In general, real estate values and construction costs tend to be higher in areas with higher populations. Because the amount of home insurance needed is based on the value of the home, premiums are often higher in more heavily populated places. Vacation and retirement areas, as well as areas experiencing rapid economic growth, also tend to have relatively higher real estate values.

Exposure to catastrophe impacts homeowner insurance rates

The degree of exposure to catastrophe also affects the cost of insurance to homeowners. Brush and forest fires, tornadoes, high winds, hail, freezing rain, snow storms, hurricanes, earthquakes, riots and even terrorist attacks are all types of catastrophes that can occur in the U.S. Since the late 1980s, catastrophes have been occurring with greater frequency and severity, and, in the last decade, have become an even greater consideration in the pricing of home insurance, according to the NAIC report.

Take a look at the 10 states with the highest average annual homeowners' insurance premiums on the following pages.

Wooden houses in an industrial suburb of Buffalo, New York. (Richard Cavalleri / Shutterstock.com)

10. New York

Average homeowners annual premium: $1,158

A classic New England-style home in Connecticut. (Joseph Sohm / Shutterstock.com)

9. Connecticut

Average homeowners annual premium: $1,160

A home in rural Kansas. (Lisa Eastman / Shutterstock.com)

8. Kansas

Average homeowners annual premium: $1,213

A majestic ocean estate in Newport, Rhode Island. (Joseph Sohm / Shutterstock.com)

7. Rhode Island

Average homeowners annual premium: $1,233

A tornado-damaged home in northern Alabama. (Rob Hainer / Shutterstock.com)

6. Alabama

Average homeowners annual premium: $1,248

House for rent in Biloxi, Miss. (Shutterstock.com)

5. Mississippi

Average homeowners annual premium: $1,314

Devastation from the 2013 EF-5 tornado in Moore, Oklahoma. The tornado left a trail of damage 9 miles wide. (jessicakirsh / Shutterstock.com)

4. Oklahoma

Average homeowners annual premium: $1,501

Homes located in a historic district of Galveston, Texas. (Fotoluminate LLC / Shutterstock.com)

3. Texas

Average homeowners annual premium: $1,551

Homes on Royal Street east of the French Quarter in New Orleans, La. (IrinaK / Shutterstock.com)

2. Louisiana

Average homeowners annual premium: $1,742

A typical Southwest Florida concrete block and stucco home with palm trees, tropical plants and flowers, and a bahiagrass lawn. (Anne Kitzman / Shutterstock.com)

1. Florida

Average homeowners annual premium: $2,084

[Related: The 7 types of homes that are hard to insure]