The Average Cost of Homeowners Insurance

Table of Content

• Recommended Personal Property Coverage Amounts
• Flood Insurance
• How Do You Calculate Your Home Insurance Needs
• Personal property coverage

Personal property protection ensures you receive the necessary compensation to replace or repair those items. While you have plenty of options to choose from, the right policy protects at a reasonable price. Get peace of mind knowing you’ve protected it with homeowner’s insurance. The most popular type of homeowners policy form is the Special Form, commonly called HO-3.

If you have an older home or live in an area prone to natural disasters, your home insurance is likely to be more expensive. Having a home worth more will also increase your premium as you require a higher amount of dwelling coverage. You can use an online calculator, hire an appraiser, or use your previous policy's coverage limits as a starting point. But home insurance rates depend on specific factors, including your location, the age and construction of your home, its proximity to a fire station, and your claims history. According to the most recent data provided by Insure.com, U.S. homeowners pay an average annual insurance premium of $2,285.

Recommended Personal Property Coverage Amounts

Scheduled personal property—also called an endorsement, floater or rider—is an optional coverage that provides more coverage for expensive items you own. Among large home insurance companies, we found Progressive was the cheapest at an average of $1,236. Travelers was the most expensive at $2,871, which is $1,635 more than Progressive. If you’re reading this article, then the chances are that your house is worth more than $150,000, which means standard insurance policies won’t cover any damage done to it.

They're all located in Tornado Alley — a region of the country that sees frequent tornadoes and hailstorms throughout much of the year. Below is the monthly and annual average home insurance cost by state and how it compares to the national average. The average annual rate for a home with $400,000 in dwelling coverage and $300,000 in liability and $1,000 deductible is about $3,231, according to a rate analysis by Insure.com. But rates vary significantly from state to state and from city to city. Alani Asis is a Personal Finance Reviews Fellow who covers life, automotive, and homeowners insurance.

Flood Insurance

Certain materials are more vulnerable to fire, rotting and other dangers. For instance, homes with metal or tile roofs will likely have lower insurance rates than homes with asphalt roofs. In addition, some materials are more expensive to replace than others, like a marble countertop versus Formica.

Geographic location typically impacts your insurance rates because every area of the country has a different risk level for potential damages. Some areas may have a higher risk of wind damage, for example, while other areas of the country often sustain damage from fires. Every home is different, which means insurance companies rate each home on a case-by-case basis. Your home’s specific characteristics will play a role in determining how much you pay for homeowners insurance. Did you pass down your prized heirloom to a grandchild or sell off a bunch of personal belongings?

How Do You Calculate Your Home Insurance Needs

If you want more personalized help, contact your agent to calculate the home insurance needs for your location and type of house. Once again, if anything changes regarding factors like building materials and construction types, then make sure to update these amounts so that they’re accurate. These regions are vulnerable to hurricanes, flooding, and tornados, which drives up the average annual premium. Replacement cost coverage is the amount of money to replace an object or structure to its pre-loss state.

Typically, standard homeowners policies set liability coverage limits at $300,000 to $500,000, but some set as low as $100,000. Personal liability coverage is designed to protect your assets if you are sued due to bodily injuries or damage to property for which you are liable. The coverage extends to everyone in your household, as well as pets, and can help cover lawsuits, including court costs and damages.

Some insurers don’t cover hail and windstorm damage for homes located in coastal areas. If you live along or near the coast, look for a carrier that specializes in covering coastal properties. Your area may also have organizations that provide storm-related coverages.

You can also check the carrier’s financial-strength rating on the AM Best website. Some providers offer private flood insurance; others offer coverage through the National Flood Insurance Program. Insurers often set claims limits on certain types of property, such as sterling silver, jewelry, fur, money, firearms and stamps. However, the all-perils coverage only applies to damages to your home.

How to Reduce Home Insurance Costs

Home insurance costs vary from company to company, as every company has its own particular way of calculating rates and evaluating risk. Based on our analysis of the cheapest home insurance companies, we found that Erie's average home insurance rate in the lowest, followed by Auto-Owners and USAA. The average homeowners insurance cost for $300,000 in dwelling coverage with $100,000 liability is $2,763. If you bump liability to the recommended amount of $300,000, homeowners insurance with dwelling coverage for a $300,000 house has a national average of $2,779. Homeowners insurance covers your dwelling, personal property, offers liability protection, and covers you for additional living expenses if your home becomes inhabitable due to damage.

If you have a particularly "aggressive" breed as a pet, your insurance company may increase your rates. If you live in an area with high crime rates, stormy weather or are far away from a fire department, your insurance company will factor these and other risks into your insurance price. As with many types of insurance policies, it’s important to know exactly what you’re getting protection for.

This compensation may impact how, where and in what order products appear. Bankrate.com does not include all companies or all available products. Homeowners insurance costs are rising, likely due to inflation, supply chain disruptions and increased costs for materials and labor. Our goal is to give you the best advice to help you make smart personal finance decisions.

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Table of Content

• Average Homeowners Insurance Cost Per Year for Various Coverage Amounts
• How much is homeowners insurance?
• Does a $150,000 Home Need Replacement Cost Coverage?
• Factors in Home Insurance Rates
• When does a lender require you to purchase homeowners insurance?
• Why do I need homeowners insurance?

Rates are based on a policy with dwelling coverage of $300,000 and liability coverage of $100,000. You can’t up and move your house, but there are ways to lower your homeowners insurance costs. This covers damage or loss of your personal belongings, such as clothes, electronics, furniture and appliances.

Personal liability in home insurance covers settlements, judgments against you and lawyer costs—but only up to the liability limits of your policy. This covers damage to property not attached to your house, such as a shed or gazebo. The coverage amount usually is 10% of your dwelling coverage limit but you can increase it. Once you have all this information, you will calculate how much it’ll cost per month or even per year in terms of homeowners insurance premiums. To do this, simply plug these numbers into an online calculator, and it’ll give you the exact amount.

Average Homeowners Insurance Cost Per Year for Various Coverage Amounts

For example, while rates are extremely low in Hawaii, this doesn’t factor in the cost of separate hurricane insurance you’ll be required to purchase if you have a mortgage. Depending on where you live, you can expect to pay anywhere from $500 a year to over $4,000 a year — a $3,500 difference. At Insure.com, we are committed to providing honest and reliable information so that you can make the best financial decisions for you and your family. All of our content is written and reviewed by industry professionals and insurance experts.

No matter where your home is, there are some ways you can save some money on your policy. Before joining Insider, she wrote about financial and automotive topics as a freelancer for brands like LendingTree and Credit Karma. Liz was a reporter at Insider, primarily covering personal-finance topics. Get the latest tips you need to manage your money — delivered to you biweekly. Means lowering your potential benefit, which makes your rates cheaper.

How much is homeowners insurance?

We leveraged our industry experience, access to average premium data through Quadrant Information Services and common homeowner scenarios to help give an idea how much home insurance might cost. However, while our insight into average home insurance costs can be helpful, keep in mind that your rate will vary based on your own unique rating profile. Below, you can compare your state’s average home insurance costs to others across the nation. This homeowners insurance comparison by state shows average homeowners insurance for a $300,000 house, or that amount in dwelling coverage, and a $1,000 deductible.

As for your personal belongings coverage, limits are typically set at 50% to 70% of your dwelling coverage, and expensive items typically have a dollar limit placed on them. If you need or want more, you’ll need to analyze the value of your home and assets to adjust the limits accordingly. A homeowners insurance calculator can also help you run the numbers. As you can see from the two tables above, your premium costs will be based on location, house size, and the type of construction materials being used. A standard home insurance policy might not provide all the protections you need.

Does a $150,000 Home Need Replacement Cost Coverage?

In addition to homeowners insurance, you should also consider additional insurance coverage, including hazard, flood and earthquake insurance. Personal property coverage refers to insurance that covers damage to all personal property and possessions inside your home. This can include everything from valuable furniture items to electronics to jewelry and more. To determine how much personal property coverage you need, you should make an inventory of your personal belongings and estimate what it would cost to replace them. This number is what you should aim for as a personal property coverage limit. In some cases, your insurer will automatically set your personal property coverage at 50% of your dwelling coverage.

The cost of home insurance can vary depending on many factors, including where you live, your home’s value, the frequency of weather-related risks and potential natural disasters. Most states allow insurance companies to check your credit history. Here’s the average cost of homeowners insurance for five different home ages. Electing for a higher deductible is one to lower your home insurance rates, but it also means you'll have to pay more out of pocket when you file a claim.

Getting rid of coverage you don't absolutely need can help lower your home insurance bill. Your deductible is the amount you’re required to pay out of pocket on each claim before your insurance kicks in to cover the rest. Most insurance companies give you the option of choosing a deductible of anywhere from $500 to $2,500, although this will vary by insurer. The Kansas Insurance Department estimated losses of $220,840,165 in 2022 from windstorms, tornados and hail, which contributes to Kansas’ high homeowners insurance rates. We compiled the nationwide average costs of home insurance based on different amounts of coverage, based on an analysis by Insure.com.

This interactive guide can help you identify potential problems before they arise. Covers medical payments for minor injuries to people who don't live with you but get hurt on your property. Helpful bicycle insurance agents, who can assist you in servicing your policy, are just a phone call away. Helpful event insurance agents, who can assist you in servicing your policy, are just a phone call away. Of course, depending on the size/age/quality level of these items will determine how much coverage – if any – you’ll get for them if they get destroyed due to some sort of damage. So you’ll be paying more or less than these amounts depending on the factors listed above for each state.

When does a lender require you to purchase homeowners insurance?

If someone injures themselves on your property and you exhaust your homeowner’s insurance, you could end up paying out of pocket. Make a list of all your assets, determine what is and isn’t covered, include bank accounts and investments. If your policy maxes out at a number less than this one, then consider the benefits of umbrella insurance.

Replacement cost coverage pays the amount needed to replace your belongings with comparable items at current market prices. A few providers offer replacement cost coverage in their standard policies; others provide replacement cost riders. Deductibles also vary by company, but most insurance policies require a $500 or $1,000 minimum deductible. If you pay a deductible higher than $1,000, that may save you money on the coverage policy long-term.

Its average rates are an astounding 203% lower than the national average. For more protection, you can choose replacement cost coverage instead. With this type of policy, your insurer will pay out what it would cost to repair or rebuild your home in today's dollars. Other coverage options are typically optional endorsements but not always.