Here's some genuinely good news if you own a home in Delaware: you're paying less for insurance than nearly everyone else in the country. With average premiums around $974 a year, Delaware ranks as one of the five cheapest states for home insurance. But before you celebrate too much, there are some catches—especially if your home is older, sits near the coast, or has a few quirks that make insurers nervous.
Delaware's small size actually works in your favor here. With a compact insurance market and solid competition among providers, you've got options. But you'll need to understand what drives your costs, what your policy actually covers, and where the gaps might trip you up. Let's walk through everything you need to know.
What Makes Delaware Home Insurance Affordable
Delaware homeowners save about $1,642 annually compared to the national average of $2,466. That's real money. Why? Delaware doesn't deal with the catastrophic weather events that plague other coastal states. No hurricanes like Florida, no wildfire risk like California, and no tornado alley drama. While coastal Delaware does face flooding concerns, the risk is localized and manageable.
The state's small size also means insurers can spread risk efficiently across a compact area. Competition among major carriers like State Farm (averaging $704 per year), Nationwide ($884), and Travelers keeps everyone honest with pricing. Delaware's regulatory environment doesn't hurt either—the Delaware Department of Insurance maintains oversight without creating barriers that would drive insurers away.
That said, premiums have climbed 17.5% from 2018 to 2023, and insurance losses in the state have tripled since 2013. You're still getting a deal, but it's not quite the bargain it used to be.
The Coastal Flooding Reality
If you live in Rehoboth Beach, Dewey Beach, Bethany Beach, or anywhere along Delaware's coastline, listen up: your standard home insurance policy does not cover flood damage. Not a drop. This catches people off guard constantly, but it's non-negotiable.
Coastal Delaware has specific flood zone designations that matter. Zone AE covers high-risk areas near coastlines where flood insurance is mandatory if you have a federally backed mortgage. Zone VE is worse—these coastal areas face wave hazards and carry the highest insurance costs. Zone X is moderate-to-low risk, where flood insurance isn't required but is still smart to have.
Here's what trips people up: flood insurance has a 30-day waiting period after purchase before coverage kicks in. You can't wait until a storm is headed your way and buy it last minute. The National Flood Insurance Program provides coverage up to $250,000 for your home's structure and $100,000 for contents. Good news though—many Delaware coastal communities participate in the Community Rating System, which can shave 10% off your flood premiums through better local floodplain management.
The Older Home Premium Problem
Delaware has beautiful historic homes, especially in areas like Wilmington, Newark, and Dover. But here's the hard truth: older homes can cost 40% more to insure than new construction. Insurers worry about outdated electrical systems (think knob-and-tube wiring), old plumbing that could burst, roofs past their prime, and heating systems that haven't been updated since the Reagan administration.
The good news? Updates matter. If you've modernized your electrical panel, replaced old plumbing, put on a new roof, or upgraded your heating and cooling system, tell your insurer. These improvements can significantly reduce your premium because they lower the risk of claims. Some carriers even offer discounts for specific upgrades like impact-resistant roofing or whole-home generators.
If you're shopping for an older home, get an insurance quote before closing. Sometimes the premium difference between two similar properties comes down to one having updated systems and the other needing work. That can affect whether the home fits your budget.
How Your Credit Score Affects Everything
In Delaware, your credit score matters more than almost anything else when it comes to home insurance pricing. Homeowners with poor credit pay an average of $2,375 annually—that's 132% more than those with good credit. The difference between the lowest and highest premiums based on credit alone averages $1,234.
Why does this matter so much? Insurers have found a correlation between credit scores and claim frequency. It's not about punishing people—it's about risk assessment. If your credit took a hit recently, work on improving it. Even moving from poor to fair credit can save you hundreds of dollars annually on your home insurance.
Coverage Limits and What You Actually Need
Delaware doesn't legally require homeowners insurance unless you have a mortgage—then your lender will require it. But even if you own your home outright, going without coverage is a massive gamble. Your policy should include dwelling coverage (the structure itself), personal property coverage (your belongings), other structures coverage (detached garage, fence, shed), liability coverage (if someone gets hurt on your property), and medical payments coverage.
Here's where people mess up: they insure based on their home's market value instead of replacement cost. These are different things. Your home might be worth $300,000 on the market, but rebuilding it from scratch after a total loss could cost $400,000 because of labor and materials. The data shows dwelling coverage amounts dramatically affect premiums—a policy covering $100,000 in Delaware averages $537 annually, while $500,000 coverage jumps to $1,809.
Don't skimp on liability coverage either. The standard $100,000 isn't enough in today's litigation environment. Bump it to at least $300,000, or better yet, consider an umbrella policy that adds another $1-2 million in liability protection for around $200-400 annually.
When You Can't Get Standard Coverage
Sometimes homeowners get declined by traditional insurers because of high-risk factors—maybe you're in a coastal flood zone, your home is very old and hasn't been updated, or you've had multiple claims. Delaware has a solution: the Insurance Placement Facility of Delaware, commonly called the Delaware FAIR Plan.
This is a last-resort option that provides basic coverage when you can't get it elsewhere. It's typically more expensive than standard policies and offers more limited coverage, but it beats being uninsured. If you're in this situation, work with an independent insurance agent who knows the Delaware market—they can help you navigate the FAIR Plan or find specialty insurers who might take you on.
How to Get Started
Shopping for home insurance in Delaware is straightforward because you have plenty of competitive options. Start by getting quotes from at least three carriers—State Farm, Nationwide, and Travelers are solid starting points, but also check Amica and USAA if you're eligible. Make sure you're comparing apples to apples: same dwelling coverage amount, same deductible, same liability limits.
Ask about discounts for bundling home and auto insurance, installing security systems, being claim-free for several years, or having a monitored alarm system. If you're in a coastal area, don't forget to get separate flood insurance quotes—and do it at least 30 days before you need coverage to kick in.
Once you have coverage, review it annually. Your home's value changes, you make improvements, and your needs evolve. An annual check-in takes 20 minutes and could save you hundreds or ensure you're not underinsured when you actually need to file a claim.
