Insurance & Tax Guides

How premiums are actually rated

According to the NAIC, homeowners premiums are set from location and catastrophe exposure, the cost to rebuild the home and its contents (replacement cost, not market value), claims history, an insurance score derived in part from credit, the home's age, the deductible you choose, and — increasingly — reinsurance costs that insurers pass through to policyholders. State law generally requires that rates not be "excessive, inadequate, or unfairly discriminatory," which is the regulatory floor under all of it.

The NAIC's own Homeowners Insurance Report found the nationwide average premium for owner-occupied homeowners and dwelling-fire policies rose 10.5% between 2021 and 2022, with the dominant HO-3 policy form up 11.26%. The same report cautions that direct state-by-state premium comparisons are inherently imprecise, since coverage requirements, limits, and benefits differ by state.

Why state variation is so large

Catastrophe exposure is the biggest driver — hurricane, wildfire, and hail-prone states carry structurally higher premiums than low-risk ones, independent of anything about an individual house. Property tax runs on an entirely separate, and entirely state-and-local, system: there's no federal property tax, so the bill is a function of your locally assessed value multiplied by a locally set rate, which is why it can differ sharply even between two counties in the same state. The Census Bureau tracks median real estate taxes paid at the state level through the American Community Survey, which is the primary dataset behind most state property-tax comparisons you'll see cited elsewhere.

Flood coverage runs on its own separate track from standard homeowners insurance, and it isn't automatically included in either. Per the NAIC, federally regulated lenders require flood insurance for mortgaged homes in high-risk flood zones, but more than 20% of National Flood Insurance Program claims come from outside those zones — homes in moderate- or low-risk areas do flood, they're just not required to carry the coverage. Standard NFIP policies run around $700 a year in high-risk areas, with lower-cost Preferred Risk Policies available in moderate- and low-risk zones, and private flood insurers as an alternative worth comparing against the NFIP rate.

Assessment and appeals

What you can appeal is the assessed value, not the tax bill directly — and the process and deadline are set locally. Georgia, for example, requires an appeal to the County Board of Tax Assessors within 45 days of the Assessment Notice date, using a standard state form; other states run the same idea through different boards and windows, so check your own county assessor for the actual deadline. On the deduction side, itemizing owners can currently write off state and local taxes — including property tax — up to a combined $40,000 ($20,000 filing separately) under the SALT cap the One Big Beautiful Bill Act raised for 2025 through 2029, up from the $10,000 cap that applied before it. Price your own numbers with the home insurance cost calculator, property tax calculator, and flood insurance cost calculator below.