What is the average cost of home insurance?

It is more informative to consider the average cost of homeowners insurance by state or even by city than it is to consider a U.S. average rate. The United States is a big country, and most of the factors that really affect the average prices are local.

Some examples may be crime rates or typical storms. While people who live along the U.S. Gulf Coast may risk damage because of tropical storms and floods, homeowners in the Midwest may suffer more from the threat of fires or snow damage.

For example, North Dakota has a yearly average rate of about $969 a year, or $80 a month, and this is just about the same as the U.S. average.

That doesn’t suggest that any particular homeowner in the state pays the average rate, and many other factors come into play. These could include the value of the house, the cost of rebuilding and repairs, and even the condition of the home.

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Sample Monthly Average Homeowners Insurance Rates by State

average cost of home insuranceIt is possible to compare some average homeowners insurance costs by state. These are some example monthly average rates from the National Association of Insurance Commissioners in a selection of larger states:

  • California: $80.58
  • New York: $91.42
  • Texas: $131.50

These states are only similar because they are three large and populated states.

However, they are all in different parts of the country. Location is usually one of the main things that impacts the average price that homeowners in the area pay.

It is interesting to learn how location affects the rates that average homeowners in a particular part of the country have to pay.

Besides location, these things factor into the rates than any individual might pay:

  • The home’s design and condition: For example, and older house may be more expensive to cover than a newer home that is considered safer.
  • Claim history of the home or homeowner: Some insurers will raise rates after a claim gets made.
  • Credit history: This may seem unfair, but most large insurers never offer their best rates to people with credit problems.
  • Personal risks: A pool or even some kinds of dogs could impact rates.

Highest Average Homeowners Insurance Rates

Texas is not the most populated state on the list above, but it has the highest average costs out of the three. Texas has one of the longest coastlines of any state in the country, and it does get the brunt of hurricanes and tropical storms from time to time.

Actually, the states with the highest homeowners insurance rates are mostly on the Gulf Coast.

The top four include these:

  • Florida
  • Mississippi
  • Louisiana
  • Texas

The fifth state for higher average rates is Oklahoma. It isn’t on the Gulf Coast, but it does suffer from a very high incidence of tornadoes. In fact, Texas also gets tornadoes in the middle of the state.

Like Oklahoma, parts of the state are within the infamous “Tornado Alley,” so residents of the Lone Star State may not have to live near the Gulf of Mexico to suffer from higher home insurance costs.

Lower Average Rates for Homeowners Insurance

homeowners insurance ratesSo, where can homeowners expect the lowest average rates? These tend to be in the states that don’t suffer from a lot of natural disasters and have relatively low rates of crime.

In fact, Oregon, Washington, Idaho, and Utah are all in the Northwestern United States.

Idaho, with an average rate of a little over $500 a year, enjoys the cheapest median home policy prices in the whole country.

The fifth state on the list is Wisconsin, and the most populated parts of this state don’t suffer from a high incidence of natural disasters and are also pretty safe places to live.

What causes home insurance claims?

Obviously, insurers try to set rates to cover anticipated claims and earn some profit. Even though natural disasters may cause a lot of damage, make the news, and cause prices to rise, they may not even be the most common sorts of claims in many local areas within the country.

This is a list of common sources of home policy claims:

  • Wind or hail: 3.37 percent
  • Water or freezing: 1.79 percent
  • Other kinds of property damage: 1.04 percent
  • Theft: .52 percent
  • Lighting, fire, or debris: .43 percent

It is also interesting to consider what kinds of items are usually claimed. Most people probably assume that building property claims are the most common.

Of course, roof or foundation damage can run up very high bills, but these aren’t even the most common type of claims that insurers in some local areas will see.

Average Kinds Of Homeowners Insurance Claims

In fact, the Insurance Information Institute says that claims for jewelry losses are most common. While personal property may be covered by a home policy, homeowners should take care to document the value of engagement rings, diamond earrings, and other expensive jewelry.

Most policies have limits on the amount they will pay for an incident, and these could be lower than the policy owners believe.

Also, to get fairly compensated, it is important to be able to prove the value of the item.

These are some common items that are often claimed and the percentage of claims:

  • Jewelry: 16 percent
  • Electronics: 13 percent
  • Clothes: 13 percent
  • Furniture: 10 percent

This brings up something that all homeowners should consider. Since personal property is commonly claimed, it is important to make sure that all of this property is documented before it gets damaged or ruined.

Homeowners should take the time to create a home inventory, and they should also take care to keep it updated. While this can be done with a notepad and folder, it might be handier to use home inventory software.

There are home inventory programs available online, and there are even some apps that work on cell phones. These days, some good insurers even offer their own apps for free as a service to their clients.

When insurance customers speak with their underwriter, it will be a lot easier to get a fair settlement if they can provide some documentation to back up their claim.

A good inventory should have a quick description and a photo.

Beyond that, it helps to keep track of the price, and this could be done by scanning in a copy of a receipt, if available.

top rated homeowners insurance ratesIf the receipt isn’t available, just finding and storing a reasonable price from an advertisement is probably fine.

Anyway, consumers should not ignore the value of their property. State Farm, one large insurer, says that the average value of just the furniture in a house is over $13,000 and appliances average almost $3,000 in replacement value.

Is your homeowners insurance rate fair?

It is sort of interesting to look at the average price that homeowners in different parts of the country pay.

However, consumers need to understand that these prices can even vary by city, and it is also unlikely that any particular homeowner will actually pay an average price.

However, all consumers are free to compare homeowners insurance prices to make sure they get the best deal. Insurers vary a lot, and a bit of shopping can uncover the best deals.

Use the FREE quote comparison tool below to start your search today!