The Average Cost of Homeowner Insurance. Are You Paying Too Much?

07 Apr
Young adults looking for more affordable homeowners insurance rates online.

Did you know that premiums jumped up 7.6 percent in 2011 and another 5.7 percent in 2012. This translates into a $137 bump in just two years.

In the last couple of years the cost of homeowners insurance has been going up for just about everyone. The National Association of Insurance Commissioners (NAIC) found that nationwide, premiums jumped up 7.6 percent in 2011 and another 5.7 percent in 2012. This translates into a $137 bump in just two years.

Where You Live

Where you decide to call home can have a big effect on your rates. The study by the NAIC broke out average costs by state. The top five most expensive states for homeowners insurance were:

  1. Florida -$2,084
  2. Louisiana -$1,742
  3. Texas – $1,661
  4. Oklahoma – $1,501
  5. Mississippi – $1,314

Your annual homeowners bill will be much lower if you decide to live in one of these states:

  • Idaho – $538
  • Oregon – $567
  • Utah – $580
  • Wisconsin -$631
  • Washington – $648

Rates are affected by a large number of factors, but natural disasters tend to be a big one. Living in a state that is prone to hurricanes, tornados, floods or earthquakes will quickly push up your premium.

What Can You Do?

Luckily, there are a few things you can do to help keep your homeowners cost in line. While moving to a low cost state is one of the best ways to bring your insurance cost down, not everyone wants to live in Oregon. Here are a few tips that will keep your premium affordable.

Shop Around

Most experts agree that shopping your coverage is the absolute best way to save money on homeowners insurance. Insurance companies rate risk differently which can lead to a huge difference in premiums. Experts recommend shopping your coverage once a year and getting quotes from at least five different insurers.

We can help with this, fill out our easy request form and all of our insurance partners will quickly send you up to 12 quotes and our experienced staff will help you review all your coverage options and any discounts that may be available to you.

When comparing insurers be sure you are comparing apples to apples when it comes to coverage levels and deductibles.

Raise Your Deductible

Raising your deductible from $500 to $1,000 or even higher will have a dramatic effect on your premium. In some cases the savings will be 25 percent or higher. Keep in mind that if you do need to file a claim, that deductible will have to be covered. Consider setting aside your deductible amount in a savings account 

Bundle It Up

Keeping all of your insurance (home, auto, life etc.) with one insurance company can result in a bundling discount. Bundling is one of the biggest discounts that most insurers offer and can result in savings of at least 25 percent in many cases. While bundling is usually a big money saver, check out all of your options, it some cases separate policies with different insurers can be cheaper.

Keep Your Credit Clean

Your credit rating will have a huge effect on your premium so make sure you keep your credit history clean. Pull your credit report once a year and check for mistakes or accounts you do not recognize. If you find mistakes or accounts that are not yours, contact the credit-reporting agency immediately to have your report corrected.

Save Your Coverage for the Big Things

The more claims you have on your insurance record, the more you will pay for homeowners coverage. Its best to pay smaller claims out of pocket and save your insurance for truly catastrophic events. If you can comfortably cover damage costs, you will save money over the long run. Filing more than one claim in a year can easily result in a 20-40 percent premium increase.

Ask About Discounts

Insurers offer a wide variety of discounts and credits so make sure you are getting all of them that you are qualified to receive. Adding a security system, a sprinkler system or replacing your roof could all result in a discount. Ask your insurer for a list of all discounts they offer to see if you are missing out on any.

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