October 5, 2021

How Much Is Homeowners Insurance?

how much is home insurance

What Is The Average Cost of Home Insurance

One of the most popular searches online for home insurance is the average cost of home insurance and home insurance calculator

The average cost of homeowner's insurance is around $1,350 per year based on a $200,000 home replacement cost- but this number can range drastically depending on various factors. Insurance premiums are determined by the type of home you live in, your location, your deductible, the amount of coverage desired, and how much coverage is already available elsewhere (such as through another insurance policy). One important consideration for many homeowners will be whether they want to insure their property against losses from fire, wind, and flood.

Needless to say, the cost of home insurance is very important to a lot of homeowners.  

We will cover many aspects of homeowner's insurance, how to find the best rates, calculate the cost of home insurance and where to buy affordable home insurance.

How much should homeowners insurance cost per month?

Based on the information above you would be looking at around $100 per month, depending on coverages and liability limits.  

Average cost of home insurance

What is the average cost of homeowners insurance?

Average Home Insurance Cost

The average cost of homeowners insurance can vary depending on the type of construction.  You might be looking at track home - homes built at one time creating entire neighborhoods.  You are essentially picking from 3-6 different styles of the home you want.  Sometimes referred to as cookie cutter homes.  

Track homes are built with standard construction, amenities with contractor grade kitchens, baths, flooring and appliances.  Most homes in America were built in this way and over time owners will upgrade different features or elements of the home.

Then there are semi-custom homes.  These properties come with higher end or upgraded materials and appliances.  Better roofing, larger garages, higher performing HVAC systems.  

Lastly is the fully custom homes.  These are designed specifically for the buyer with the future owner's exact requirement.  These properties might have plaster wall's vs drywall construction, theater rooms, indoor basketball courts, wine tasting room, safe rooms, elevators, etc. 

The cost per square foot for construction can be 2-3 times more with custom features added or upgraded.

The one thing not factored in the replacement cost of any property is land value.  Because there is no coverage for the property or land.  But, location due to potential weather related perils or claims is something that will affect home insurance cost.  

Example - a home in Arizona with mild weather has very minimal weather related claims and as a result the average home insurance cost is substantially lower than a state like Florida or Texas.  Florida and Texas have a much higher potential risk of claims.

Estimated homeowners insurance costs

Try our home insurance calculator with provides an estimated premium based on your size and build quality with NO personal information needed, click here.

calculating homeowners insurance

Homeowners insurance calculator

The average cost of home insurance

Homeowners Insurance can be expensive, but it is a necessity.

No matter how strongly your house is constructed, a natural disaster can easily dismantle your home in a matter of seconds.

When the unthinkable happens, you need to make sure that you’re fully protected with the best home insurance plan.

Here are some simple tips to help you save money and ensure your insurance coverage is sufficient for your needs.

Calculate homeowners insurance cost

1) Do Your Homework: If you plan to build an addition to the home or other structures adjacent to the home, you should consider the materials that will be used.

Typically, wood-framed structures (because they are highly flammable) will cost more to insure. Conversely, cement- or steel-framed structures will cost less because it is less likely to succumb to fire or adverse weather conditions.

Another thing that most homeowners should, but often don't, consider is the insurance costs associated with building a swimming pool. In fact, items such as pools and/or other potentially injurious devices (like trampolines) can drive annual house insurance costs up by 10% or more. This may seem like a small price to pay given the joy these items bring, but is something you should take into consideration.

2) Choose A Higher Deductible: Like health insurance or car insurance, the higher the deductible, the lower the annual home insurance premium. However, the problem with selecting a high deductible is that smaller claims/problems that typically cost only a few hundred dollars to fix, will most likely be absorbed by the homeowner.

3) Alarm Installation: A burglar alarm that is monitored by a central station, or that are tied directly to a local police station, will help lower your annual premium, perhaps by 5% or more. In order to obtain the discount, you must typically provide proof of central monitoring in the form of a bill or a contract to the insurance company.

Smoke alarms are another biggie. While standard in most modern houses, installing them in older homes can save you 10% or more in annual premiums. Of course, even more importantly, in case of fire, they could save your life!

4) Bundle and Save: Many insurance companies offer a Multi-Policy discount of 10% or more to their customers that maintain other insurance policies under the same roof (such as auto or umbrella policies). Talk to your home insurance broker about obtaining a quote for other types of insurance from the same company that provides your home insurance policy. You may end up saving on two annual policy premiums.

5) Pay It Off: Obviously this is easier said than done, but homeowners that pay off their mortgage debts will most likely see their premiums drop. Why? The simple reason is that the insurance company figures that if you own the home outright, you'll take better care of it.

6) Review and Compare: You should review your existing home insurance policy once a year and make a note of any changes that might have occurred that could lower your home insurance premium.

For example, perhaps you disassembled the trampoline, paid off the mortgage, installed a burglar alarm or installed a sophisticated sprinkler system inside your home. If this is the case, simply notifying the insurance company of the change(s) and providing proofs in the form of pictures and/or receipts could significantly lower insurance premiums.

Look for changes in the neighborhood that could reduce rates as well. For example, the installation of a fire hydrant within 100 feet of the home, or the erection of a fire substation within close proximity to the property may lower your annual premium.

Personal property insurance

What Does Home Insurance Cover?

The following are characteristics that all home insurance policies should have:

  • Guaranteed Replacement Value Insurance: All homeowners should buy "guaranteed replacement value" homeowners insurance. This means that their home will be rebuilt in the event of a disaster - no matter what the cost. Of course, many of you may be thinking that this is what would happen anyway, right? Wrong. Because home values have increased substantially in recent years, it probably costs more to build a house than when you originally purchased your home and your insurance policy. The good news is that guaranteed replacement value policies will absorb the increased costs and provide the homeowner with a cushion if construction prices increase.
  • Endorsements: Legally speaking, an endorsement is an amendment to the basic homeowner's policy. Practically speaking, it is a way for homeowners to ensure that their high-priced possessions will be insured in the event of a disaster. For example, a woman wanting to insure her diamond engagement ring would obtain an endorsement to her homeowners' policy in order to prove not only that she owned the ring, but also its value. She would do this by obtaining a formal appraisal of the ring from a jeweler, and then sending the appraisal to the insurance carrier for special notation on the insurance contract. Formal endorsements such as these will help in the claims process and ensure that the homeowner gets the full dollar value of the item if it is lost, stolen or damaged in a disaster. Typical items that are endorsed in addition to jewelry include furs, antiques and collectibles.
Personal Property Insurance

Personal Property Insurance

To avoid any discrepancies and any delays in receiving your insurance money for your home, make sure you document everything.

Photograph and videotape the entire contents of your home and the home itself.

Then store these photos and videotapes in a fireproof box. In addition, consider storing a copy of the photos at a relative's house, in a safety deposit box or upload to a cloud storage.

Doing this will help homeowners compile an inventory of their possessions (which is what the insurance company will demand) after a disaster. It will also, by extension, dramatically shorten the length of the claims process if a disaster does occur.

Homeowners insurance is a necessity.

There are ways to save money, but there are also some features that homeowners shouldn't skimp on. Make sure you’re prepared for life’s unexpected surprises.  Talk with your insurance professional to review your insurance needs and don't forget about special coverage's needed for high value sports equipment like golf clubs and bikes.  

Additionally, if you are a collector of art, stamps, guns or other high value items a normal home insurance policy will have certain coverage limits. Make sure to discuss these items to ensure proper protection.

California Home Insurance

How much homeowners insurance do I need

Great question.

All home insurance companies have their own replacement calculator based on the size of the home, number of bathrooms, number of garages, any detached building, quality of construction, if the property has a based and what percentage is finished, age of home, construction material used to build the home, type of roof and if there are any fireplaces, just to name a few items. 

You'll also want to look at liability insurance.  Most every home insurance companies will automatically come with $100,000 of liability insurance, but they may not be enough, especially if you have pets, swimming pool or a trampoline.

Injuries can be very expensive and lawsuits can and will happen.  Legal bills alone can exceed $100,000 so we recommend a minimum of $300,000, which is maybe $50 to $100 more a year.  

Additionally, you might want to consider an umbrella policy with coverage starting at $1,000,000 and going up from there.  The umbrella or excess liability coverage gives the additional protection that may not be covered under your home insurance policy.

Home Insurance Calculator

Get an estimated cost of home insurance with NO personal information needed.  Fast, easy and convenient way to find the average cost of home insurance.

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John Espenschied is a long-time veteran of the insurance industry. He's worked with thousands of clients over the years, helping to protect their personal and business needs. John's goal is to provide the best advice possible to assist customers in saving money while protecting their property and securing their financial future.
He truly enjoys helping others and takes great satisfaction in providing top-notch customer service. When he's not working, John has fun spending time with his family, golfing, bike riding, and blogging on insurance topics.