The average cost of home insurance is about $2,777 per year, according to a 2022 analysis by insurance.com. Many factors influence the cost of homeowners insurance; They include location, age, size of home, claim history, and cost of building materials.
Reading: What does property insurance cost
While the average cost of home insurance in your area can give you an idea of what to expect, homeowners insurance rates are specific to each home. You can save by comparing homeowners insurance quotes, taking steps to reduce risks in your home, and looking for discounts.
It’s important to make sure your home insurance meets your needs, including understanding replacement cost and optional coverage. You don’t want to overpay, but you also don’t want your home to be underinsured. Next, we’ll look at the average cost of a homeowners policy and what affects rates.
how much does home insurance cost?
The average cost of home insurance in 2022 is $2,777 nationwide, according to data from insurance.com. however, it varies by state. Using our home insurance calculator below, you can compare average home insurance rates by zip code for 10 different coverage levels. enter your ZIP code, then select a homeowners coverage amount, deductible, and liability amounts. The Annual Home Insurance Calculator will show you the average cost of homeowners insurance for your neighborhood and your desired policy limits.
Next, we’ll dive into what you need to know to choose the right coverage. That information can be used with our calculator below to give you an idea of what you can expect to pay for your home insurance.
average cost of home insurance by zip code
The highest homeowners insurance rates are in the 77471 zip code, Rosenberg, Texas. That’s based on insurance.com’s 2022 analysis of the average cost of home insurance for nearly every ZIP code in the country.
Weatherford, Oklahoma, and Hubert, North Carolina ZIP Codes rank second and third, respectively, for the following coverage:
- $300,000 in homeowners coverage
- $1,000 deductible
- $300,000 liability coverage
- other structures – 10%
- personal property – 50% (you choose replacement value or actual cash value)
- loss of use – 20%
- upgrade at a higher or guaranteed replacement cost
- update personal property coverage at replacement cost
- water and sewage support
- additional clauses on high-value items, such as jewelry and works of art
- few major weather-related losses.
- a low crime rate.
- relatively few major liability claims.
- many well-organized neighborhood watch groups.
- combine auto and home insurance to save more
- look for a better deal
- increase deductibles
- eliminate hazards like home trampolines
- maintain a good credit score
- location. The location of your home allows the insurance company to look at risk factors in that area.
- the value of your home. Please note that insurance value is not the same as market value.
- cost of reconstruction. the cost to rebuild your home if it were completely destroyed.
- construction costs. local construction costs, including the availability and price of building materials, and building regulations, among other factors.
- the age of your house. older homes may have more risks, such as outdated wiring.
- risk exposure. risk exposure on your property, for example, from a swimming pool, trampoline, guest house, or aggressive breed of dog.
- fire protection. your neighborhood’s fire protection rating or how close your home is to a fire station.
- claim history. your personal and neighborhood claim history, as well as the previous owner’s claim history
- insurance score. your insurance score is based, in part, on your credit score (only three states don’t allow it: massachusetts, hawaii, and california; maryland doesn’t use credit for home rates, but does for car rates)
We identified the zip code with the highest average home insurance rate in each state, as well as the zip code with the cheapest average home insurance rate. take a look at the most and least expensive zip codes in the us uu. below.
The 10 most expensive locations by zip code based on 2022 data are:
The top 10 least expensive locations for home insurance are:
how much does homeowners insurance cost per month?
On average, home insurance costs about $231 per month. Homeowners insurance premiums vary based on factors such as where you live, the value of your home, and coverage levels.
This is the monthly homeowners insurance amount for common coverage levels:
how much does home insurance cost by level of coverage?
The average cost of homeowners insurance varies depending on the amount of coverage needed. for a home with $300,000 in homeowners coverage and the same amount of liability coverage, the average rate is $2,777 in 2022.
The premium for your home insurance policy is determined by several factors. Where you live and the type of natural disasters or events that are common in your area can have an impact on how much you pay for coverage each year. Some areas are more at risk from natural disasters, such as hurricanes or tornadoes, which means a higher risk of filing a claim. other factors are more specific to the house itself.
These are the national average annual costs in 2022 for homeowners insurance at common coverage levels, all with a $1,000 deductible:
how to get a home insurance quote
There are many variables to consider when building a homeowners insurance quote, and we’ll break it down into a few easy steps.
Step 1: Calculate how much homeowners coverage you need
Step 2: Decide how much homeowner liability (and medical payments) you need
Step 3: Choose additional coverage options
Step 4: Choose a deductible
Your coverage limits for the following are typically a set percentage of your home coverage limit, as shown below:
So how are coverage amounts and additional coverage decided? we will explain it next.
Step 1: Calculate how much homeowners coverage you need
Your homeowners coverage must be equal to the cost of repairing the damage to your home or completely rebuilding it to the same quality, at current prices. this is called the replacement cost. Figuring out how to calculate home replacement cost can be a challenging task, but it can be done by taking a complete inventory of the building materials used for your home, using online calculators, or you can hire an appraiser to do it for you. .
When purchasing homeowners insurance, you should obtain enough homeowners coverage to equal the full replacement cost of your home.
Step 2: Decide How Much Homeowner Liability (and Medical Payments) You Need
Most home insurance policies come with $100,000 in personal liability insurance, but this coverage is rarely enough. the cost of defending a lawsuit or paying medical bills for a serious injury can easily exceed that amount. most experts recommend increasing your limits to at least $300,000.
Liability insurance pays when you or a family member are legally responsible for the injuries or property damage of others. Personal liability also covers legal fees if you are sued, as well as judgments resulting from a lawsuit, up to your policy limits.
Medical payments coverage pays for injuries to guests in your home, regardless of fault. Medical payments differ from liability insurance in significant ways, primarily in that it is for minor incidents and has very low limits of $1,000 or $5,000. the last amount of $5,000 is recommended.
Step 3 – Choose Additional Coverage Options
With the basics in place, you can see the options available from the insurance company. Common add-ons and home insurance endorsements that you may want to consider are:
some companies offer upgrade packages that include the most popular options for a price.
step 4: choose a deductible
The deductible is your share of the repair cost when you file a claim. Your home insurance premium will be lower if you choose a high deductible. If you have a $500 deductible, you will pay more in your premiums than if you have a $2,000 deductible.
Opting for a higher deductible will save you money. it will also mean you will pay more out of pocket if there is a claim. That’s why it’s important to know and be comfortable with the trade-off you’re making when choosing a home insurance deductible.
don’t forget about supplemental coverage
Standard home insurance policies do not cover damage from floods or earthquakes. therefore, you should consider the cost of flood and earthquake insurance when calculating a home insurance quote.
Your lender may require you to carry any of these if you live in a high-risk area.
compare homeowners insurance quotes from at least three companies
Once you’ve determined how much coverage you need, compare home insurance quotes from at least three companies to see who has the lowest rate. this will give you an estimate of your home insurance costs.
why rates are so low in some areas
Hawaii ZIP Code 96813 has the lowest average cost of homeowners insurance in the nation, but dozens of other Hawaii ZIP Codes are also among the cheapest in the country. So why does Hawaii have such low home insurance rates? Standard homeowners policies in Hawaii may not absorb the high costs of hurricane damage claims.
“An important factor in Hawaii is the fact that most standard homeowners insurance policies do not cover hurricane damage. Hurricane Iniki, which struck in 1992, caused so much damage that most insurers excluded hurricane damage from their coverage. homeowners in hawaii now have to purchase a separate hurricane damage policy,” says michael barry, spokesman for the insurance information institute.
Barry also points out Hawaii’s underwriting laws, which prohibit the use of credit scores. “Hawaii’s failure to take credit scores into account could also be a factor,” she says, “but it probably has a bigger impact on auto insurance rates than it does on homeowners’ premiums.” /p>
other places on the cheapest list are low compared to the rest of the country, in part due to the following factors:
barry agrees, saying, in general, “neighborhood watches are a factor that insurers would consider and can impact rates. These groups help prevent vandalism and theft, leading to fewer claims and lower fees.”
He says that rural areas and sparsely populated cities tend to have lower home insurance rates. That’s because the cost of rebuilding tends to be more affordable, and insurers take that into account when setting rates.
“The factors that tend to lower rates are often the opposite of the factors that increase rates,” says Barry. “The low probability of natural disasters, the smaller population and lower construction costs will have a positive impact on homeowners insurance rates.”
The ability of an area to successfully fight fires can also affect rates. Well-located fire stations with professional firefighters on staff improve a city’s rating and can lower insurance costs in the long run, according to Barry.
why home insurance rates are so high in some areas
It’s probably not surprising that many of the most expensive zip codes for home insurance are in states that experience a lot of severe weather. The most expensive zippers in Louisiana, Mississippi, Alabama, Texas, South Carolina, and Massachusetts are coastal areas prone to catastrophic storms that are costly to insurers, who then pass that cost on to homeowners. Texas, Kansas, Oklahoma, Florida, Alabama, and Mississippi also have many tornadoes. Naturally, the more claims insurers pay for wind, hail, and flood damage, the higher home insurance rates will be for everyone.
“homeowners rates are based on actual and anticipated losses statewide, so if a state is prone to natural disasters, it will increase the cost of insurance for everyone in the state,” says barry . “It will have the greatest impact in areas where natural disasters tend to occur most often, for example, coastal areas.”
ways to reduce the cost of homeowners insurance
The cost of homeowners insurance can vary based on your location and other factors, such as age and claims history. Fortunately, there are many ways to lower the cost of home insurance. Here are some tips you may find helpful in lowering the cost of homeowners insurance:
Remember, you can lower your rate by making sure you receive all the home insurance discounts you qualify for. for example, buying your home insurance from the same company that covers your cars, known as a bundle, can save you an average of 19%, and discounts on building materials and new homes can also significantly lower your premium. /p>
best home insurance companies
With every type of insurance coverage, it’s true that the cheapest policy isn’t always the smartest choice. you want an insurance company that is financially healthy and has a good reputation for service.
insurance.com’s ranking provides a detailed look at the best home insurance companies in 2022, based on a number of factors. insurance.com ranked the top insurance companies by median price, j.d. power rating, best rated a.m. and the number of discounts offered. here are the results of that analysis.
Of course, the best homeowners insurance company for you will depend on personal factors. That’s why it’s best to compare policies and quotes for your specific needs before choosing a company.
how to calculate homeowners insurance
Before you get a homeowners insurance quote, you need to know what your rates will be based on. Home insurance companies use many factors to calculate your home insurance rate. rates can fluctuate significantly from state to state, or even neighborhood to neighborhood, depending on local differences in those factors. The main factors that influence the cost of homeowners insurance are:
To learn more about how home insurance rates are determined, review some of the top factors that affect home insurance rates. You can also use the home insurance calculator below to see the average rates in your neighborhood.
insurance.com compared 2022 homeowners insurance rates provided by quadrant data solutions for home coverage ranging from $200,000 to $600,000 with $100,000 and $300,000 liability limits and a $1,000 deductible for all insurance. ZIP codes available. ZIP codes were ranked by median rates for homeowners coverage of $300,000, liability coverage of $300,000, and a deductible of $1,000.