The average annual cost of homeowners insurance in the United States is $1,023. But don't count on paying that amount. It's only the national average. You could end up paying as little as $600 or over $2,000 in premiums depending on which state you live in.

Homeowners Insurance rates by state

According to the Insurance Information Institute (III), the five states with the highest premiums in 2013 (the most recent data available) were:

  1. Florida: $2,115
  2. Texas: $1,837
  3. Louisiana: $1,822
  4. Oklahoma: $1,654
  5. Mississippi: $1,395

In contrast, the states with the lowest premiums were as follows:

  1. Idaho: $561
  2. Oregon: $568
  3. Utah: $609
  4. Wisconsin: $665
  5. Washington: $676

Why location matters

Why does the state you live in matter so much when determining premiums? And why do residents who live in some states—like Florida—end up paying so much more for coverage?

It mainly has to do with the weather, and how likely it is that your home will be damaged or destroyed by a natural disaster. According to, the likelihood of a catastrophe occurring has played a bigger role in recent years than in the past when determining insurance rates.

Case in point, 8 of the 10 most expensive catastrophes in US history were hurricanes. And five of these have hit the Sunshine State. Because of these catastrophes, Florida residents pay twice as much for home insurance as the average homeowner. Meanwhile, out west, where hurricanes are not a factor, rates are much lower. Idaho homeowners pay almost 50 percent less than the national average.

Still, there hasn't been a hurricane in Florida for over 10 years. Yet, Florida's home insurance premiums continue to increase. This is partly because companies are buying more reinsurance protection.

And even within Florida itself, location matters. People who live in south Florida are the most at-risk and pay higher rates than people living in the Panhandle.

Meanwhile in Texas, people face high insurance costs due to the increased chance of damage from hail, flooding, and hurricanes. And as anyone who was around for Hurricane Katrina knows, Louisiana and Mississippi are high risk areas for hurricanes.

Oklahoma, on the other hand, is the heart of “Tornado Alley”. Some tornadoes in Oklahoma reach the most dangerous level, F-5. In fact, in 2013, Oklahoma experienced a category five tornado. It caused $2.5 billion in property and crop damage.

How can I save on homeowners insurance?

Homeowners who are living in a high-cost state can try saving on their insurance in a number of ways such as:

Shop around

Insurance companies weigh factors differently when they decide how much your premium will cost. One insurer might put a lot of emphasis on the age of your home, while another might care more about your location.

That's why shopping around is one of the best ways to find the lowest homeowners rate. Don't overpay for your home insurance.

Increase your deductible

According to the, raising your deductible from $500 to $2,000 saves homeowners an average of 16 percent per year. Your savings, however, depend largely on your state. One reason for this is because insurance is regulated at the state, rather than federal level. Each state has different insurance laws that factor into a person's premium.

For example, switching your deductible as described above generally saves North Carolina homeowners 41 percent on their rates. But Texas and Indiana homeowners only end up saving six percent.

Ask about discounts

The specific home insurance discounts you can get depend largely on your insurer. Make sure to ask them what kinds of deals they can offer you.

Many companies offer lower premiums if you bundle your policies. This means you'll save if you buy both home insurance and another type of coverage, like car insurance, through the same company.

Other insurers may also give you a discount if you pay your bills electronically, or for being a senior citizen. Often, you'll receive a discount for making your home safer by adding storm shutters, a hail resistant roof, or home safety devices such as a burglar alarm.

Still looking for more ways to reduce your rate? We've outlined some other ways to save in our article: 19 Ways to Save Money on Home Insurance Policies