progressive at $261, and Travelers at $264.
For high-value homes requiring $1 million in dwelling coverage, Nationwide offers the cheapest policies starting at about $168 monthly.
Geography plays a massive role in pricing. Vermont ranks as the cheapest state for homeowners insurance with average premiums at $816 per year, about $1,600 below the national average. Utah follows at $1,283 annually, then Maine at $1,218.
These states benefit from fewer natural disasters, lower property crime rates, and stable home repair costs. Meanwhile, California and Florida residents get hammered with some of the highest premiums thanks to wildfires and hurricanes. Premiums have risen sharply nationwide, with reports showing a 24% increase from 2021 to 2024 driven by inflation and severe weather.
Regional insurers often beat national companies on price. Vermont Mutual offers rates averaging $816 per year in its service area.
Auto-Owners dominates the Midwest with competitive pricing, while PEMCO serves the Pacific Northwest affordably. State Farm manages impressive rates in specific cities, like Charlotte at $473 annually.
Multiple factors determine final costs beyond just the company name. Location risks including natural disasters and crime rates heavily influence premiums.
The dwelling type matters too. Wood frame versus brick construction, coverage amounts, deductible choices, and available discounts for security systems or bundling policies all impact the bottom line. Installing a home security system can save up to 20% on premiums. Customer service effectiveness and the insurer’s financial stability should also factor into the decision. Shopping around isn’t just smart. It’s necessary.
Frequently Asked Questions
Does Bundling Home and Auto Insurance Always Result in Lower Premiums?
Not always. Bundling typically saves money—anywhere from $521 to $1,429 annually—but it’s not guaranteed to be the cheapest option.
Some insurers jack up base rates to offset bundling discounts.
Here’s the kicker: you might find cheaper coverage by splitting policies between different companies.
Bundling works best when both policies are competitive on their own.
Bottom line? Don’t assume bundling wins. Shop around first, compare the math, then decide.
How Often Should I Review My Homeowners Insurance Policy Coverage?
Most experts say homeowners should review their policy at least once a year—typically at renewal time when fresh documents arrive.
But that’s just the baseline. Major life events like marriage, divorce, or buying expensive stuff should trigger an immediate review.
Home renovations? Check the policy.
Neighborhood gets hit by a natural disaster? Time to look again.
Local crime spikes? Same deal.
Bottom line: annual reviews are standard, but life changes demand attention whenever they happen.
Can My Credit Score Affect My Homeowners Insurance Rates?
Yes, credit scores profoundly impact homeowners insurance rates in most states. Homeowners with low credit scores pay nearly $2,000 more annually than those with high scores.
In some states like Oklahoma and Louisiana, that gap exceeds $3,000. The kicker? Credit score often affects premiums more than living in a disaster-prone area.
Only California, Maryland, and Massachusetts ban this practice. Insurers claim it correlates with claim frequency, but critics call it unfair and discriminatory.
What Discounts Are Available to Reduce Homeowners Insurance Costs?
Homeowners can slash premiums through bundling discounts—combining home and auto policies saves up to 25%, sometimes hitting 40% with companies like American Family.
Security systems, smart locks, and fire sprinklers earn 5-20% off.
New homes under 10 years old? Up to 25% savings.
Paying annually instead of monthly saves about 5%.
Seniors, retirees, and claim-free customers get breaks too.
Even professional associations and alumni groups reveal discounts.
Stack these right, and the savings add up fast.
Does Filing a Claim Always Increase My Homeowners Insurance Premium?
Filing a claim doesn’t *always* increase premiums, but it usually does.
State laws sometimes limit rate hikes, and homeowners with spotless records might dodge increases. Single, isolated claims often produce minimal or temporary bumps.
Equipment breakdown coverage can prevent rate jumps for specific failures. The type of claim matters too—some barely move the needle compared to liability or weather disasters.
But let’s be real: insurers don’t love paying out, so increases are pretty common.
