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What is the average cost of home insurance?

Fact-checked with HomeInsurance.com

The national average cost of home insurance is $1,211, according to the Insurance Information Institute’s latest aggregate data from 2017, but what you pay each year may be a lot different. Your homeowners insurance rate is determined by many things, not just by the type of policy you have.

How much should home insurance cost, how do you reduce your home insurance premium and what factors increase your rate? The answers to these questions will help you understand how the average cost of home insurance and your cost might not match up.

What are the factors that impact my home insurance cost?

There are a variety of factors that influence what you’ll pay for homeowners insurance, including:

  • Location
  • Age of home
  • Credit
  • How much coverage you have
  • Deductible

Location

What state you’re in is one of the biggest factors in  how much you’ll pay for homeowners insurance. Certain states present different risk factors (such as earthquakes, wildfires and hurricanes), and the cost to rebuild in each state can vary as well.

Here’s a sampling of the average price of homeowners insurance policyholders paid across the U.S. in 2017.

StateAverage premium
Arizona$825
California$1,008
Florida$1,951
Kansas$1,584
Nevada$755
North Carolina$1,086
Ohio$862
Texas$1,893
Virginia$999
Wyoming$1,156

As you can see, insurance providers consider some states riskier than others, and so the total cost can sometimes vary as much as $1,000 between two states.

The location of your home also matters on a smaller scale. For example, if you’re in a dangerous neighborhood, you might pay more. Or, if you live close to emergency services like a fire department or fire hydrant, you might pay less.

Age of home

The age of your home is considered an important risk factor for insurance companies because it suggests how likely your home is going to need work in the near future. The younger your home, the lower you will pay for homeowners insurance and vice versa.

Credit

You wouldn’t think your credit score would affect how much you pay for insurance, but it does. A higher credit score mixed with a low debt-to-income ratio can help you pay less each month.

To ensure your credit doesn’t unnecessarily hurt your insurance premium, request a free copy of your credit reports. Check for errors with Transunion, Experian and Equifax because all credit bureaus make mistakes from time to time. If you see a mistake, follow the Federal Trade Commission’s advice on disputing an error

How much coverage you have

The more coverage you opt for, the more you will pay each month. These are the types of coverage you typically have in a policy:

  • Dwelling coverage: This protects the structure of your home (floors, walls, appliances, ceilings) and any attached structures against a host of perils, including theft, vandalism, fire and hail. Should your home need to be rebuilt, dwelling coverage can help rebuild your home up to your policy limit. 
  • Other structures coverage: Should an outside structure (such as a fence, shed or garage) be damaged, other structures coverage may help pay for any needed repairs. 
  • Personal property: This protects the contents of your home. Should a covered incident happen and affect your personal property, your insurance provider would provide you funds to cover for the value of your insured items. You might want to opt for extra coverage for certain items like jewelry or musical instruments that have limits you might exceed.
  • Loss-of-use: Should you be unable to use your home, loss-of-use coverage would pay for any additional living expenses. For example, if you normally spend $400 a month on groceries but have to eat out and end up spending $500, your insurance provider will pay the difference.  
  • Liability coverage: This protects you against lawsuits for personal injury or property damage that you, your family members, or your pets may cause. 
  • Medical payments to others: Whether you are to blame or not, this type of coverage protects you if a guest is hurt while at your home.

These coverages typically have minimum amounts or amounts recommended by your provider, but you may want to add extra coverage in some areas. If you get more coverage, your premium will be higher, but you’ll have more protection if anything happens.

Deductible

You can lower your premium if you’re willing to increase your deductible. This is a valid strategy to save money, but it can catch you off guard if you’re not careful. To safeguard yourself, put any money needed for the deductible into a separate savings account. This way you have the money if you need it.  

Why insurance companies consider these factors to determine your rate

Insurance providers ultimately make their decisions about risk and the likelihood of a peril falling upon you and your family. For example, a person who lives in an old house is more likely to have structural issues after a hard winter. Providers need to maintain a profit margin so the company can continue to provide the same level of service and protection to its customers.

How to save on home insurance

There are many ways to save on homeowners insurance. Some are easy while others are more tedious. It’s often tempting to many homeowners to simply choose a less expensive policy, but this is often not the best course. As a homeowner, you need to protect your investment, and this means getting the best coverage you can afford.

To get the best coverage, see if you can save with these strategies.

Bundle with auto-insurance

Many homeowners insurance companies also offer auto-insurance. By choosing the same company for both, you can often save money on your premiums.

Secure your home 

Making a few safety enhancements to your home can make your property look less risky to insure. Here are some things you can add to possibly get a discount:

  • Smoke detector: Your first line of defense against any fire is a working smoke detector. The requirements for getting a discount for a smoke detector are different for each company (and yours may not even offer it). Because you should have a smoke detector for safety anyway, see if you can also save money in the process.
  • Fire extinguishers: Having a fire extinguisher on every floor is an important safety habit— especially if you heat your home with a woodstove. Whether your insurance company will give you a discount for having fire extinguishers depends, but you should ask.
  • Wind protection: Storm shutters can help protect your home against high winds. Get them professionally installed, and your provider might give you a discount for reducing your home’s risk.
  • Sprinkler system: It will likely take you some time to recoup the money you spend on a sprinkler system from any savings you’ll get from your insurance provider. Nevertheless, sprinkler systems provide an immense amount of safety from fire hazards. You can even get your system to automatically call 911 should it deploy, which should give some peace of mind. 
  • Security system: Security systems deter home burglaries, and because many policies protect homeowners against theft and vandalism, getting a home security system can often get you a substantial discount on your policy. 
  • Deadbolts on doors: Along with security systems, a deadbolt can drastically deter any would-be thieves to your home. Install a deadbolt lock on every major entranceway to your home, and your insurance provider might give you a small discount on your premium.

Raise your deductible

Raising your deductible will reduce your premium. Just make sure you have the money set aside should disaster strike.

Improve your credit score

Not every insurance provider uses credit scores as a risk indicator, but many do. Improve your credit score by paying your bills on time, reducing your debt and keeping your cards open. You should also look into your credit report for any errors.

Look into discounts

Many insurance providers have a variety of ways for their policyholders to get discounts. For example, you may get a discount for not smoking or signing up for automatic payments. Ask your provider what discounts you could be eligible for.

The takeaway

Though what you pay for homeowners insurance is impacted by a variety of factors, there are often a variety of ways you can save. Shop around and you should be able to find a comprehensive policy that fits both your budget and lifestyle.

Lauren Ward

Lauren Ward is a writer for Coverage.com. She specializes in all things personal finance, including insurance, loans, and real estate.

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