In 2019, the average homeowners insurance premium was $1,189. During the first half of 2025, it had soared to $1,966, according to Matic, an online insurance agency. That's lower than a separate average we quoted ($2,370) for 2025 premiums from a different source, but still no small cost.
"The average premium for new policies currently stands at $1,966, a 9.3% increase from 2024," says Matic. "This follows an 18.8% increase from 2023 to 2024, and an 11.6% increase in the prior year. While these figures represent a stark contrast to the 3-5% average premium increases seen previously, the rate of increase has slowed."
Premiums may not be rising as quickly as they were, but many find them eye-wateringly high. Still, there may be ways to moderate costs or improve coverage, starting with a more proactive and thoughtful approach at policy renewal time.
Comparison Shop
"The premiums insurance companies charge for homeowners insurance vary widely," says the National Association of Insurance Commissioners (NAIC), a group representing insurance regulators in every state. "It pays to take time to shop around to get the best value. Be sure to ask if you qualify for any discounts. Examples are discounts to protect your home (for example, add storm shutters), get a new roof, or add home security devices (for example, a burglar alarm). Memberships in certain organizations may also provide a discount (AARP, AAA, even a fraternity or sorority)."
Consider "bundling" when you renew your insurance policies. Many insurers give a worthwhile discount if you bundle, meaning you insure more than one risk (for example, auto and homeowners) with the same company.
Read Your Policy or Talk to Your Insurance Agent
A new survey from insurer Nationwide says as many as "37% of homeowners are not confident their current homeowners insurance policy would meet their needs in the event they had to file a claim. And 57% are concerned that their policy may not cover certain types of damages or incidents."
Those numbers are worrying. Homeowners should be actively managing their home coverage, not vaguely worrying whether it's adequate.
When you next renew your policy, carve out a few hours to properly comparison shop for your best deal. That's not only about finding the cheapest premium. It's also about making sure your coverage matches the risks and potential losses you might face.
A trusted insurance agent or broker can answer your questions and do much of the work for you. But still review the paperwork yourself.
Structure of the Home
Begin with the "structure of the home" provisions. "This part of a policy pays to repair or rebuild a home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disaster listed in the policy," says the Insurance Information Institute (III), a trade body. "It will not pay for damage caused by a flood, earthquake or routine wear and tear. Most standard policies also cover structures that are not attached to a house such as a garage, tool shed or gazebo."
You can still get coverage for flood and earthquake risks, but you'll need a separate policy. If your home faces appreciable threats from either of those, you might be glad you paid the extra.
Personal Possessions
The contents of your home and your personal effects are typically covered by homeowners insurance. Indeed, your personal possessions are often protected when they are outside your home, even when traveling abroad.
However, not everything may be fully covered. "Expensive items like jewelry, furs and silverware are covered, but there are usually dollar limits if they are stolen," according to the III. "To insure these items to their full value, individuals can purchase a special personal property endorsement or floater and insure the item for its appraised value."
Ways to Save: Deductibles
You can reduce your premiums by increasing your deductible. Your deductible is the amount of each claim you agree to pay yourself, and may take the form of a dollar amount or a percentage of your total coverage value.
The average deductible on a homeowners policy is $1,000, according to Liberty Mutual Insurance, an insurer, and the common range runs from $500 to $5,000. The higher the deductible you choose, the lower your premium should be, all other things being equal.
You can see why. "If you have a claim and the cost of your repairs is less than your deductible, your insurance won't pay anything," says Liberty Mutual. "For example, if you have damage to your home that costs you $300 to fix and your home insurance policy is $500, you'll pay the $300 repair bill. In this case, it usually wouldn't be necessary to file a home insurance claim."
"Just be sure you can afford the deductible if you have a loss," urges the NAIC. It's a false economy to choose a deductible that you can't afford to pay out of pocket if you have to make a claim.
Ways to Save: Actual Cash Value
You'll likely pay a lower homeowners insurance premium if you choose an actual-cost-value policy. That's because your payout will be lower when you make a claim.
Actual cost value means your insurer will pay to replace or repair your home or goods with similar items of the same age. So, if you don't have the savings to top up your payout so you can buy brand new goods, you'll have to settle for secondhand ones.
If you want everything to be brand new, a "replacement cost policy" should pay out the cost of rebuilding or repairing the home or replacing possessions without a deduction for depreciation, according to the III.
The highest level of coverage comes with a "guarantee or extended replacement cost policy." If a major disaster has hit your area, you may find that labor and material costs for construction work shoot up. And even a replacement cost policy won't cover those additional costs.
"Extended replacement cost is an endorsement on your home insurance policy that extends your dwelling coverage by 10% to 50% of the cost to rebuild your home," says Progressive, an insurer. "Also known as extended dwelling coverage or increased replacement cost, extended replacement cost may help repair or rebuild your home after a covered loss when the cost of materials and labor have increased in your area. Note that 'replacement cost' refers to the cost to rebuild your home, not the actual market value of the house."
