Average Home Insurance Rates

Homeowners insurance definitely represents a portion of your monthly cost to maintain shelter for your family.

The average person allows the premium for their homeowners insurance to be included in the mortgage payment, so it is hard to really examine how much of that payment is insurance.

If you look at your monthly statement, you will see a portion of the total indicated as ‘hazard insurance’ and that represents the monthly charge for homeowners insurance.

Be sure to use the FREE tool above and compare insurance rates before making any decisions.

Basis for Establishing Rates for Homeowners Insurance

average home insurance ratesSeveral factors are used to determine a homeowners rate and most of these depend upon the home you purchase, its location, and the age of the home. Some of these factors are:

  • Type of construction – homes that are made of wood result in higher rates than those constructed of brick because wood typically burns faster than brick.
  • House age – homes built more than thirty years ago often need to have heating, plumbing, wiring, and roofing that needs to be updated. A qualified home inspector, hired when you purchase the home, can advise you of this necessity because insurance companies may request that you go ahead with the upgrades before insuring you.
  • New homes, on the other hand – because they have updated systems as well as the latest in fire-retardant materials and protection may accumulate credits.
  • Local fire protection is a factor in home insurance rates. The distance from a working fire hydrant and the type of fire department will affect your rates because each town in the United States has a fire rating. Your state qualifies fire departments by number of responders, equipment available, and water availability.
  • Coverage purchased can affect rates. The amount and type of coverage you buy to cover your home, its contents, and personal liability – all part of a homeowners policy – affect the rates charged.
  • Deductibles – the amount of deductible you choose makes a difference in your rate. Insurance companies charge less for increasing sizes of deductibles because you, as the homeowner, are accepting responsibility for a portion of the risk.
  • Discounts can make a difference also. Discounts vary from company to company and the only way to determine the availability of discounts is to ask.
  • The location of your home makes a difference. If you live in a state that historically has had a high incidence of hurricanes, tornados, and hailstorms, you are likely to pay more for insurance than people do in states with relatively consistent weather that does not threaten structures.

Sample Homeowners Premiums for Several States

To allow individuals to comprehend the costs charged in different states, you may be interested in the following general figures:

  • Florida – with a high incidence of hurricanes – charges are around $1,933 annually
  • Louisiana – also with a high incidence of hurricanes – charges around $1,672 annually
  • Mississippi – with a high incidence of tornadoes – charges right around $1,386 annually
  • Washington state – with few weather incidents – charges $626 annually
  • Utah – again with moderate weather – charges $563 as an average annual cost
  • Idaho – is close to the bottom because it does not have significant weather problems affecting homeowners, charges $518 annually

Taking into consideration amounts of coverage, construction, location, fire departments, and all other variables, in 2014 the average individual in the United States paid slightly under $1,000 annually for homeowners insurance.

Smart Shopping for Homeowners Insurance

There are a number of things to know about shopping for homeowners insurance. You must contact an agency or company that is licensed in your state. The insurance department for your state can inform you of the status of companies and agencies.

All you have to do is access your state’s website by going to the NAIC website and clicking on your state. You can also enter the search bar for your chosen search engine and ask for ‘(name of your state) insurance department and choose the URL marked .gov.

Insurance is sold by three different means:

  • Direct market sales on the Internet or by mail
  • Exclusive sales by agents who only offer the products of one insurance company
  • Independent agents who represent several different insurance companies

Finding someone who sells insurance can be done through their advertising; by questioning friends, neighbors, and acquaintances; as well as looking on your state’s insurance website.

home insurance average ratesThe state’s insurance website will often list the names of insurance companies and agencies, as well as complaint ratios about customer service and claim settlement.

Make sure the companies that you approach are sound financially and have an adequate complaint ratio. You may check these by:

  • Go to your state’s insurance website
  • Visit the National Association of Insurance Commissioners, (NAIC) to look at financial ratings and complaints.
  • A.M. Best gives insurance financial ratings
  • Another rating place is Standard and Poor’s, a division of McGraw-Hill provides financial ratings at their website

Basic Strategies for Getting the Best Deal on Insurance

Acquire several quotations for insurance prices, making certain that the criteria for the quotes is the same with regard to amount, perils, and coverage.

Examine the home you plan to purchase or the one you have carefully and ask these questions:

  • What is the claims history of the home?
  • How will a claim affect my premium?
  • Does credit history affect my premium? If so, how?
  • Should I purchase flood insurance or earthquake insurance since neither is covered under the homeowners policy?
  • Is water damage covered? If so, for what?
  • Is mold coverage given?
  • What perils are insured and what type of coverage should I purchase?
  • What type of coverage is contemplated?
  • Try combining insurance types – put your auto insurance with the same place as your homeowners policy.

Coverage Given by Homeowners Insurance

Homeowners insurance is what insurers call a “package policy” which is an insurance policy providing not only property insurance as well as liability insurance.

The following is an indicator of coverage you can expect from a homeowners policy:

  • Dwelling – amount determined by you – pays for damage to your house from the covered perils to the house, and systems that are fixed parts of the house – plumbing, heating, electrical wiring, and permanent air-conditioning systems.
  • Other structures – typically 10% of the amount of coverage on the home. Such things as freestanding garages, fences, sheds, and other structures not attached to your house. If you have an item that is valued at more than that, you will have to increase this coverage.
  • Personal property – 50% of the coverage on the house – This coverage follows you wherever you go and can give coverage on storage sheds as well as property belonging to your children away at college.
  • Loss of use – 20% of the coverage limit – to pay some additional living expenses in the event that your house needs to be repaired after damage from an insured peril.
  • Personal liability – usually $100,000 – covers financial responsibility and defense costs if you are sued for injury to someone else or their property. This coverage also follows you and your family.
  • Medical payments – A recommended amount is $500 to pay for injury to individuals on your property.

When You Receive Quotations

Request that the quotes be put on a hard copy so you can compare them point-by-point.

You will then be able to save them in a file for next year to re-examine the situation to see if rates vary more or even if you have been unhappy with the insurance company.

Plan to repeat this process annually to insure that you are getting the best rates and companies available.

Use the FREE comparison tool at the bottom of this page to start your search instantly!