What does it cost to insure a $150,000 house?

30 Mar

The cost to insure your home will vary depending on a wide variety of factors, including everything from the age of the house, your location, how far you are from a fire station and even your credit score. 

We thought it might be helpful to look at what you might pay for homeowners insurance on a $150,000 house and how those costs could be impacted by both the risk factors associated with your home as well as your personal factors. 

The state you live in impacts insurance rates

While many factors impact your homeowners premium, one of the largest factors is where you live. This not only includes the state you call home but your specific neighborhood as well. 

As an example, according to the National Association of Insurance Commissioners (NAIC), the cost to insure a $150,000 house averages roughly $1,413 on a nationwide basis. However, some states are dramatically less expensive than others, in Arizona the average premium for the same house would be a mere $336 and in Alaska and Idaho the average premium drops to $263.

On the other hand, in Tennessee you will spend an average of $1,470 to insure the same home which is almost six time the cost of homeowners coverage in Idaho. 

There are a number of local factors that impact insurance rates, here are just a few:

  • Severe weather: In states that are prone to severe weather including hurricanes, tornadoes, wildfires, or earthquakes, homeowners will pay more for coverage.
  • Crime rates: If your neighborhood is a hot bed for crime, you will pay more for homeowners coverage. 
  • Labor and building costs: The cost of building materials and labor will also factor into your homeowner rates. Insurers consider these costs because they may have to pay to repair or rebuild your home if it is damaged or destroyed by a covered peril.

Factors that impact your insurance costs

Insurance companies use a variety of factors to set a homeowners insurance premium. These factors are related to the home as well as your personal risk factors. Here are a few of the factors that are factored into your premium:

  • Location: The location of your home will absolutely impact your premium. Every insurance company uses proprietary algorithms that will consider the city, county and your neighborhood into account when setting a premium. See Average Home Insurance Rates Per State
  • House age: A newer home will usually be less expensive to insure than an older home as the expensive components of the home are newer and are less likely to fail. These systems include the roof, plumbing HVAC and even the foundation 
  • Home size: The size of your home will also impact your insurance costs. A larger home costs more to rebuild or repair if it is damaged by a covered peril. Easily calculate your replacement cost.
  • Claim history: The number of claims you have made in recent years will have a major impact on your premium. If you have made a claim in the last three years you will pay more for coverage than a policyholder that has never made a claim on their policy. Will filing a claim on my homeowners insurance increase my premium?
  • Additional structures: If you have additional structures on your property, this includes sheds, decks, pools, and even guest houses, your premium will definitely be headed up. The more chances for a claim, the more an insurance company will charge for a premium.
  • Your credit score: Statistics show that homeowners with low credit scores tend to file more claims so if your credit score is not great you will be paying more for homeowners insurance. Your Credit Score Can Raise Home & Auto Insurance Prices
  • Pets: If you have a certain type of pet, you may pay more for coverage. Insurers are reluctant to cover dog breeds such as pit bulls and Dobermans. If you have certain type of dog you will most likely pay more for coverage or even find it hard to get coverage. 

How to save on homeowners insurance 

If your homeowners insurance is busting your budget, there are ways to save on coverage. Here are a few tips to lower your premium:

  • Shop your coverage: This is probably the best way to lower your premium. Insurers rate risk differently which can result in dramatic differences in premium quotes. Shop at least 5 insurance companies and make sure you are comparing apples to apples when it comes to coverage levels and deductibles.
  • Discounts: Insurers often a wide variety of discounts which can help reduce your premium. Ask your agent to do a discount review to make sure all of the discounts you are qualified to receive are being applied to your policy. 
  • Raise your deductible: Raising your deductible will lower your premium. If you can afford to double your deductible, you should see a dramatic drop in your premium. Always choose a deductible you can easily afford in the event you have to make a claim on your policy.
  • Improve your credit: If your credit score is less than stellar, making an effort to improve it can help lower your homeowners premium. Once your credit score starts to improve contact your agent and ask them to recalculate your premium to see if it improves. 
  • Home improvements: Insurers offer discounts for certain home improvements and some of these discounts can be big. If your roof is in need of replacement, consider using wind or hail resistant shingles. Adding a monitored security system or sprinkler system can result in a major discount. 

Tags: , , , ,