Homeowners insurance provides financial protection for your home and its contents. It can cover damages caused by natural disasters, theft and other unexpected events. Finding the best priced homeowners insurance can be a daunting task, but with the right information and research, you can make an informed decision that meets your needs and budget.
Factors that Affect Homeowners Insurance Cost
Before we dive into how to find the best priced homeowners insurance, it’s important to understand the factors that affect the cost of your policy. These include:
Factors |
Description |
|---|---|
Location |
Where you live affects the risk of damage to your home, such as from hurricanes, tornadoes, or earthquakes. |
Age and condition of home |
Newer homes and homes that have been well-maintained typically cost less to insure because they are less likely to experience major damage. |
Coverage amount |
The more coverage you have, the higher your premium will be. |
Deductible |
The amount you pay out of pocket before insurance kicks in also affects your premium. |
Claims history |
If you’ve filed claims in the past, your premium may be higher. |
Credit score |
In some states, your credit score can impact your premium. |
Location
Location is the most important factor that affects your homeowners insurance cost. Some areas are prone to natural disasters that can cause significant damage to homes. For example, if you live in a coastal area that is prone to hurricanes, you’ll pay more for insurance than if you live in an inland area with less risk of natural disasters.
Additionally, some states have higher insurance rates overall. For example, Florida, Texas and Louisiana typically have higher rates due to their high risk of hurricanes and floods.
Age and Condition of Home
Newer homes and those that have been well-maintained are less likely to experience major damage, which means they cost less to insure. On the other hand, an older home that is in poor condition may have a higher insurance cost due to the increased risk of damage.
It’s important to note that some insurance companies will not insure homes that are over a certain age, typically 50 years old or more. If you own an older home, be sure to check with your insurance company to see if they have any restrictions on insuring it.
Coverage Amount
Your coverage amount is the maximum amount your insurance policy will pay out if your home is damaged or destroyed. The higher your coverage amount, the higher your premium will be. However, it’s important to make sure you have enough coverage to fully protect your home and its contents.
When determining your coverage amount, consider the cost to rebuild your home, the value of your personal property, and any other expenses you may incur, such as temporary housing while your home is being repaired.
Deductible
Your deductible is the amount you must pay out of pocket before your insurance coverage kicks in. The higher your deductible, the lower your premium will be.
Choosing a higher deductible can be a good option if you have a healthy emergency fund and don’t mind paying more out of pocket if something happens to your home. However, if you choose a high deductible and then can’t afford to pay it if something happens, you could end up without coverage.
Claims History
If you’ve filed claims in the past, you may pay a higher premium for your homeowners insurance. This is because insurance companies view customers who have filed claims as higher risk.
To keep your premium lower, try to avoid filing claims for small damages that you can afford to pay for out of pocket. However, if you have a major loss, such as damage from a natural disaster, don’t hesitate to file a claim.
Credit Score
In some states, your credit score can impact your homeowners insurance premium. Insurance companies view customers with higher credit scores as lower risk, so they may offer lower premiums to those with good credit.
To improve your credit score, make sure you pay your bills on time, keep your credit card balances low and don’t apply for a lot of new credit at once.
How to Find the Best Priced Homeowners Insurance
Now that you understand the factors that affect the cost of homeowners insurance, it’s time to start shopping around for the best priced policy. Here are some tips to help you find a policy that meets your needs and budget:
Compare Quotes from Multiple Companies
The best way to find the best priced homeowners insurance is to shop around and compare quotes from multiple companies. Be sure to compare policies with the same coverage amounts and deductibles so you can make an apples-to-apples comparison.
You can easily compare quotes online by entering your information into insurance comparison websites. Some popular comparison websites include:
- Insurance.com
- Compare.com
- TheZebra.com
- Policygenius.com
Bundle Your Homeowners Insurance with Other Policies
Many insurance companies offer discounts if you bundle your homeowners insurance with other policies, such as auto or life insurance. This can be a great way to save money on all of your insurance needs.
Increase Your Deductible
As mentioned earlier, increasing your deductible can lower your premium. Consider raising your deductible to $1,000 or more to see significant savings on your homeowners insurance.
Ask for Discounts
Don’t be afraid to ask your insurance company about discounts you may be eligible for. Some common discounts include:
- Multi-policy discount for bundling your homeowners insurance with other policies
- Loyalty discount for staying with the same insurance company for several years
- New customer discount for switching to a new insurance company
- Security system discount for installing a home security system
FAQs
What is the average cost of homeowners insurance?
The average cost of homeowners insurance in the US is $1,192 per year, according to the National Association of Insurance Commissioners. However, your individual cost will depend on factors such as location, age and condition of home, coverage amount and deductible.
Do I need homeowners insurance?
While homeowners insurance is not required by law, it’s a good idea to have it to protect your home and its contents. Without insurance, you would be responsible for paying out of pocket for any damages or losses.
What does homeowners insurance cover?
Homeowners insurance typically covers damage caused by natural disasters, such as hurricanes or tornadoes, as well as theft and liability claims. You can also add additional coverage for things like floods, earthquakes, and high-value personal property.
How much coverage do I need?
The amount of coverage you need will depend on factors such as the cost to rebuild your home, the value of your personal property, and any other expenses you may incur, such as temporary housing while your home is being repaired. Work with your insurance company to determine the right coverage amount for your needs.
How often should I review my homeowners insurance policy?
You should review your homeowners insurance policy at least once a year to make sure it still meets your needs and budget. You may need to adjust your coverage amounts or deductible if your circumstances have changed.
By understanding the factors that affect the cost of homeowners insurance, comparing quotes from multiple companies, and taking advantage of discounts, you can find the best priced homeowners insurance policy that fits your needs and budget.