How Much Does Home Insurance Cost?

Posted July 10th, 2017 by Alexa Goyette

There’s a reason that 95% of homeowners invest in homeowners insurance. Buying a home is one of the biggest investments someone can make in their lifetime, so he or she will want to protect this property. Making sure you get strong coverage while maintaining a budget may be a huge priority for you, whether you’re thinking of switching insurance companies or purchasing home insurance for the first time.

Depending on the cost of your home and the amenities you have, you may not need a high amount of home insurance coverage. However, homeowners insurance is not something you want to skimp on; if anything happens to your house or personal property, you’re going to want protection to ensure that you’ll get repairs and replacements as needed.

The average annual premium for homeowners insurance in the U.S. is between $300 and $1,000. This $700 range might seem pretty substantial, but considering all the factors that contribute to an individual’s rates, it makes perfect sense. How do these factors apply to you? Are they helping you or hurting you? Protecting your home is extremely important; understanding why your quotes are lower, higher, or equal to the national average premium rates are important, as they may push you to do certain behaviors to improve these costs, like improving your credit score or deciding not to build that swimming pool.


The Cost of Your Deductible

You can pick a plan based on the amount you want to pay in deductibles. If you opt to pay a higher deductible, your annual cost of your insurance policy will be lower. However, the downside to this option is that you’ll have to pay more money to meet your deductible cost if you need to make a claim. Paying a lower deductible will cost you more on your annual plan cost, but you’ll pay less if you need to make a claim. There are pros and cons to each option.


Age of Your Home

Understandably, your premium will increase if you have an old house. Older homes are more likely to have issues with their roofs, pipes, and such, so they are considered to be more of a liability.


Price to Rebuild

If anything happens to your home, your homeowners insurance will cover most of the costs of rebuilding the damaged areas. The price to rebuild a house per square foot varies based on construction rates in your area. The national average cost to rebuild is $95.51 per square foot. The pricier the repair rates, the higher your premiums will be.


Your Location’s Risk Level

Locations that are more prone to natural disasters often result in higher premiums, as they are considered high risk areas. (Be aware that homeowners insurance often requires extra coverage for flood and earthquake protection, so if you live in an area in which these are frequent, make sure you add this coverage onto your policy.)


Your Personal Information

This includes your credit score, age, marital status, education level, and past history of submitting claims. Insurers often put these pieces of information hand-in-hand with your risk level; more educated people are considered lower risk while single people are considered higher risk, for example.


Risky Add-Ons to Your Home

Things like swimming pools and trampolines are considered high risk, as they can lead to dangerous circumstances if not used properly. If someone drowns in your pool or receives a serious injury on your trampoline and decides to press charges, your home insurance coverage would cover the legal expenses; due to this possible extra payment your insurer would make, there may be a hike in your premiums. Even pets may influence your homeowners insurance premiums, as certain animals – like dogs and horses – can be considered a liability.


Inflation of Home Costs

This is simple and not entirely in your control. The increasing value of your home in the current market might lead to an increase in premiums on an annual basis.


Value of Your Personal Property

Since homeowners insurance covers your belongings as well as your home, you should invest in a policy that covers the cost of these items. If you own a lot of expensive things, you’ll want to spend more money on your insurance so you can get the coverage to replace them.


Safety Features

If you have storm shutters, carbon monoxide detectors, or an alarm system, you might get a decrease in your premiums. It’s a win-win situation; you’ll get lower premiums and feel safer in your home.


Buying homeowners insurance is an extremely personalized experienced based on multiple components. The best way to make sure you’re getting the best rates possible on your homeowners insurance is to shop around for rates. The more quotes you receive, the more likely you are to pay the lowest possible price.