Imagine that you’ve had an offer accepted on the house of your dreams and you think you’re ready to close. Suddenly, your lender demands to see proof that you have hazard insurance.

What do you do? You knew that you would have to get homeowners insurance as part of the mortgage closing process, but hazard insurance too?

Don’t worry. Chances are, you’re already covered.

What is hazard insurance?

Hazard insurance is part of your homeowners insurance policy. It covers damage to the physical structure of your house caused by a hazard such as fire or hail, and it doesn’t require separate coverage.

Lenders typically use the term “hazard insurance” to refer to coverage specifically for the physical structure of your house. They want to ensure that their investment is protected, so they will often require you to have certain amounts of coverage before approving your loan.

» MORE: What is the average cost of homeowners insurance?

What does hazard insurance cover?

Hazard insurance pays for damage to your home caused by a named peril. The number of perils covered varies depending on your policy and typically includes:

  • Fire or lightning.
  • Windstorm or hail.
  • Vandalism.
  • Theft.
  • Smoke.
  • Explosions.
  • Riots.
  • Damage from aircraft.
  • Damage caused by vehicles.
  • Volcanic eruptions.
  • Falling objects.
  • Weight of ice, snow and sleet.
  • Water overflow or discharge from household systems like plumbing, air conditioning and appliances.
  • Freezing of those same household systems.
  • Sudden damage from a power surge.
  • Sudden tearing, cracking or bulging of a hot water system, steam system, air conditioning or fire-protective system.

Importantly, there are several types of peril that hazard insurance doesn’t pay for. Coverage for these disasters has to be purchased separately:

  • Flood.
  • Earthquake.
  • Maintenance damage.
  • Sewer backup.

» MORE: The best cheap homeowners insurance for 2020

How much does hazard insurance cost?

Because it is part of your homeowners insurance coverage, hazard insurance doesn’t cost extra if you already have a standard policy. When it comes to the cost of your home insurance policy, factors such as the size of your insurance deductible, the cost to rebuild the home and the total amount of coverage all affect your premium.

Adding coverage for perils not typically included in a homeowners policy — such as flooding or earthquakes — will also cost extra. To make sure you’re getting the best home insurance quotes, shop around and compare prices between companies.

Homeownership is already expensive, so why pay more than you need to for your homeowners insurance? Don’t settle for an expensive rate; cheap homeowners insurance can include great coverage too.

NerdWallet analyzed pricing data from 145 insurance companies to find relatively cheap home insurance in every state, as well as the country’s largest cities. The rates below are based on a homeowners insurance policy for a 40-year-old homeowner with a $1,000 deductible, $300,000 in dwelling coverage and $300,000 in liability coverage, but your rates will differ.

Cheap homeowners insurance from top-rated companies

NerdWallet looked at average rates from some of our top-rated insurance companies to find out which ones have the most affordable homeowners insurance premiums.

Use the table below to see average annual and monthly rates, along with our star rating.

CompanyNerdWallet rating for homeowners insuranceAverage annual rateAverage monthly rate
State Farm5.0NerdWallet rating $1,596$133
Allstate4.5NerdWallet rating $1,606$134
Auto-Owners5.0NerdWallet rating $1,622$135
Chubb5.0NerdWallet rating $1,826$152
Farmers4.5NerdWallet rating $2,102$175
USAA*5.0NerdWallet rating $1,643$137
*USAA is available only to military, veterans and their families.

» MORE: What is the average cost of homeowners insurance?

Cheap home insurance in each state

Where you live typically has a big impact on the cost of insurance for your house and possessions. How close you live to the coast, crime rates in your area, population density and more can all influence your rate. Use the map below to see the lowest cost home insurance in each state and its average annual rate.

Below are the most affordable homeowners insurance companies for each state, along with average annual and monthly rates. USAA was the cheapest home insurance provider in some states but was excluded from the list since its products and services are available only to those in the military, veterans and their families.

StateCheapest company on averageAverage annual rate Average monthly rate
AlaskaState Farm$1,088$91
ArizonaState Farm$934$78
ArkansasArkansas Farm Bureau$2,036$170
ColoradoState Auto$919$77
ConnecticutVermont Mutual$673$56
FloridaSecurity First$747$62
IdahoGrange Insurance Association$721$60
IowaWest Bend$1,070$89
KentuckyState Farm$1,863$155
LouisianaUPC Insurance$922$77
MarylandBrethren Mutual$683$57
MassachusettsQuincy Mutual$746$62
MissouriAuto Club of SoCal$1,417$118
NebraskaFarmers Mutual of Nebraska$2,281$190
New HampshireMapfre$558$47
New JerseySelective$522$44
New MexicoState Farm$1,343$112
New YorkNew York Central Mutual$638$53
North CarolinaTravelers$1,382$115
North DakotaFarmers Union$1,317$110
OregonMutual of Enumclaw$545$45
Rhode IslandState Farm$557$46
South CarolinaBankers Insurance$1,017$85
South DakotaFarmers Mutual of Nebraska$1,672$139
TexasHouston General$1,850$154
UtahAmerican Family$636$53
VermontVermont Mutual$455$38
VirginiaCincinnati Insurance$557$46
Washington, D.C.Chubb$900$75
West VirginiaWestfield$1,008$84
WisconsinRockford Mutual$685$57

» MORE: The best homeowners insurance companies for 2021

Cheap homeowners insurance in the largest U.S. cities

Cheap homeowners insurance isn’t necessarily going to come from the same company in Boston as it will in Chicago, so we looked at the top 20 metropolitan areas in the country to find the lowest homeowners insurance premium in each city, on average.

Use the table below to find the cheapest home insurance in your city, along with average annual and monthly rates.

CityCompanyAverage annual rateAverage monthly rate
BostonQuincy Mutual$733$61
Dallas-PlanoHouston General$1,893$158
DenverState Auto$935$78
HoustonHouston General$1,744$145
Los AngelesAllstate$760$63
Miami-Ft. LauderdaleSecurity First$804$67
Minneapolis-St. PaulAuto-Owners$1,299$108
New York CityNew York Central Mutual$844$70
PhoenixState Farm$918$77
Riverside-San BernardinoMercury$842$70
San DiegoTravelers$652$54
San FranciscoTravelers$580$48
St. LouisAuto Club of SoCal$1,258$105
Tampa-St. PetersburgSecurity First$602$50
Washington, D.C.Chubb$900$75

How to get cheap homeowners insurance

Some take a little more effort than others, but there are a variety of ways to get cheap insurance for your house and possessions. Below are some of the most common ways to save on home insurance.

Shop around. Don’t buy the first policy you get a quote for — compare rates from multiple companies in your area to find an affordable  policy from a reputable company. Our guide to the best homeowners insurance companies can get you started.

Insure your home for the proper amount. Don’t insure your home based on its current market value (that is, how much the home could sell for) — you should actually insure it based on how much it would cost to rebuild your home in the event of a claim. Have your home insurance agent or company estimate your home’s replacement cost so you can insure your house for the correct amount.

» MORE: How to save on homeowners insurance

Bundle your policies. Many carriers offer a discount if you bundle home and auto insurance together to make both policies more affordable.

Increase your deductible. You can lower your premium by choosing a higher deductible, but make sure you have enough cash to cover it should you need to file a claim.

Avoid filing small claims. Most home insurance companies offer a discount for customers who haven’t filed a claim in the last three to five years. If you can, pay cash for home repairs and file a claim only when absolutely necessary to avoid rate hikes.

Avoid risky purchases. Anything considered a high risk for a liability claim, including trampolines and aggressive dog breeds, could raise the cost of your homeowners insurance. So think twice about adding that swimming pool if you want cheap coverage.

» MORE: Does homeowners insurance cover dog bites?

Add safety features to your home. Making your home safer now may save you money on home insurance in the long run. Many insurance companies offer discounts for features that protect your home against fire and theft. Fire extinguishers, deadbolts, security systems and more could all help keep costs low.

Improve your credit. Poor credit generally translates to high insurance costs, including for homeowners insurance. While not an overnight fix, you can rebuild credit by making payments on time and using less than 10% of your total credit card limits, if possible.

» MORE: What to know about a credit-based insurance score