Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: Aug 24, 2021

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Based on recent numbers the average cost of home insurance is just above $800 per year, nationwide. This means it is significantly higher in some states and significantly lower in others. Read the factors that make the difference and more specific figures in the article that follows.

It is hard to put a figure on the average cost of home insurance. There are so many varying factors that come into play when determining the final cost of a home insurance policy. Of course, most people are looking for ways to save on home insurance, but skimping on coverage is not an option.

Protecting the value of your home and the investment you have made may require going above and beyond the average cost of a home insurance policy.

Why settle for just average home insurance premiums? To find better than average homeowners insurance rates then be sure to enter your zip code into the free tool to compare free insurance rates!

What factors determine the cost of homeowners insurance?

To understand the average cost of homeowners insurance, you first need to consider the factors affecting home insurance rates. The first determining factor is the amount of coverage you purchase. You need to purchase not just enough to cover your current home, but to cover the cost of replacing your home, if it is destroyed. These two numbers may be quite different. The more you insure your home for the more the insurance will cost but the more likely it will be that you can replace your home.

The next determining factor is the type of coverage you actually get for your home. You can get a basic policy which covers personal liability and property damage. This will include paying for an injury to someone on your property, damage from natural events, theft, or vandalism. It will also cover damage from fire, smoke, or water used to put out a fire.

A basic policy will not cover hurricanes, certain breeds of dog, or floods. You will need to add these if necessary which will make your policy cost increase quite a bit. This can be done by adding a rider to your policy. Along with this goes your choice of deductible. The higher your deductible, the lower your monthly payments. However, make sure it is a deductible amount that you can afford.

Homeowners insurance companies will also look at your credit score when assigning rates, as this is part of your general risk profile.

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Does it matter where you live?

Another factor in determining the price of a home insurance policy is property type. This will be determined by asking the following questions: What type of home are you insuring? How old is the home? Where is it located? What is the neighborhood like? What is the crime rate in the area? The answers to these questions and other questions like this will be asked by your insurance company and will help determine your rate.

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What other factors affect homeowners insurance costs?

Home insurance rates are also affected by overall construction costs in an area. The lower the rates, the lower your insurance rates will be as well. Also taken into consideration is the weather in the area you live. Is it a flood zone, prone to hurricanes, or known for tornadoes? If so, your rate will increase based on the statistics for the previous years weather and special riders will need to be added to a traditional insurance policy.

Lastly, the safety of your home, or lack there or, will have an affect on your rates. If you have an alarm system, deadbolts, fire extinguishers, motion sensor lights, safety lock windows or other safety features, your rates will go down. If not, they will be higher. Also how close you live to a fire department and police department will affect your rates.

What is the average cost of a homeowners insurance policy in 2021?

When all the determining factors of home insurance are taken into consideration along with trends in the real estate industry, a national average on home insurance rates can be determined. The national average as of 2021 is $1,312 per single family home, per year. Though this was the national average, homeowners insurance can cost significantly less or significantly more, depending on where exactly you live.

Hawaii has some of the lowest average premiums in the U.S., at $376 per year, whereas Oklahoma residents are currently paying an average annual premium of $3,519. That’s a pretty big difference.

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What does homeowners insurance cover?

There are different types of coverage available for a homeowners insurance policy depending on the insurance provider you choose. However, we will go over standard coverages you will find on most homeowners policies.

  • Dwelling coverage – This is what covers your house itself. Usually, this will include damage from fire, smoke, lightning, wind, hail, vandalism, and more.
  • Other structures coverage — This covers any additional structures on your property, such as garages and sheds.
  • Personal property coverage – Personal property coverage protects the items in your home. It will pay the replacement costs for stolen stereo equipment, for instance, or art destroyed in a fire.
  • Liability coverage – Liability insurance covers damages incurred by other people. If someone gets hurt on your property, liability will pay for their medical expenses.

There are usually additional coverage options available such as medical payments coverage and additional living expenses coverage as well.

In some cases, you may require a separate flood insurance policy in order for flood damage to be covered. The same goes for damage from hurricanes. Talk to your homeowners insurance company about what perils are and are not covered under your policy.

How do you find the best homeowners insurance rates?

Finding a good homeowners insurance policy is based on more than just cost. Finding an insurance company that you can trust and that has a reputation for fulfilling its claims is important as well. You might also be able to find companies that offer homeowners insurance discounts. Many insurers offer a multi-policy discount, for instance, if you bundle your homeowners policy with your auto policy.

Using an online comparison tool will allow you to look at what many different companies have to offer as well as see their rates. An online comparison tool will save you time and help you choose the right company.

Enter your zip below to compare free home insurance quotes online now!