How Much Does Homeowners Insurance Cost?

Homeowners insurance cost
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Once you buy your dream home, you will probably need to insure your investment, right? There’s no one-size-fits-all price for homeowners insurance, as what you’ll ultimately pay depends on several factors. 

Homeowners’ insurance costs about $1,499 per year. The price may be higher or lower depending on where you live. You also have to consider your area’s susceptibility to natural disasters, the age of your house, the extent of your coverage, and similar factors. 

Below, I will elaborate on the average cost of homeowners insurance in the United States and factors that affect home insurance premiums. 

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Homeowners Insurance Costs by State

The state you live in affects how much you’ll pay for homeowners insurance. In general, the higher your state’s susceptibility to natural disasters, the higher the premium. 

For homeowners insurance, expect to pay around $1,499 annually.

If you look up homeowners insurance prices online, you’ll notice that average costs vary between sources. For example, you’ll get the following data when you average the prices shown on ValuePenguin, Bankrate, and NerdWallet.

 State

 Average Annual Rate

 Average Monthly Rate

 Alabama

 $1,887

 $157

 Alaska

 $1,185

 $99

 Arizona

 $1,389

 $116

 Arkansas

 $2,159

 $180

 California

 $1,337

 $111

 Colorado

 $2,298

 $192

 Connecticut

 $1,299

 $108

 Delaware

 $716

 $60

 Florida

 $1,828

 $152

 Georgia

 $1,575

 $131

 Hawaii

 $643

 $54

 Idaho

 $971

 $81

 Illinois

 $1,386

 $116

 Indiana

 $1,220

 $102

 Iowa

 $1,465

 $122

 Kansas

 $2,660

 $222

 Kentucky

 $2,056

 $171

 Louisiana

 $2,033

 $169

 Maine

 $977

 $81

 Maryland

 $1,240

 $103

 Massachusetts

 $1,437

 $120

 Michigan

 $1,329

 $111

 Minnesota

 $1,825

 $152

 Mississippi

 $1,706

 $142

 Missouri

 $1,954

 $163

 Montana

 $2,088

 $174

 Nebraska

 $2,793

 $233

 Nevada

 $911

 $76

 New Hampshire

$931

 $78

 New Jersey

 $951

 $79

 New Mexico

 $1,595

 $133

 New York

 $1,157

 $96

 North Carolina

 $1,525

 $127

 North Dakota

 $1,773

 $148

 Ohio

 $1,155

 $96

 Oklahoma

 $3,422

 $285

 Oregon

 $926

 $77

 Pennsylvania

 $810

 $68

 Rhode Island

 $1,309

 $109

 South Carolina

 $1,590

 $133

 South Dakota

 $2,047

 $171

 Tennessee

 $2,170

 $181

 Texas

 $2,475

 $206

 Utah

 $854

 $71

 Vermont

 $742

 $62

 Virginia

 $1,209

 $101

 Washington

 $1,049

 $87

 Washington D.C.

 $1,013

 $84

 West Virginia

 $1,121

 $93

 Wisconsin

 $1,058

 $88

 Wyoming

 $1,212

 $101

What accounts for the differences between home insurance premiums per state? In the next section, I’ll talk about why where you live matters, as well as other things that impact home insurance prices.

Factors That Affect Homeowners Insurance

No two insurance policies will look the same. What your neighbor pays to protect their home may not necessarily be what you’ll pay to protect yours. 

Homeowners insurance premiums depend on: 

  • Location 
  • Age of your home 
  • Attractive nuisances 
  • Amount of deductibles paid 
  • Coverage 
  • Credit-based insurance score (CBI) 
  • Claims history 
  • Pets 

Let’s unpack the factors that affect home insurance premiums below.

Location

Some states are more vulnerable to natural disasters than others. The more disaster-prone a state, the higher its prices for home insurance.

For example, Texas has one of the highest average home insurance premiums at $2,475 per year due to 360 significant disasters since 1953.

Conversely, Vermont residents pay an average of $742 in premiums since the state has forested areas that naturally protect against floods and other disasters.

Age of Your Home

No matter how well-kept your house is, it’s going to degrade over time.  An older home becomes more susceptible to natural disasters and requires more upkeep, meaning you’re also more likely to make an insurance claim.

So if your home is very old, you’ll end up paying a lot more in premiums.

Attractive Nuisances

“Attractive nuisance” is insurer-speak for anything that attracts children to your home and poses potential hazards to them

These include: 

  • Swimming pools 
  • Trampolines 
  • Slides 

When you have an attractive nuisance on your property, you increase your chances of having a personal injury suit filed against you. If your policy includes coverage for personal liability, you’ll also need to pay higher premiums.

Amount of Deductibles Paid

In an ideal world, your insurance pays for everything.  In practice, homeowners insurance only pays for part of what you’ll need to shell out if something happens to your house. 

“Deductible” refers to the out-of-pocket expenses insurance doesn’t cover. You can choose between paying a higher premium and lower deductible or vice versa. 

Coverage

Most homeowners insurance policies include at least four of the following coverages: 

  • Dwelling: This one covers only your house. 
  • Other structures: “Other structures” include fences, swimming pools, and slides. 
  • Personal property: You can also have coverage for furniture, jewelry, and similar objects. 
  • Personal liability: If you are liable for any injuries a person sustains while at your house, you can claim personal liability insurance. 
  • Medical payment: Sometimes, you’re not necessarily liable for someone’s injuries while at your house, but you have to pay their medical bills nonetheless. A medical payment clause in your policy can come in handy in this situation.
  • Loss of use: If your house gets burned down, flooded, or destroyed, you will have to live somewhere else for the time being. Luckily, the “loss of use” coverage can help you pay for hefty hotel bills and the like. 

Credit-Based Insurance Score (CBI)

You may have read online that home insurance companies check your credit score when assessing how much you should pay in premiums. But that’s not exactly right. 

According to Experian, insurance companies look at your CBI rather than your credit score per se. Like your credit score, your credit report affects your CBI.

But unlike your credit score, the CBI uses different variables that insurance companies believe are more accurate measures of your likelihood of claiming insurance. 

In general, the higher your CBI, the lower your premiums. However, as Experian notes, a good CBI isn’t a surefire guarantee you’ll save on insurance.

Claims History

You might have a long record of filing insurance claims in the past. Or maybe the area you live in is so disaster-prone that the insurance company receives several claims from residents every so often. 

Either way, expect the insurance company to charge higher premiums to compensate for the risk of higher payouts.

Pets

Insurance companies see aggressive pets as a liability, as there could be several things that could happen that would mean they need to cover.

  • Do you have an aggressive dog?
  • Do you own exotic animals that have the potential to harm others?

If so, you will have to shell out extra premiums for your non-human companion.   

Conclusion

Your final home insurance cost may differ from your state average or even your next-door neighbor’s. That said, it helps to know how insurers calculate the final dollar figure in your policy.

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