Posted by: Kimberlee Leonard Comments: 0 0 Post Date: March 1, 2021

The only way to know exactly how much home insurance will cost is to get a quote for your home. Home insurance premiums are determined by a variety of factors that cause rates to vary widely from state to state and house to house. 

For a home with a dwelling value between $200,000 and $299,999 with basic liability and default personal property coverage, the national average in 2020 for homeowners insurance was $1,114 annually. 

Factors That Affect Homeowners Rates

There are no standard homeowners rates across the U.S. Every insurance carrier applies for rates with each state’s insurance commissioner. Even then, the rates will vary depending on zip code and the known hazards in the area. This means two identical houses blocks apart could have different rates based on changing a zip code. 

Other factors that affect your insurance rate include:

  • Age of your home
  • Square footage
  • Design of home
  • Type of roof
  • Building materials and upgrades of home
  • Claims history
  • Credit history (not in all states)
  • Amount of personal property insured
  • Amount of liability coverage selected

Most insurance carriers are able to pull the basic data about your home from public records if you don’t have that information. They will ask for some personal details to run your claims and credit history as it pertains to the policy. 

Average Annual Premium By State

Some states are more expensive when it comes to insurance than others. You can get an idea of where your premium might lie based on the averages below compiled from data from S&P Global Market Intelligence. 

State Average Annual Premium
Alabama $1,116
Alaska $1,002
Arizona $966
Arkansas $1,091
California $966
Colorado $994
Connecticut $1,058
Delaware $1,172
District of Columbia $1,047
Florida $1,117
Georgia $1,137
Hawaii $977
Idaho $966
Illinois $924
Indiana $906
Iowa $918
Kansas $908
Louisiana $1,108
Maiine $989
Maryland $1,212
Massachusetts $1,031
Michigan $919
Minnesota $951
Mississippi $1,099
Missouri $897
Montana $948
Nebraska $907
Nevada $933
New Hampshire $1,049
New Jersey $1,052
New Mexico $949
New York $952
North Carolina $1,118
North Dakota $906
Ohio $895
Oklahoma $1,114
Oregon $950
Pennsylvania $1,003
Rhode Island $982
South Carolina $1,126
South Dakota $898
Tenessee $1,118
Texas $1,140
Utah $1,025
Vermont  $1,004
Virginia $1,181
Washington $986
West Virginia $1,101
Wisconsin $903
Wyoming $966

What Causes Rates to Go Up?

Those who have lived in the same home for years know that their home insurance rates are not constant. Your rates can go up for a number of reasons.

Rate increases happen as the result of:

  • Claims history: Having more claims increases your rate
  • Credit profile: A change in your credit could negatively impact rates
  • Area claims: If your insurer has a higher-number of claims in the area, the region could be reassessed as a higher risk zone
  • Increased coverage: Your home dwelling replacement value is reassessed annually and higher values lead to higher rates

While it is true that homeowners rarely see a decrease in premiums, it is possible. This happens when the insurance company experiences a rate cut approved by the insurance commissioner. 

How To Save on Home Insurance Costs

There are ways that homeowners can look to save money on homeowners insurance. Ask your insurance carriers about:

  • Safety discounts (fire extinguishers, storm shutters, etc.)
  • Security features (home alarms, deadbolt locks, etc.)
  • Updating your policy when you put a new roof on
  • Bundled discounts (home or life insurance)

You can also reduce premiums by raising your deductible. The deductible is what you agree to pay during a covered loss. It’s your portion of the costs to rebuild or replace things. The higher your deductible, the lower your premium. Just be certain that you can afford the deductible you choose as you don’t want to be unable to complete a claim because you didn’t have the funds to pay your portion. 

Improving your claims history and credit score will also help reduce the cost of insurance for homeowners. In general, we recommend handling small claims on your own to prevent losing claims-free discounts or being charged more for frequent claims. To improve your credit, pay bills on time and reduce the amount of debt that you have. 

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