From sample of quotes for that location, controlling for coverage value

You can see that no median price was less than $2,000, and that it’s mostly high coverage plans that are represented. The largest one, Nueces County (which includes Mustang Island, an extreme flood risk) had differences of over $5,000! They are also all in Texas, Florida, and Louisiana - three of the four most expensive states in our data set. (The area with the biggest difference in Kansas is Gove County at $2,090).

Next, let’s look at the locations with the smallest variation. These are ones where shopping around would have the least impact, because plans really are mostly the same.

Lowest Differences Between Quotes Per Location

From sample of quotes for that location, controlling for coverage value

As we can see, the plans are much more likely to be low coverage, and the median premiums are much smaller. Missoula, the lowest difference location in our whole data set, is a great example of how the premiums being low forces the difference to be low. Since your insurance costs won’t be negative, there’s simply no way for the high and low end to vary that much when the plans are all so cheap.

To get an even better view of this trend, we can look at a plot of the median premium for a given location and level of coverage against the difference between the 75th and 25th percentile of premiums for that location and level of coverage. This will allow us to see what happens to the differences as the median increases.

For every $1,000 increase in median price, you can expect the difference between the cheap and expensive quotes to increase by around $700. If the median premium is $1,000, the plans will likely all have fairly similar premiums. But for a median premium of $6,000, you could save $4,000 by just shopping around!

Now, let’s turn to look at California specifically. By limiting our investigation to a single state, we can control for all factors and look at the differences in quotes for truly identical criteria. Let’s dig into the difference between the 75th and 25th percentile of yearly premiums for some California cities:

Average Premium Difference In Selected Californian Cities

From sample of quotes for that location, controlling for all criteria

San Francisco is a city infamous for high housing prices, so it should come as no surprise that it’s top of the charts. However, it’s interesting that the differences are relatively constrained here. It appears that California is a more “fair” state where differences in insurance premiums are lessened - so even though the more expensive locations still have more variation, the variation is just lower across the board.

We can contrast that with data from Texas. Note that the Texas data is partitioned by zip code, not city, although we’ve included the city the zip code resides within:

Average Premium Difference In Selected Texan Zip Codes

From sample of quotes for that location, controlling for all criteria

It’s night and day between California and Texas. Texas is one of the most expensive states to get home insurance in the country, owing partly to the frequency of catastrophic weather events and partly due to higher insurer expenses. Not only does zip code 78521 in Brownsville have a 25th percentile of premium greater than San Francisco's 75th percentile, but it’s 75th percentile is more than double that!

Turning back to California, let’s find the same trend line we originally found for the whole dataset:

This trendline has a higher R² than the national one - it’s even more likely that a higher median premium means more variation. However, the degree of that variation is lessened. In California, for every $1,000 increase in medium premium, the difference between the 75th and 25th percentile of premiums increases by just $400. (This is the measure of “fairness” for a state).

We can see this in more detail by viewing the data with a stacked area chart. In this kind of chart, we draw a line to show how many of the locations controlling for all criteria had differences no more than a certain value. So, the halfway point on the X-axis (denoted here with a red line) shows the value of difference of the median location, and half of the locations had a difference less than that.

We can see that the halfway point is only $400. Shopping around in California gets you a lot less far than the average state. This is because both forces we’ve analyzed are constraining the prices - the state is a “more fair” one, and the median premiums are on the smaller side, compared to the national standard. Florida, by contrast, is an even more “fair” state than California (each $1000 increase in median premium corresponds to about a $275 increase in difference), but the premiums are high enough that the Florida differences are still much higher than the ones in California.

Some states seem to just be intrinsically more fair than other states when it comes to home insurance quotes. However, no matter how fair the state, more expensive locations always means bigger differences between premiums if you shop around. So if you get a home insurance quote and the yearly premium is expensive, you should get a second opinion - you might be able to save thousands of dollars a year.