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How Much Should I Expect to Pay for Home Insurance?

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How much should I expect to pay for home insurance?
Sarah Badani
Sarah Badani
May. 28, 20213 min read
If you are a first-time homeowner, there are probably countless questions you have, details to check, and terms you need to learn. Home insurance is at the top of this list of terms. Home insurance is an insurance policy that covers your property, home, belongings, and liability in the event of certain incidents such as natural disasters, inclement weather conditions, or vehicular damage.

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Home insurance is important, so you’ll want to get yourself a policy as soon as possible. That way, all your bases are covered in the event that something goes wrong. If you're looking into different policy providers or if you're considering switching providers, the first question you'll ask is, “How much is this going to cost me?” That’s where this guide comes in handy. It’s a convenient breakdown of all the expenses that go into purchasing home insurance, industry standard rates, and any extra fees you need to watch out for.

Home Insurance Costs

When it comes to money, there are 2 parts to your insurance policy to consider: the premium and the deductible. The premium is the monthly fee you'll pay for your coverage, while the deductible is the amount you will have to pay out of pocket in the event that an incident occurs before the policy kicks in. It’s kind of like a copay at your dentist.

Usually, premiums and deductibles are inversely proportional. So, if you have higher premiums, you’re likely to have lower deductibles and vice versa.

Compare the Top Providers

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Premiums & Deductibles: What Makes Them High or Low

There are multiple elements that determine how much of a premium you'll pay each month and what your deductible could be in the event of an incident. The most important metric is how much it would theoretically cost to rebuild your home, since this eventuality is what the insurance policy is covering. Some other factors that insurance providers look at include:

Location

Aside from the fact that every state has its own premiums, taxes, and laws regulating pricing, the location of your home will also contribute to your premium's costs in other ways. For example, living in more hazardous areas such as hurricane zones, near the coast, or in a densely wooded area can increase your premiums. At the same time, how close you are to assistance services like the fire department or a natural source of water will also be considered within the calculation to your benefit.

Size of your property and home

The larger a property, the more it will cost to repair or rebuild if necessary. So, your premiums are likely to increase along with the square footage of your home. In addition to the size of your home, within this category will also fall questions like how many bedrooms are there in the house, how many bathrooms, and how many floors.

How old your home is

Obviously, the older your home, the higher the premiums will be. Newer homes are less likely to have damages occur.

How long ago was the roof installed and what type of roof it is

Roofs are some of the most frequently filed claims for insurance policies. Naturally, the quality, age, and type of current roofing your home has will factor into the equation.

Whether or not you have a garage (and what type)

Garages are easy entry points for burglars, so expect a more exposed garage structure to cost you more in premiums.

Security systems present

Whether or not you have security systems protecting your home (many insurance providers will offer discounts to homeowners that have security systems built in).

Whether or not you have HVAC systems installed

This is just an added expense in the eyes of an insurance agency.

What type of foundation you have and what type of construction it is

The more stable and the more reliable the structure/construction/foundation of a home, the less you can anticipate paying in premiums for your homeowners insurance.

The materials your home is made of

Brick or masonry homes are more likely to receive lower premiums than wood frame homes because they are stronger and less likely to have issues.

Whether you have hazards within the home

This is generally referring to items like a wood furnace or a wood stove that could cause property damage. It can also refer to outdoor items that are high risk, such as a swimming pool, trampoline, or other equipment.

Anything Else?

In addition to these factors, there are external factors that have nothing to do with the home itself that may affect your overall costs. For example, your credit score could force you to pay a higher premium if you have poor credit. Conversely, if you have good credit, this could work to your advantage. Good credit could reduce your premiums by as much as 91%. If you are renewing a policy, insurance providers will look at your claims history. Have you made a claim in the past? How often? For what and how much? These will also affect your premiums.

Interestingly enough, how often claims were made by other people in your area will also be taken into consideration. This makes sense considering your neighbors are likely to have experienced the same or similar conditions to you and so would be a good point of reference for the likelihood of claims being made on your home in the future.

Finally, pet owners should take note. Some insurance policy providers will not give you coverage if you own certain types of volatile pets. German shepherds, pit bull terriers, rottweilers, and Presa Canarios are a few of the dog breeds that may disqualify you from home insurance coverage.

Average Home Insurance Payments By Area & Property Type

Insurance policies will vary based on all the factors above. Plus, different states and areas will have varying policy pricing. So, it can be difficult to obtain an accurate price comparison across the board. Florida is known to have the highest homeowners insurance rates in the country, while Oregon has the lowest. Oregon citizens can expect to pay on average $574 for their monthly premiums, a delightful 71% less than Florida residents are charged. Here’s a chart showing some of the average monthly premiums you’ll pay per state:

StateAverage Monthly PremiumAverage Annual Payment
California$81$974
Florida$171$2055
DC$96$1151
New York$105$1256
Rhode Island$117$1398
Pennsylvania$74$893
Texas$162$1947
Virginia$79$946
Utah$53$634

Premiums on average policies can start as little as $25 a month, but on average, you can expect to pay anywhere from $35-$95 per month. At the high end of this average, that’s $1131 each year. Not a bad sum to insure your entire home and belongings. For condos, you can expect to pay anywhere from $100 to $400 per year for an insurance policy. And for renter’s insurance, that sum is generally around the $200 range.

Deductibles generally range from $500 to $1000 depending on how much of a policy you have taken out. If money is tight, opt for a higher deductible to lower your monthly premium.

Knowledge is Power

Now that you have a much better understanding of homeowners insurance policies, their pricing structures, and the different factors that are considered when determining your premiums, you are armed with the knowledge that can help you make a good final choice. Read online reviews about reliable insurance providers, use helpful savings tips to minimize the costs, and find the best policy for you.

The Top Home Insurance Providers

HomeInsurance.net

HomeInsurance.net is an insurance policy rates marketplace. What that means is that it connects homeowners directly with home insurance companies or agents to help them compare rates on new insurance policies. While not a direct insurance provider, HomeInsurance.Net can help you compare different price quotes, which may lead to finding the most competitive rates for your new home insurance policy. The service is free, so there’s not much to lose. Read the full review.

HomeInsurance.net HomeInsurance.net View Rates

QuoteWizard

QuoteWizard has an A+ rating from the Better Business Bureau, a good consumer reputation, and fast online application. This online home insurance marketplace helps homeowners find the most desireable deals they can from home insurance agencies in their area. From bodily injury to property damage liability, it may be covered with a QuoteWizard partner policy. Read the full review.

QuoteWizard QuoteWizard View Rates

SaveQuote

SaveQuote is an online insurance aggregator, delivering multiple quotes for local home insurance providers. With an easy-access online platform, SaveQuote helps home insurance consumers find the right policies for their needs and budget, without hassle. Read the full review.

SaveQuote SaveQuote View Rates

Sarah Badani
Written bySarah Badani

Sarah Badani has extensive research and review experience in the finance industry. With a degree in psychology and education, she brings a level of depth and understanding to her writing along with her own flavor to spice up each topic in a unique and inviting way. She writes for BestMoney and enjoys helping readers make sense of the options on the market.‎

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