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What is the average cost of homeowners insurance?

Sep 10

If you are a homeowner, home insurance is crucial. While your mortgage company may require it, you are the one who needs it and will be the ones that benefit from it. Homeowners insurance protects your most valuable assets, your home and personal belongings.

To find the average cost for homeowners insurance, we analyzed the rates from across the country. The price of your homeowner's insurance will vary depending on the details you provide, including the age and location of your home and the coverage limits you select. Our analysis can help you understand the price you would expect to pay.

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Average Homeowners Insurance Cost by Company

The national average cost for homeowners insurance was $1,854 annually. This is for home insurance policies with $300,000.00 of dwelling coverage and $100,000 liability coverage.

Progressive, which averaged $1,236, was the most affordable of all large home insurance companies. Progressive was $1,635 less than Travelers, which was $2,871 more than Progressive.

Because each company has its pricing formula, rates can vary significantly between companies. It is essential to shop around for homeowners insurance. Until you shop around, you won't be able to determine which company offers you the best rates and could save hundreds of dollars.

Factors that Influence Home Insurance Rates

Insurance companies use a variety of factors to determine the home insurance rate.

  • The location of your home
  • Cost to rebuild the house
  • Materials used for construction, such as brick, stone, or wood
  • The house age
  • Fire rating of your house's location (how near are you to a water source or fire department)
  • Your personal claims history
  • Your property's claims history
  • You can choose the coverage and policy limits that you want
  • You can choose the deductible
  • Credit (except in California and, Maryland, Massachusetts)

What does Home Insurance cover?

An HO-3 homeowners insurance policy is also known as a standard homeowners policy. It covers your house for any problem, except those listed as exclusions. Damage from flooding or earthquakes is standard exclusion. Homeowners coverage covers your home and personal belongings, but a home policy has many other benefits.

Coverage for dwelling (house structure).

This covers the cost of repairing or replacing (rebuilding) your house or attached structures like a garage, deck, or other similar items. Your dwelling insurance limit should cover the costs of rebuilding your house.

Coverage for other structures

This coverage covers the property not attached to your homes, such as a shed and gazebo. You can increase the coverage to 10% of your dwelling coverage limit.

Loss of usage

Also called additional living costs, this insurance covers extra expenses if you cannot live in your home because of a covered condition. These expenses could include hotel and restaurant costs and services such as boarding pets. The loss of use coverage is usually between 10% and 30% of your dwelling coverage limit.

Insurance for personal property

This includes damage to or loss (through theft, destruction, or both) of personal belongings such as clothes, electronics and furniture. Depending on your policy type, coverage is usually set at 50% to 70% of your dwelling coverage limit.

Schedule your personal property to ensure that high-value items remain fully insured. Scheduled personal property, also known as an endorsement or floater, is an optional coverage that offers more coverage for high-value items.

Personal liability

This includes accidental injuries or damages you cause others. If your dog bites someone in the park, they might file a claim against you. Personal Liability in Home Insurance Covers settlements, judgments against you and legal costs--but not up to your policy's liability limits. Home insurance can be purchased with a limit of liability. This is usually $100,000. However, it's wise that you have enough coverage to cover any damages in a case.

Other medical payments

This coverage is also known as guest medical. This coverage covers minor injuries for people who aren't household members, such as a guest who falls on icy steps. The medical coverage usually covers $1,000 to $5,000.

How to Lower Your Home Insurance Premiums

There are ways to reduce your homeowner's insurance cost.

Raise your deductible

To save money, you can increase your deductible. Your rates will drop if you increase your deductible from $500 to $1,000. If you file a claim, you will be responsible for more of the financial burden. This will translate into a lower premium.

Compare home insurance quotes.

Comparing quotes from multiple insurance companies is one of the easiest and most cost-effective ways to save money on your home insurance. Compare rates from three companies to see the full range of possible costs. Many insurance companies offer home insurance. The price of insurance can differ significantly.

Ask about discounts on home insurance.

Do not assume that your home insurance company automatically gives you all the discounts that you are eligible for. A review of home Insurance discounts can help reduce your home insurance cost.

A discount can be earned by adding innovative home technology or a security system to your home. Bundling your auto and home insurance can also help you get a discount.