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The average annual cost of homeowners insurance is $1,979, but this varies widely depending on the home's location, age, type of construction, and other factors. We conducted a detailed analysis to determine average home insurance rates, eliminating the guesswork and sticker shock. So you can shop with confidence, figure out what kind of coverage you need and how to obtain the best price for home insurance.
Average Cost of Homeowners Insurance by Dwelling Coverage Amount
One of the most critical coverages in your home insurance policy is dwelling coverage. The home insurance provider will pay to rebuild or replace your home if you have a claim for structural damage. We discovered that the average annual premium for $250,000 dwelling coverage in 2021 will be $1,979, or $165 per month (plus installment fees set by the insurance carrier), based on the data collected for the study.
Your policy will cost nearly twice as much if you double your residence coverage. A policy with $500,000 in housing coverage costs an average of $3,519 per year or $293 per month.
How Much Will Homeowners Insurance Cost You?
The cost of home insurance varies greatly across the country, and even within each state.
The annual cost of home insurance is determined by several factors, including:
The location (state and ZIP code).
Dwelling coverage amount.
Amount of personal property
The property's other structures (shed, barn, pool, fence, etc.).
History of claims (both personal and at the address of the residence)
Endorsements or add-ons.
Based on a combination of each state's average housing coverage, we found the average nationwide cost of dwelling coverage to be $2,103 annually or $175 per month. Because each state's average is different, your state's rate could be significantly lower or higher than the national average. The simplest approach to figure out how much you'll have to pay is to compare customized insurance quotations from several firms based on the home's location, household information, and home insurance coverage needs.
Average Cost of Homeowners Insurance by State
The cost of home insurance is heavily influenced by the location of your home. The cost of homeowner's insurance varies depending on the state and city. Delaware has the cheapest dwelling coverage premium, with an average yearly cost of $717, or $59.75 per month, for $250,000. baseline coverage level, according to our research. Tennessee, on the other hand, has the highest cost, at $3,466 per year, or $288.84 each month.
5 Most Expensive States for Homeowners Insurance
The highest prices in the country are primarily due to weather concerns in the most expensive states. Each of the five states has a $250,000 minimum coverage requirement:
Tennessee – Annually= $3,466
Texas – Annually = $3,390
South Carolina- Annually = $3,377
Colorado – Annually = $3,156
Nebraska – Annually = $2,972
5 Least Expensive States for Homeowners Insurance
The following states have the cheapest house insurance rates:
West Virginia $843
Average Cost of Homeowners Insurance by Company
The insurance provider you select will also have a big impact on the cost of homes insurance. Allstate, the cheapest major home insurance carrier, charges an average of $146 per month, while Farmers, the most costly, charges an average of $171 per month.
When looking for the finest homeowners insurance, you should consider more than just price, but if you're only concerned with cost, shopping around might save you hundreds of dollars per year.
Average Cost of Homeowners Insurance by Deductible Amount
A deductible is an amount you will pay toward a covered claim on your home insurance policy. If you have a $1,000 home deductible and a $10,000 covered claim, you'll be responsible for $1,000 and the insurer will cover the remaining $9,000.
When it comes to house insurance deductibles, the bigger the deductible, the lower your annual premiums will be. A greater deductible means the insurance company will pay less per claim, and it will deter insureds from making low-value claims. For the homeowner, these considerations add up to premium savings.
Make sure that you can afford to pay the deductible at any moment if you need to file a claim. With a $2,500 deductible, you can save money on premiums, but not if you aren’t able to pay the first $2,500 if your home is damaged.
What Factors Have the Most Impact on Your Home Insurance Cost?
Insurance companies save money by mitigating risk. The more dangerous a home is to insure, the higher the premium. When it comes to evaluating pricing, some factors, including the home's age and claims history, are more important than others. The following are some of the factors that insurers consider when determining the cost of a policy:
Coverage Type: Replacement cost on the dwelling and belongings is more expensive than actual cash value, but it's worth it to avoid paying for depreciated value in the event of a claim.
Home Location: The location of your home is crucial. The more densely populated an area is, and the more frequently weather-related occurrences occur, the greater the base rate will be.
Dwelling Coverage Amount: The amount of dwelling coverage is one of the most important considerations. The higher the value of your property, the more expensive it will be to restore or replace it, and the higher your home insurance premiums will be.
Personal Property Coverage: Personal property coverage accounts for 70–75 percent of the dwelling coverage in a standard home insurance policy. This is included in the price, however, it can be increased individually if needed. Personal property coverage, like dwelling coverage for homeowners insurance, is the most important factor in renters insurance premiums.
Deductible Amount: The higher the deductible, the lower the premium, but the more you'll have to pay out of pocket if you need to file a claim. Check deductible options to see if the premium savings is worth the higher deductible amount.
Age of the Home: The older the home, the more likely you are to file a claim, and the more expensive the payout will be for repairs or replacement. An older home's insurance premiums could be reduced by updating the roof, heating and cooling systems, electrical, and plumbing.
Credit Score: In most states, your credit history can be used by insurers to determine your home insurance price. California, Maryland, and Massachusetts are the only states that do not consider credit scores.