Average Home Insurance Cost
Home insurance is a type of insurance meant to protect a homeowner from losing their home and possession due to calamity. There are many ways through which one could lose their home or the property therein. Some of these include natural disasters such as floods and earthquakes. Theft can also cause one to lose property. Because there is no telling when disaster will strike, it is important that you have a home owner insurance policy. It will make it much easier to bounce back from unexpected calamities and disasters. If you are mortgaging a house, the lender may also make it mandatory for you to have an insurance policy as a means of protecting themselves from risk. The Average Insurance Cost There are countless factors that determine how much money you need to pay as insurance. This makes it extremely difficult to estimate just how much you will be required to pay monthly or annually as insurance. This however does not necessarily mean that you have to approach any insurance agency blindly in the hope that they will charge you the fairest rates for your home insurance.
What is the Average House Insurance Cost in the US?
The average home insurance cost in the United States ranges from between $ 500 and $ 1000, although you can find insurers who charge far less or more than that. Alternatively, you can calculate the possible cost of insuring your home based on the value of the home. To do this, you need to take the value of the home, divide it by 1000 and then multiply the resulting number by $3.50. This should give you a rough estimate of what to expect when you visit an insurance company.
Factors That Determine the Cost of Insurance
Location – The most important factor that determines how much you will pay as home insurance is the location of the home. Location determines a lot about the safety of your home. There are places in the country that are more prone to disasters than others, and this definitely reflects in the cost of insurance. Places like Mississippi, Florida and Louisiana have the priciest insurance rates because they are prone to hurricanes that go all the way to the Gulf of Mexico. Oklahoma is also considered a high risk state owing majorly to the fact that many tornadoes occur here. Homeowners in places that are considered low risk areas however enjoy far lower insurance costs.
Insurance Policies – The kind of policy you choose also has a direct impact on the amount of money you have to pay as insurance. Different policies cover different kinds of risks, and this is what makes all the difference. Generally however, most policies cover such things as water damage, theft, wind and fire damage. If you live in an area where a certain kind of risk is particularly common, say if you live in California where earthquakes are a common phenomenon, you might have to seek separate policies that cover that specific kind of risk.
Personal protection – There are steps that you can take to protect your house from damage that could also lower the cost of your home’s insurance. If for instance you have a security alarm system in your house, insurers might charge you less than if you didn’t as that might make it harder for robbers to rob you of property. The same is also true for when you have a fire alarm, as it might also mitigate the damages that could result in the event of fire. If you also renovate your house to prevent some other type of damage, say if you replace your roof or install storm shutters, this could directly impact the cost of insuring your home.
State – You will be shocked to learn how greatly the rates of home insurance vary by state. Every state has its own annual home insurance rates which are informed by a wide array of factors. The most significant factor that determines the rates of each state is the danger that nature poses to a given area. Just like with location, states that have a high likelihood of experiencing a natural disaster of some kind, be it a hurricane, earthquake or tornado also have high home insurance costs.
Lenders – If you are mortgaging a house, the terms of the mortgage can also determine how much you pay as home insurance. There are certain lenders who require that you pay annual insurance for the first year at once before finishing mortgaging settlements. Others may require that you pay the insurance in monthly installments.
How to Choose an Insurer
Choose a Reliable Insurer It is imperative that you choose a credible and reliable insurer. Given the nature of their job, you certainly want to choose an insurer who will not let you down when you need them the most. In order to ensure that you choose the best insurer, first read various reviews written about them. This is about the easiest way to determine how reliable and decent a given insurance company is.
Price Matters Another factor that you must consider is the amount of money you have to pay periodically to your insurance company. You should settle on a company that charges fair prices, which are neither exorbitantly high nor ridiculously low. The best way to determine what is fair is to ask for many quotes, and then decide for yourself what ranks as the average price.
Although it is not easy to predict just how much you will be charged as home insurance whether monthly or annually, you can be able to draw up a rough estimate. The factors that determine how much you will pay for home insurance include such things as your location, your state, your lender and measures that you take to protect your home. Generally, if you buy a house in an area that is prone to many natural disasters, chances are, your insurance rates will be high. Before you settle on any insurance company, take your time to consider all the options that are open to you. You want to settle on an insurer who has your best interests at heart, and one who you can rely on. Do not settle until you have found such an insurer.