The Cost Of Home Insurance

The Cost of Home Insurance

Home insurance is a very important tool. It can save you from unexpected and high financial strains. However, many people do not opt for homeowners insurance as they find it unnecessary. While getting such a policy is not mandatory under the law of the country, it should not be neglected. Here’s some information on the cost of home insurance to help you if you are undecided.

Cost of homeowners insurance in the country
As of 2018, the national average annual premium for home insurance is $1,083. However, depending on where you live, the average annual cost can fall anywhere between $600 to $2,000. The state with the cheapest annual insurance premium of $574 is Oregon. On the other hand, the state with the highest annual homeowners premium of $1,947 is Texas.

Texas and Florida are the two most expensive states for home insurance. This is because coastal states are more susceptible to strong storms. Idaho, Oregon, and Utah are the cheapest states for home insurance premiums, because these states are not prone to extreme weather and are sparsely populated. In general, states with higher insurance costs are coastal and southern, while states with the lowest average premiums are northern and inland. States with a moderate premium cost are Illinois, Montana, and Hawaii, where the annual premiums are $987, $1,003, and $1,018, respectively.

Factors that affect the cost of home insurance
There are two types of factors assessed by home insurance companies when determining the cost of an insurance premium. These are related to the potential risks that you may or may not have control over.

  • Cost factors that are circumstantial
    These include factors like the location of your home, its age, and your credit history. The more risks your home is exposed to in a particular neighborhood, the older it is, and the lower your credit score, the higher will be the insurance cost.
  • Cost factors that you can decide
    These include the amount of coverage you want to have (in terms of structure, personal property, and liability coverage), your deductible amount, and any applicable homeowners insurance discounts. Generally, the coverage for your home should be equal to the full cost of replacement. Additionally, no other factor influences the premium rate more than the amount of dwelling coverage you purchase.

How can you lower the cost of homeowners insurance?
Along with loyalty discounts, insurance bundles, and infrequent claims, you may lower your home insurance premium costs by putting in place certain security and safety features. You may protect your residence with security alarms, smoke detectors, deadbolts on doors, sprinkler systems, wind protection, and fire extinguishers. Many insurance providers offer discounts based on the security systems installed at your home, as this lowers the risk of damage to the property. You may also try to increase your credit score, which will work in your favor and help lower the premium cost.

As you can see, there is no fixed rate for a home insurance cover. Each home is unique and has its own set of factors and qualities, which determine the cost of cover. Thus, the cost of homeowners insurance varies from property to property. The general rule to follow is to know that the more your home is at risk of damage, the higher will be the insurance cost. This is evident from the statistics mentioned. If you live in a state where your home is at a higher risk of damage, premium rates will be high, and vice versa. To minimize the cost, you can adopt various measures as mentioned earlier.

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