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Vermont Homeowners Insurance: What It Costs, What It Covers, and What It Doesn't

Updated October 2026 by Tony Walton, Principal Broker, New England Landmark Realty

Quick Answer

Vermont has some of the cheapest homeowners insurance in the country. Two national rate surveys put the average at $924 a year (ValuePenguin, $350,000 of dwelling coverage, updated September 2026) and $1,170 a year (NerdWallet, $400,000 of dwelling coverage, updated March 2026). Both are less than half the U.S. average. The price is rarely the problem in Vermont. The gaps are: a standard policy does not cover flood, and it does not cover a sewer or sump pump backup unless you add it.

Key Takeaways

Two-Sentence Summary

Insurance is usually the smallest line in a Vermont homeowner's monthly budget, often under $100 a month. What costs Vermont owners real money is the damage a basic policy leaves out, so buyers should check flood risk, claims history, and coverage gaps during the inspection period, not after closing.

If You Only Remember 3 Things

1. Standard homeowners insurance does not cover flood. Flood coverage is a separate policy, and a new federal flood policy usually takes 30 days to start, except when it is bought with a home purchase.
2. Sewer and sump pump backup are not covered unless you add an endorsement (an add-on to your policy). In a Vermont house with a basement, that add-on is worth asking about.
3. If you are buying, get an insurance quote before your inspection deadline, and ask the seller for a CLUE report, a free record of the last seven years of insurance claims on the house.

Quick Facts

• Average Vermont premium: $924 a year, about $77 a month, at $350,000 of dwelling coverage (ValuePenguin, September 2026)
• U.S. average, same survey: $2,395 a year. Vermont ranks second cheapest, behind Hawaii.
• Cheapest company in both surveys: Vermont Mutual, founded in 1828 and based in Montpelier
• Credit matters: Vermonters with poor credit paid an average of $2,170 a year versus $1,170 with good credit in NerdWallet's survey
• Required by law? No. Required by your mortgage lender? Yes.
• Federal flood policy limits: up to $250,000 for the house and $100,000 for belongings (FEMA)
• Federal flood program deadline: authorized through December 11, 2026

How Much Does Homeowners Insurance Cost in Vermont?

Less than almost anywhere else in the country. ValuePenguin's September 2026 survey puts Vermont's average at $924 a year for a policy with $350,000 of dwelling coverage, second lowest in the nation behind Hawaii and 61% below the U.S. average of $2,395. NerdWallet's March 2026 survey uses a bigger policy ($400,000 of dwelling coverage, $300,000 of liability, a $1,000 deductible) and lands at $1,170 a year, 53% below its U.S. average of $2,490.

Your price depends mostly on how much it would cost to rebuild your house, not what it would sell for. That number is called the dwelling coverage. ValuePenguin's Vermont averages by dwelling coverage:

• $200,000 of dwelling coverage: $585 a year
• $350,000: $924 a year
• $500,000: $1,252 a year
• $1,000,000: $2,191 a year

What that means for your monthly payment: on a median-priced Vermont home, principal and interest run about $2,340 a month and property taxes about $550 (see our Vermont cost of living guide). Insurance at $77 to $98 a month adds about 3%. In Vermont, property taxes and heating move the budget far more than insurance does. Our free Vermont Home Cost Calculator puts all of it together for any town.

What raises or lowers your premium

• Rebuild cost: bigger and more custom homes cost more to insure.
• Credit: in NerdWallet's survey, poor credit nearly doubled the average Vermont premium, from $1,170 to $2,170 a year.
• Claims history: both yours and the house's. Insurers check a shared claims database before they quote.
• The house itself: the age of the roof, wiring, plumbing and heating system, a wood stove, and the distance to a fire station and hydrant all affect price. Some insurers decline older systems outright, so ask early.
• Deductible: a higher deductible lowers the premium, but you pay more out of pocket when something goes wrong.

Which Companies Are Cheapest in Vermont?

Vermont Mutual came out cheapest in both 2026 surveys: $572 a year at $350,000 of dwelling coverage in ValuePenguin's survey, ahead of State Farm ($682), Allstate ($723) and Concord ($763). In NerdWallet's survey at $200,000 of dwelling coverage, the cheapest were Vermont Mutual ($425), Patriot Insurance ($575), USAA ($595, for military families only), Concord Group ($630) and Union Mutual ($710).

Vermont Mutual has written insurance in Vermont since 1828 and sells only through independent insurance agents, so you can't buy it online. That is one reason a local independent agent, who can quote several companies at once, is often the fastest way to the best price. Survey averages are a starting point. Your own quote will differ.

What a Vermont Homeowners Policy Covers, and What It Doesn't

Vermont's Department of Financial Regulation (the state agency that oversees insurance) lists what a typical homeowners policy covers and excludes.

Usually covered:

• Fire, wind, hail, theft and other sudden damage to the house and your belongings
• Sudden and accidental water damage, including pipes that burst from freezing
• Water damage from ice dams (ice that builds up at the roof edge and forces meltwater under the shingles)
• Liability, if someone is hurt on your property
• Living expenses if the house can't be lived in after a covered loss

Usually not covered:

• Flood. Rising water from a river, stream or heavy rain needs a separate flood policy.
• Sewer, drain or sump pump backup, unless you add a backup endorsement. It is usually inexpensive. Ask for it if the house has a finished basement.
• Groundwater seeping through the foundation.
• Gradual damage from a slow leak or lack of maintenance.

A Vermont winter warning: many policies expect you to keep the heat on, or shut off and drain the water, while a house sits empty. Some also limit coverage once a home has been vacant for a set period. If you own a second home or leave for part of the winter, ask your agent exactly what your policy requires before you go.

Flood Insurance in Vermont

The July 2023 and July 2024 floods showed how far water reaches in Central Vermont. Montpelier, Barre and Waterbury all sit along the Winooski River and its branches. A homeowners policy pays nothing for that kind of damage.

• Who needs it: if your lender finds the house is in a FEMA special flood hazard area, flood insurance is required. Those areas have a 1% chance of flooding in any year, about 26% over a 30-year mortgage. Depending on the area, 20% to 60% of flood damage happens outside the mapped zones (Vermont Department of Financial Regulation).
• What federal coverage pays: up to $250,000 for the house and $100,000 for belongings through the National Flood Insurance Program (NFIP). Private flood policies can go higher.
• The 30-day wait: a new NFIP policy usually takes effect after 30 days. The exception that matters to buyers: a policy bought in connection with a home purchase can start at closing.
• The December 11 deadline: Congress has authorized the NFIP only through December 11, 2026. If it lapses, no new or renewal federal policies can be written until it is renewed, although a seller's existing policy can be transferred to the buyer. Read our flood insurance deadline explainer if you are closing this winter.

Buying a Vermont Home: When to Shop for Insurance

Shop for insurance during your inspection period, not the week before closing. Here is the order that works:

1. Before you make an offer, check the FEMA flood map for the address and ask your agent whether the house has had water problems.
2. After your offer is accepted, ask the seller for a CLUE report. It lists the insurance claims on the house for the past seven years. Only the owner can order it, and it is free.
3. Get a quote within the first few days. Give the insurer the inspection findings on the roof, wiring, plumbing and heating. If a company won't cover an older system, you want to know while you can still negotiate or walk away.
4. If the house is in a flood zone, get both an NFIP and a private flood quote, and ask whether the seller's flood policy can be transferred to you.
5. Bind the policy (make it official) and send proof to your lender before closing.

Our Vermont home buying guide covers the rest of the process, and our closing costs guide shows where the first year's premium fits in your cash to close.

Selling? Your Insurance History Is Part of Your Listing

Buyers now ask about insurance early, and a clean answer helps a sale. Before you list, order your own free CLUE report, find your flood policy declarations page if you have one, and gather receipts for a new roof, wiring or heating system. A transferable flood policy is a real asset in a river town, especially while the federal program runs on short extensions.

Frequently Asked Questions

How much is homeowners insurance in Vermont?

About $924 a year for $350,000 of dwelling coverage (ValuePenguin, September 2026) or $1,170 a year for $400,000 (NerdWallet, March 2026). Both are less than half the U.S. average. Your price depends on the rebuild cost of the house, your credit, and the claims history.

Is homeowners insurance required in Vermont?

Not by state law. Mortgage lenders require it, and the lender will also require flood insurance if the house is in a FEMA special flood hazard area.

Does Vermont homeowners insurance cover flooding?

No. Flood needs a separate policy from the National Flood Insurance Program or a private insurer. Federal policies cover up to $250,000 for the house and $100,000 for belongings.

Who has the cheapest home insurance in Vermont?

Vermont Mutual was cheapest in both 2026 surveys, at $572 a year for $350,000 of dwelling coverage in ValuePenguin's survey. It sells through independent agents, so ask a local agent to quote it alongside other companies.

Are burst pipes and ice dams covered?

Usually yes, as sudden and accidental water damage, according to Vermont's Department of Financial Regulation. Many policies expect you to keep the heat on or drain the water while a house is empty, so check your policy before you leave for the winter.

What to Do Next

Buying or selling and want a second set of eyes on the insurance questions for a specific house? Call our office at 802-253-4711, reach Tony Walton directly at 802-233-4107, or contact us. We are real estate brokers, not insurance agents, so for quotes and coverage advice, talk with a licensed insurance agent.

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• Vermont Home Buying Guide
• Vermont Closing Costs Guide
• Is Vermont Expensive? Cost of Living by the Numbers
• Selling Your Vermont Home

Sources

• ValuePenguin, The Best and Cheapest Home Insurance Companies in Vermont (updated September 25, 2026): $924 average at $350,000 dwelling coverage, averages by coverage level, U.S. average $2,395, rank, company rates
• NerdWallet, The Best Home Insurance in Vermont (updated March 19, 2026): $1,170 average ($400,000 dwelling, $300,000 liability, $1,000 deductible), U.S. average $2,490, poor-credit average $2,170, company rates at $200,000
• Vermont Department of Financial Regulation, Homeowners and Flood Insurance Overview (April 2026): what homeowners policies cover and exclude, NFIP limits, 30-day waiting period and exceptions, flood risk inside and outside mapped zones
• National Association of Realtors, NFIP expires December 11, 2026 (FAQ): what happens during a lapse, policy transfer at closing
• National Association of Realtors, CLUE Report: seven years of claims, free to homeowners
• Agency Checklists, Vermont Mutual: 190 Years Young: founded 1828 in Montpelier, sold only through independent agents
• Monthly payment and property tax figures: New England Landmark Realty, Vermont cost of living guide (September 2026). Monthly insurance and percentage figures calculated by New England Landmark Realty from the sources above.