September 2, 2025
Delaware homeowners enjoy some of the nation’s lowest insurance rates, but coastal flood and wind risks make smart coverage choices critical statewide.
Delaware homeowners enjoy some of the nation's most affordable insurance rates, but the First State's unique coastal geography presents specific challenges that require careful consideration when selecting coverage. With average annual premiums of $964-$974 for $300,000 dwelling coverage, Delaware ranks among the least expensive states for homeowners insurance. Based on average premiums for $300,000 dwelling coverage, Delaware homeowners typically pay less than the national average of $2,466. However, individual rates may vary significantly based on location, age of home, and coverage choices.
Delaware's compact geography means that virtually every resident lives within reach of coastal waters, creating a complex risk profile that combines affordable baseline rates with location-specific exposures. The state's homeowners insurance market reflects this unique position, offering competitive pricing while addressing the realities of coastal living.
Delaware homeowners pay an average of $964 per year for $300,000 in dwelling coverage, making it the third-cheapest state in the nation for homeowners insurance after Hawaii and Vermont. This affordability stems from several factors, including lower average crime rates, less dense population centers, and a regulatory environment that has historically kept rate increases in check.
Nationwide is among the lowest-cost providers in Delaware based on average quoted premiums, with an average annual premium of $884. Rates may vary based on property details and underwriting criteria. State Farm also offers competitive rates well below the state average. The price differential between carriers can be substantial, making shopping around essential for Delaware homeowners.
Delaware's 28-mile Atlantic coastline brings both economic benefits and insurance complications. The coastal counties, Sussex, Kent, and New Castle, each face distinct wind and water challenges that significantly impact insurance considerations.
Sussex County, home to popular destinations like Rehoboth Beach, Bethany Beach, and Fenwick Island, represents the highest-risk area for coastal exposures. Properties in these areas commonly face:
The average cost of flood insurance in Delaware is $1,497 annually under the National Flood Insurance Program, with rates having increased significantly under FEMA's Risk Rating 2.0 methodology. According to many insurers, carriers frequently require specialized deductibles for named storms, typically ranging from 1-5% of the dwelling coverage amount.
While not directly oceanfront, both Kent and New Castle counties contain extensive riverfront and bay-front properties along the Delaware River and Delaware Bay. These areas face unique challenges including:
Delaware's flat terrain creates high flood exposure even outside FEMA-designated Special Flood Hazard Areas, with statistics showing that many flood insurance claims come from people living outside mapped floodplains. This characteristic makes flood insurance considerations critical for virtually all Delaware homeowners, not just those in designated high-risk zones.
More than 20 percent of flood insurance claims come from people outside of mapped high-risk areas, and most homeowners insurance doesn't cover floods. Delaware residents have access to both National Flood Insurance Program (NFIP) policies and a growing private flood insurance market that can offer higher coverage limits and additional features.
Properties in high-risk flood zones are required by mortgage lenders to maintain flood insurance for the life of the loan. While not required outside high-risk zones, voluntary flood insurance may be advisable depending on local topography and drainage. A licensed insurance professional can help evaluate whether it's appropriate for individual properties.
Delaware's low-lying geography and high water table create frequent issues with sewer backup and sump pump overflow, particularly in areas near the Delaware Bay and inland estuaries. Water backup coverage has become a commonly recommended endorsement, as standard homeowners policies typically exclude these types of water damage.
The flat terrain that characterizes much of Delaware means that drainage issues can affect properties far from traditional flood sources. Heavy rainfall events can overwhelm municipal drainage systems, creating flooding situations that wouldn't be covered under traditional flood policies but may be addressed through sewer backup endorsements.
Delaware's rich history translates into significant older housing stock, particularly in Wilmington and Dover. Climate change is increasing rainfall and flooding in Maryland, which is contributing to rising premiums in the state - a trend that affects Delaware as well. According to many insurers, homes built before 1970 may require additional underwriting scrutiny due to outdated systems or materials, such as:
Many carriers now require 4-point inspections for older homes, examining the electrical, plumbing, HVAC, and roofing systems. Properties that don't meet current standards may face surcharges, coverage exclusions, or requirements for updates before coverage can be bound.
While Delaware's coastal location moderates winter temperatures compared to inland areas, the state still faces significant cold-weather risks that can impact homeowners insurance claims:
Carriers increasingly encourage or require specific winter preparedness measures, including adequate insulation, pipe wrap installation, and regular roof inspections.
For mortgage servicers and financial institutions operating in Delaware's complex insurance landscape, partnerships with licensed insurance service providers can help streamline insurance inquiries and offer policyholders access to specialized expertise.
Covered provides access to licensed insurance agents who can support Delaware homeowners in understanding coastal exposures and available coverage options. Some servicers report improved call routing efficiency when connecting customers directly with insurance professionals who understand Delaware's unique coastal and flood risks, though results may vary. This approach can help ensure customers receive guidance on navigating Delaware's complex insurance requirements, from flood insurance decisions to appropriate wind and water coverage levels.
Statements regarding partner outcomes are based on internal feedback and not guaranteed.
Delaware's homeowners insurance rates compare favorably with neighboring Mid-Atlantic states, though each state faces distinct risk profiles:
Delaware's rates remain the lowest among its neighbors, primarily due to its smaller size, lower population density, and historically effective insurance regulation. However, the state's universal coastal influence means that even inland properties may face weather-related risks similar to those in coastal areas of larger states.
The Delaware Department of Natural Resources and Environmental Control is creating the state's 2025 Climate Action Plan, set to be published by November 2025, as climate change affects Delaware with increasing natural disasters, precipitation, and rising sea levels. Experts anticipate that increasing sea levels and storm activity may affect insurance pricing and availability in the future. The Delaware Department of Natural Resources is expected to address these impacts in its 2025 Climate Action Plan.
The state's coastal towns remain particularly susceptible to flooding and severe storms, with rising sea levels expected to increase both the frequency and severity of coastal flooding events. Insurance carriers are responding with more sophisticated risk assessment tools and pricing models that better reflect individual property risks rather than broad geographic averages.
Delaware's insurance regulatory environment has historically been business-friendly while maintaining consumer protections. The Delaware Department of Insurance announced in April 2025 that Liberty Mutual paid a $300,000 penalty across three member companies for falsely advertising auto and homeowners insurance discounts, demonstrating active regulatory oversight of market practices.
Delaware's homeowners insurance market offers significant advantages through competitive pricing and robust carrier competition. However, the state's unique coastal geography requires careful attention to flood insurance, wind coverage, and older home considerations. Property owners benefit from working with agents who understand the interplay between standard homeowners coverage, flood insurance requirements, and the specific exposures created by Delaware's coastal environment.
The combination of affordable base rates and specialized coverage needs makes Delaware an attractive market for both carriers and consumers, provided that the unique risks are properly understood and addressed through appropriate coverage selections.
For mortgage servicers and financial institutions seeking to enhance their customer service while reducing operational costs, partnerships with licensed insurance providers can provide value. These relationships can help ensure customers receive professional guidance on Delaware's complex insurance landscape while supporting overall satisfaction with their servicing experience. Covered Insurance Agency is a licensed insurance provider. If you click on a link and purchase a policy, Covered may receive compensation.
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*Savings claim based upon averaging actual anonymized savings data for dwelling-only insurance rates paid (from July 2023 - June 2024) by customers of two of Covered’s largest mortgage industry partners across twenty-seven (27) US states. Bundles and non-dwelling insurance coverages were excluded.
† Net Promoter Score (“NPS”)® calculation averages post-purchase customer satisfaction surveys from 9/24/2024 - 2/28/2025. NPS® is a market research metric measuring customer satisfaction with a scoring calculation that incorporates both detractor and promoter customer feedback.
Quotes are presented solely for your convenience. Savings may vary. Rates are subject to change based upon the specific coverage you select and other factors that apply to your situation. CA License #0M81402, doing business as Cubbard Insurance Solutions in California.
