How much is homeowners insurance on a million-dollar home?
The average annual national cost of homeowners insurance on a million-dollar home is $6,253, based on $1 million in dwelling coverage, $300,000 in liability coverage and a $2,500 deductible. You might have paid $1 million for your home, but that doesn’t mean it’s the right amount of dwelling coverage. In some areas, market values are inflated, leading to homes that cost more to buy than they would cost to rebuild.
| Coverage | Average annual premium | Average monthly premium |
|---|---|---|
| $1M dwelling, $300k liability, $2,500 deductible | $6,253 | $521 |
“A million-dollar home can be a lot of different things,” says Brenda Powell Wells, director of the Risk Management and Insurance Program at East Carolina University. “In California, it might be a 1,500-square-foot cottage. In other places, it might be a 4,000-square-foot property.”
Location does impact insurance costs, just not because of real estate prices. Are you in a rural area? A city? An area prone to hurricanes or wildfires? Risky weather patterns mean more expensive homeowners insurance, no matter the value of your home.
For example, the average cost of homeowners insurance on a $1 million home in Massachusetts is $3,861 a year. Compare this to Florida, where the average is a whopping $20,711. Factors like severe weather, an insurance crisis due to lawsuits, and insurers leaving the state contribute to Florida's high rates.
Below we've compared three U.S. cities based on what you can buy for $1 million. A market price of $1 million buys you a very different home in various locations, and you should note that:
- A 9,150 square-foot home has very different dwelling coverage needs from a 906 square-foot one, even though they have similar market values.
- The home listed in Florida, at 1,400 square feet, probably doesn't have a replacement cost of $1 million, despite its purchase price.
- The replacement cost of the home, based on its size and features, is far more important for insurance than the market value.
| City | Median home price | $1 million home example | Average cost of insurance, $1 million dwelling coverage* |
|---|---|---|---|
| Aurora, IL | $345,000 | 9 bed, 6.5 bath, 9,150 sq. feet | $5,658 |
| San Diego, CA | $944,000 | 2 bed, 1 bath, 906 sq. ft. | $4,073 |
| Fort Lauderdale, FL | $610,000 | 3 bed, 2 bath, 1,400 sq. feet | $29,872 |
*$1 million dwelling, $100,000 liability, $1,000 deductible (2% hurricane deductible in FL)
Source: Redfin: How much house $1 million buys you across the U.S.
The cost of homeowners insurance can only be determined after you meet with an insurance professional and discuss the details of your home and how much coverage you need. Online insurance calculators help with estimates.
Average homeowners insurance on a million-dollar home by state
The average cost of home insurance for a $1 million house ranges from $2,181 in Hawaii to $20,711 in Florida. In 19 states and Washington, D.C., a hurricane/windstorm deductible applies, impacting the cost of coverage; in Hawaii, hurricanes are excluded from coverage.
| State | Annual premium for a $1M house | Monthly premium for a $1M house | Hurricane deductible |
|---|---|---|---|
| Alaska | $3,152 | $263 | None |
| Alabama | $8,742 | $728 | 2% |
| Arkansas | $8,829 | $736 | None |
| Arizona | $5,521 | $460 | None |
| California | $4,321 | $360 | None |
| Colorado | $9,785 | $815 | None |
| Connecticut | $4,540 | $378 | 2% |
| Washington, D.C. | $3,788 | $316 | None |
| Delaware | $3,903 | $325 | 2% |
| Florida | $20,711 | $1,726 | 2% |
| Georgia | $6,089 | $507 | 2% |
| Hawaii | $2,181 | $182 | None |
| Iowa | $6,467 | $539 | None |
| Idaho | $5,743 | $479 | None |
| Illinois | $6,346 | $529 | None |
| Indiana | $6,588 | $549 | None |
| Kansas | $13,553 | $1,129 | None |
| Kentucky | $9,310 | $776 | None |
| Louisiana | $16,302 | $1,358 | 2% |
| Massachusetts | $3,861 | $322 | 2% |
| Maryland | $4,444 | $370 | 2% |
| Maine | $3,743 | $312 | 2% |
| Michigan | $6,959 | $580 | None |
| Minnesota | $7,125 | $594 | None |
| Missouri | $9,480 | $790 | None |
| Mississippi | $6,078 | $506 | 2% |
| Montana | $7,313 | $609 | None |
| North Carolina | $6,403 | $534 | 2% |
| North Dakota | $6,622 | $552 | None |
| Nebraska | $10,112 | $843 | None |
| New Hampshire | $3,086 | $257 | 2% |
| New Jersey | $3,405 | $284 | 2% |
| New Mexico | $8,444 | $704 | None |
| Nevada | $4,287 | $357 | None |
| New York | $4,629 | $386 | 2% |
| Ohio | $5,047 | $421 | None |
| Oklahoma | $12,703 | $1,059 | None |
| Oregon | $3,997 | $333 | None |
| Pennsylvania | $3,723 | $310 | 2% |
| Rhode Island | $5,943 | $495 | 2% |
| South Carolina | $8,657 | $721 | 2% |
| South Dakota | $8,829 | $736 | None |
| Tennessee | $7,634 | $636 | None |
| Texas | $10,751 | $896 | 2% |
| Utah | $4,246 | $354 | None |
| Virginia | $5,432 | $453 | 2% |
| Vermont | $2,455 | $205 | None |
| Washington | $4,252 | $354 | None |
| Wisconsin | $4,199 | $350 | None |
| West Virginia | $3,928 | $327 | None |
| Wyoming | $5,735 | $478 | None |
$1M homeowners insurance calculator
Home insurance calculator by ZIP code
Average home insurance rates on 1M house in TexasMost & least expensive ZIP codes for homeowners insurance in Texas
| ZIP code | City | Highest rate |
|---|---|---|
| 77550 | Galveston | $10,164 |
| 77586 | El Lago | $9,906 |
| 77551 | Galveston | $9,536 |
| 77554 | Galveston | $9,358 |
| ZIP code | City | Lowest rate |
|---|---|---|
| 78559 | Iglesia Antigua | $1,956 |
| 78593 | Santa Rosa | $1,999 |
| 79915 | El Paso | $2,008 |
| 79905 | El Paso | $2,009 |
Best homeowners insurance on a $1 million house
Amica ranks as the best home insurance company for a $1 million home, based on a combination of rates, Insurance.com's annual customer survey, National Association of Insurance Commissioners (NAIC) complaint index and AM Best Financial strength ratings. It's the cheapest carrier in our ranking and also has the lowest complaint ratio.
See how major insurance companies ranked below.
| Company | AM Best | NAIC | Average annual premium | Survey score | Insurance.com rating |
|---|---|---|---|---|---|
| Amica | A+ | 0.37 | $3,296 | 4.12 | 4.57 |
| Allstate | A+ | 1.26 | $4,356 | 4.38 | 4.27 |
| Travelers | A++ | 0.91 | $5,658 | 4.25 | 4.2 |
| State Farm | A+ | 1.15 | $5,297 | 4.32 | 4.13 |
| Farmers | A | 0.89 | $8,048 | 4.31 | 3.71 |
| Nationwide | A | 1.34 | $7,761 | 4.31 | 3.63 |
| Progressive | A+ | 1.5 | $8,699 | 4.04 | 3.42 |
| USAA | A++ | 0.46 | $5,433 | 4.53 | 4.47 |
What does homeowners insurance on a $1 million home cover?
Homeowners insurance on a million-dollar home includes coverage for your home, other structures on the property, personal property, additional living expenses and liability. For a home with a $1 million replacement cost, that is the amount of Coverage A (dwelling coverage). Other coverages on the policy are set as percentages of that coverage or selected by the policyholder. A $1 million home can be covered by either an HO-3 (standard) policy or an HO-5 (high-value) policy. These policies cover the same things, but an HO-5 expands coverage for personal property and often includes extended replacement cost without an endorsement.
| Coverage | Limits on a $1 million policy | What it covers |
|---|---|---|
| Coverage A: Dwelling coverage | $1 million + any extended replacement cost endorsements | The structure of the home and anything attached to it |
| Coverage B: Other structures | $100,000 (10% of dwelling coverage) | Structures on the property not attached to the house |
| Coverage C: Personal property | $500,000 - $700,000 (50% - 70% of dwelling coverage) | Contents of the home |
| Coverage D: Additional living expenses | $200,000 - $300,000 (20% - 30% of dwelling coverage) | Expenses to live elsewhere during repairs on a covered loss beyond regular expenses |
| Coverage E: Liability | $100,000 - $500,000 (selected by policyholder) | Damages or injuries to others for which a household member is responsible, legal fees and judgments |
An HO-5 home insurance policy offers high-value homeowners added coverage, some of which is available as an endorsement on an HO-3.
| Coverage | HO-3 | HO-5 |
|---|---|---|
| Personal property coverage basis | Actual cash value (replacement cost with endorsement) | Replacement cost |
| Personal property perils | Named perils | Open perils |
| Eligibility | Most homes | Newer, high-value homes, some carriers have dwelling coverage minimums |
| Cost | Lower | Higher |
You may also want to look into flood insurance, as it’s not included in a regular home insurance policy. Additional coverage such as earthquake or windstorm coverage can be added as well.
Homeowners insurance on a million-dollar home by liability level
If you own a million-dollar home, increasing your liability limits is important to protect your assets. A standard policy comes with $100,000, but increasing your coverage is easy and affordable; the rate increases range from $1 a year at USAA to $237 at State Farm. Progressive shows no rate increase at all.
Take a look at the table below. You’ll see that increasing your liability limits does raise your rates, but not significantly.
| Company | $1,000,000 with $2,500 deductible and $100,000 liability | $1,000,000 with $2,500 deductible and $300,000 liability | Difference |
|---|---|---|---|
| Amica | $3,270 | $3,296 | $26 |
| Allstate | $4,327 | $4,356 | $29 |
| State Farm | $5,060 | $5,297 | $237 |
| USAA | $5,432 | $5,433 | $1 |
| Travelers | $5,625 | $5,658 | $33 |
| Erie Insurance | $6,720 | $6,743 | $23 |
| Auto-Owners | $6,775 | $6,819 | $44 |
| American Family | $6,797 | $6,825 | $28 |
| Farmers | $7,981 | $8,048 | $67 |
| Progressive | $8,699 | $8,699 | $0 |
Homeowners insurance on a million-dollar home by credit rating
Poor credit raises the cost of insuring a million-dollar home from $5,320 to $13,894 a year, a difference of $8,574 on a policy with $300,000 in liability coverage and a $2,500 deductible.
“Low credit scores are correlated with losses,” Wells says. If an insurance company views you as a financial risk, your rates will be higher.
| Credit tier | $1,000,000 with a $2,500 deductible $100,000 liability | $1,000,000 with $2,500 deductible and $300,000 liability |
|---|---|---|
| Excellent | $5,288 | $5,320 |
| Fair | $7,997 | $8,060 |
| Good | $6,455 | $6,494 |
| Poor | $13,760 | $13,894 |
How to save on homeowners insurance on a million-dollar home
There are several ways to get lower rates on your home insurance policy:
- Ask about discounts. “Talk to your agent about discounts available, such as for smoke alarms and security systems,” Wells says. You can save an average of 18% for bundling your home and auto, for example.
- Raise your deductible. You can save an average of $512 a year by going from a $500 deductible to $2,500, although you will pay more if you file a claim.
- Upgrade your home. If you live in a severe-weather state, equipping your home with weather-resistant features like hurricane shutters or siding or fire-retardant stucco can get you a discount. A new roof earns an average discount of 11%.
- Keep your credit score in good shape, as people with good and excellent credit scores pay significantly less for home insurance (as much as $8,574 a year) than those with poor credit scores.
How much coverage do you need to insure a $1 million dollar home?
You should insure your home for 100% of its replacement cost, and consider adding extended or guaranteed replacement cost coverage to protect you from inflation. Replacement cost is not related to the market value of your home, which is what you can sell it for.
“You need replacement cost coverage, which is enough insurance to rebuild the home the way it was,” Wells says. “The market value of the home is irrelevant.”
A simplified way to calculate the replacement cost of your home is to take the square footage of your house and multiply it by the price of labor and materials in your area to get a rough estimate. It’s best to consult your insurance agent, however.
“I personally feel that you should have your insurer help you estimate the replacement cost of the house,” Wells says. “They have tools to do that. If you are going to make an error, err on the side of over-insurance rather than under-insuring. In the event of a loss, you’ll be glad you had more insurance than needed.”
Standard policies (HO-3) insure your dwelling at replacement cost and your personal belongings at actual cash value (ACV), which only pays out at a depreciated amount. You can add replacement cost coverage for contents as an endorsement. High-value home insurance policies (HO-5) usually include replacement cost coverage for your personal property and insure it against all perils rather than named perils.
Factors affecting the cost of homeowners insurance on a $1 million home
The factors that affect the cost of a $1 million home insurance policy include the location of the home, your claims and (in most states) credit history, coverage limits and deductibles.
| Factor | How it affects rates |
|---|---|
| Location | High-risk areas for severe weather pay higher rates: hurricanes in Florida, wildfires in California |
| Claims history | Previous claims filed by you or on your property increase future rates |
| Credit history | Poor credit is correlated with a higher risk of claims and means higher rates (not permitted in all states) |
| Coverage limits | Increasing your liability coverage, adding coverage for high-value items, and endorsements increase rates |
| Deductible | Lower deductibles result in higher rates and higher deductibles result in lower rates |
“Weather and climate and topography are definitely important. A million-dollar beach house in a hurricane-prone area is much harder to insure than one in an area away from the beach,” Wells says.
California has seen an uptick in wildfires, and home insurance is becoming increasingly difficult to obtain—some major carriers have pulled out of the state. In Florida, severe weather, including storms and flooding, is causing an insurance crisis. Each state has its unique challenges.
Should you get umbrella insurance on a million-dollar home?
Owners of high-value homes should consider umbrella insurance to protect not only the home, but other assets and income. Standard homeowners insurance typically offers liability coverage of up to $500,000, while umbrella insurance is available starting at $1 million in coverage and costs between $300 and $600 a year. Umbrella insurance covers liability claims that exceed the limits on your homeowners insurance policy, and covers some risks that are excluded by homeowners insurance.
Methodology
Home insurance rates are fielded by Quadrant Information Services for Insurance.com in all 50 states and Washington, D.C. National and state home insurance averages are based on the following parameters:
- $1,000,000 in dwelling coverage
- $300,000 in liability coverage
- A $2,500 deductible
- A 2% hurricane deductible in applicable states
- Good credit
We also gather data for:
- $100,000 in liability coverage
- Deductibles ranging from $500 to $5,000
Learn more about our data and methodology.
FAQ: Homeowners insurance on a million-dollar home
What happens if I insure my million-dollar home for less than the replacement cost?
Insuring your home for less than its replacement cost impacts how much your insurance company will pay for a claim and can leave you paying out of pocket for damages exceeding the limits. Insurance companies follow an 80/20 rule when it comes to claims; if you have insured your home for less than 80% of its replacement cost, a partial loss claim settlement may be lower. And, in a total loss claim, your policy will not provide enough to fully rebuild your home.
Is replacement cost coverage mandatory for a $1 million home?
Yes, if you have a loan on your home. Replacement cost coverage is not required by law, but mortgage companies do require it as part of the loan agreement. If you don't have a mortgage, you aren't required to carry insurance.
Is it hard to find home insurance on a $1 million house?
No. The value of the home and its replacement cost don't impact the ease of getting insurance, but age, location and other risks do. “I wouldn’t say it’s hard to get insurance on a million-dollar home in and of itself,” Wells says, “but other factors come into play, such as location. Weather, climate and topography are definitely important. A million-dollar beach house in a hurricane-prone area is much harder to insure than one in an area away from the beach.”
Do I need a high-value (HO-5) policy for a million-dollar home?
No, you don't need an HO-5 policy, but it does offer expanded coverage that is either unavailable or requires an endorsement on an HO-3 policy. It expands coverage for personal property to replacement cost and open perils. An HO-3 policy meets the requirements for most mortgages, but homeowners who want better protection for their personal property should consider an HO-5.
Should I get umbrella insurance?
Yes, you should get umbrella insurance if you own a high-value home, especially if you have additional assets including high-value personal property in the home. Umbrella insurance provides higher liability limits than a homeowners insurance policy and extends coverage beyond the underlying policy's limits, protecting your home and assets from a claim or lawsuit.
How does location affect the cost of insuring a million-dollar home?
The location of your home directly impacts the cost of insuring it. A million-dollar home in a high-risk area, such as the Florida coast or a California wildfire zone, will cost more to insure than the same home in a lower-risk area. Florida has the highest average rates for a million-dollar home at $20,711 a year, an average that is inflated by the highest-risk areas of the state.
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