How Much Is Homeowners Insurance?

Several factors determine homeowners insurance cost.

Even if you live in a safe neighborhood and your home was built with the sturdiest of materials, you’ll still need homeowners insurance coverage to protect your property. Many first-time homebuyers don’t realize that homeowners insurance is usually required when applying for a mortgage. They’re left asking, “How much does homeowners insurance cost?”

Here’s a closer look at the cost of homeowners insurance.

How Much Does Homeowners Insurance Cost?

Before you ask an insurance company for a homeowners insurance quote or a homeowners insurance estimate, you might be wondering, “What is homeowners insurance, anyway?”

Homeowners insurance coverage is a policy that protects your property against certain situations that might cause the loss, destruction or damage of your home. Different insurance companies offer various types of plans based on potential threats or damage to the property that are common in your area.

As a result, homeowners insurance rates can vary significantly by property and location. The average cost of homeowners insurance in the U.S. is about $1,132 per year as of 2017. The typical deductible for a standard homeowners insurance policy can range anywhere from $500 to $1,500. If your property ends up suffering damage from severe weather conditions such as a hail storm or a hurricane, you would be responsible for paying up to 10 percent of your home’s insured value when you file the claim, depending on the state where your property is located.

Find Out How Your State Compares: Average Cost of Homeowners Insurance in Every State

What Does Homeowners Insurance Cover?

The best homeowners insurance policies provide enough coverage to manage the expenses of any type of destructive event, such as a fire or another catastrophe. Many policies also provide liability coverage. Liability coverage includes damage to the property as well as injury or property damage to others caused by you or your family members.

A homeowners insurance policy will typically cover:

  • Structural damage to the home
  • Damage to detached structures, such as garages or a gazebo
  • Personal belongings destroyed inside the home
  • Trees, plants and shrubs
  • Rent you would have received from tenants if your home wasn’t destroyed

If you end up having to live away from home because it’s been excessively damaged by an insured disaster, your homeowners insurance will also typically cover the additional living expenses you incur.

Although homeowners insurance covers almost all types of damage related to disasters, you’ll need a separate policy for flood coverage or to insure your property in the event of an earthquake. These additional policies are required in some states. For example, homeowners in Florida with a federally backed mortgage are required by federal law to have flood insurance if their community is part of the National Flood Insurance Program. You might also have to purchase additional coverage if you want to insure more expensive items stored in your home, such as artwork, jewelry or collectibles.

Damage caused by a lack of maintenance of the home won’t be covered by homeowners insurance. You should make appropriate investments and take care of your property to ward off excess and uninsured damage.

Related: Here’s Why It Costs $1,204 a Month to Maintain the Average Home

Factors That Determine Homeowners Insurance Rates

Homeowners insurance companies calculate premiums based on several factors, including:

  • Structure and characteristics of the home
  • Location
  • Smoking or non-smoking home
  • Safety and security features installed on the property
  • Homeowner’s credit history
  • Homeowner’s claims history

How to Obtain Homeowners Insurance

You can get cheap homeowners insurance plans and choose from a variety of homeowners insurance coverage options through an insurance provider. Some of the best homeowners insurance companies have attentive and courteous agents on staff to help make it easier to file claims and to provide timely payment. You might have to do some research to compare reviews and ratings to find the best home insurers in your state.

You can request a quote or estimate after you’ve found a few insurance companies you think you might want to work with. You should review all exclusions and terms of coverage to ensure you’re getting exactly the coverage you need for your property.

Avoid These: Dumb Mistakes People Make When Buying Insurance

Homeowners insurance is usually mandatory when you’re getting a home mortgage, but it might be optional if you bought a home without financing and you, therefore, own the property outright. These insurance policies provide ample coverage in the event your property is severely damaged by almost any cause, including natural disasters. Some homeowners might need to purchase additional coverage if they live in a high-risk area such as a flood zone or a region that’s prone to other natural disasters. Having this type of overage can protect your finances when your home is severely damaged.