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Where Do Homeowners Pay the Most for Insurance?

While a LendingTree survey found 88% of Americans would rather own a home than rent one, homeownership is expensive—especially larger homes.

ValuePenguin took this one step further and looked state-by-state, and what the average cost of homeowners insurance in each state to the average cost of a policy with at least $500,000 in coverage.

Its research found South Carolina is the most expensive state for this type of insurance, with  a difference of 139%.

On average, it costs 72% more to get at least $500,000 in dwelling coverage compared to the typical cost of homeowners insurance. The average homeowner spends $1,249 annually on home insurance, compared to an average of $2,148 for a policy with at least $500,000 in coverage.

However, in South Carolina, this type of insurance costs 139% more to get at least $500,000 in dwelling coverage. South Dakota and Louisiana ranked second and third at 123%.

The median home value in South Carolina is just $189,500. South Dakota has a median home value of $174,000, and $188,900 in Louisiana.

Coverage of $500,000 in Hawaii and New Jersey costs 47% more to insure an expensive home relative to the average cost of home insurance, which is the least in the nation. New Jersey and Hawaii are the only states where it costs less than 50% more.

On average, home values in Hawaii are $648,000, and $364,300 in New Jersey.

According to the quarterly U.S. Home Affordability Report from ATTOM, a California-based property information company, homes became less affordable in 440 of 575 counties analyzed in the report. To put that another way, homes were less affordable in 77% of the country than they were the previous quarter, up from 39% from the same period in 2020.

The report calculated the amount of income needed to meet major monthly home ownership expenses— including mortgage, property taxes and insurance—on a median-priced single-family home, assuming a 20% down payment and a 28% maximum “front-end” debt-to-income ratio. The report also pegged the median home price at $317,500, a new high.

ATTOM also reported that of the 575 counties analyzed in the report, 440 (77%) are less affordable in the fourth quarter of 2021 than their historic affordability averages. That is about the same as in the third quarter of 2020, when 74% of the same group of counties were historically less affordable, but far higher than the 39% level in the fourth quarter of last year.”

ValuePenguin stated that Louisiana and Florida—two states prone to natural disasters—are where home insurance for expensive homes costs the most. Securing at least $500,000 in coverage in Louisiana and Florida costs an average of $4,427 and $4,332 a year, respectively.

ValuePenguin used data from HO-3 insurance policies—the most common type of home insurance.

Changing trends brought on by the pandemic and minimalists are also changing housing trends. The U.S. Census Bureau reported just 8% of new single-family homes were at least 4,000-square-feet in 2020. While this is up from 5% in 1999, it is down from its high point of 11% in 2014 through 2016. Utah leads the nation with the percentage of homes with at least five or more bedrooms at 21%.

About Author: Mike Albanese

Mike Albanese is a reporter for DS News and MReport. He is a University of Alabama graduate with a degree in journalism and a minor in communications. He has worked for publications—both print and online—covering numerous beats. A Connecticut native, Albanese currently resides in Lewisville.

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