Personal Finance Insider writes about products, strategies and tips to help you make smart decisions with your money. We may receive a small commission from our partners, but our reports and recommendations are always independent and objective. If you are buying a refrigerator, a sofa or a car, one of the first things you will want to know is how the item "normally" costs. And with these types of physical products, it's usually relatively easy to do a little research online to get a solid price base, but it's not that easy to do it with intangible products like homeowners insurance. In addition to taking the time to ask all your friends, family and neighbors what they pay for in prizes, it is difficult to know if the quote you received is outrageous or theft. Fortunately, there is a lot of data available that can help you set realistic expectations for homeowners insurance costs. In this article, we will examine how much the average home owner pays in insurance premiums for home owners, the factors that influence your specific policy, and the ways to save.
According to the latest publication of the Home Owners Insurance Report by the National Association of Insurance Commissioners (NAIC), the average annual premium in the United States in 2017 was $ 1,211. The average 2017 premium – the most recent data available – was an increase of 1.6% from the 2016 average of $ 1,192. Premiums have risen steadily over the past ten years. In 2012, the national average premium was $ 1,034 and in 2008 it was even lower than $ 830. The value of your home plays an important role in paying insurance premiums. Here's how much homeowners insurance costs on average based on home value in the United States, according to NAIC: estimated home premiums on average value for a HO-3 policy $ 49,999 and less than $ 633 $ 50.000 to $ 74.999 $ 745 $ 75.000 to $ 99.999 $ 814 $ 100.000 to $ 124.999 $ 870 $ 125.000 to $ 149.999 From $ 918 $ 150.000 to $ 174.999 $ 960 $ 175.000 to $ 199.999 $ 997 $ 200.000 to $ 299.999 $ 1.092 $ 300,000 to $ 399,999 $ 1,252 $ 400,000 to $ 499,999 $ 1,467 $ 500,000 and above $ 2,149 * The above table uses NAIC insurance data. If you live in an area with high real estate values, this also means that it would be more expensive to replace your home if it were destroyed. So NAIC says that average premiums tend to be higher in densely populated areas. Secondly, your potential catastrophe exposure plays a significant role in what you pay for homeowner's insurance. If you live in an area prone to hurricanes, earthquakes or tornadoes, you can expect to pay more than someone who lives in an area with less risk of natural disasters. S&P Global Market Intelligence: Alabama State Average Annual Award $ 1,116 Alaska Alaska $ 1,002 Arizona $ 966 Arkansas $ 1,091 California $ 966 Colorado $ 994Connecticut $ 1,058 Dollar $ 1,172 Department of Columbia $ 1,047Florida $ 1,117Georgia $ 1,137 Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Ireland $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Ireland $ 9 $ Georgia $ 9 $ Ireland $ 9 $ Georgia $ 9 $ Ireland $ 9 $ Georgia $ 9 $ Georgia $ 916 Ireland $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Ireland $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 9 $ Georgia $ 916 $ 1,212 Massach usetts $ 1,031 Michigan $ 919 Minnesota $ 951 Mississippi $ 1,099 Missouri $ 897 Monterana $ 948 Nebraska $ 907Nevada $ 933 New Hampshire $ 1,049 New Jersey $ 1,052 New Mexico $ 949 New York $ 999 North Carolina $ 1,118 North Carolina $ 1,1 $ North Carolina Dakota $ 898 Tennessee $ 1,118 Texas $ 1,140 Utah $ 1,025 Vermont $ 1,004 Virginia $ 1,181 Washington $ 986 West Virginia $ 1,101 Wis consin $ 903 Wyoming $ 966 * The table above uses S&P Global Market Intelligence data. Here are the states where insurance premiums for annual homeowners are less affordable on average, according to S&P Global: StateAverage Annual PremiumMaryland $ 1,212 Virginia $ 1,181Delaware $ 1,172Texas $ 1,140Georgia $ 1,137 * The table above uses data by S&P Global Market Intelligence. Here are the states where insurance premiums for annual homeowners are cheaper on average, according to S&P Global: StateAverage Annual Premium Ohio $ 895 Missouri $ 897 South Dakota $ 898 Wisconsin $ 903 Indiana $ 906 * The table above uses data from S&P Global Market Intelligence. As we have already seen, the value of your home and its location are two of the major variables affecting the prices of homeowners insurance. However, there are some other factors that can increase or decrease your premiums. Coverage levels The type of coverage you choose will affect the price to pay for homeowners insurance. Cash value hedging is generally the most convenient. With this type of coverage, your insurance company will pay only what your property is worth minus the depreciation, not what it would actually cost to replace your home and its belongings. For added protection, you can choose coverage of replacement costs instead. With this type of policy, your insurer will pay what it would cost to repair or rebuild your home in dollars today. For example, if a tree fell through your house and destroyed your sofa, a replacement cost policy would pay for everything that costs replace the sofa. But a cash value policy would pay only what the couch is worth today. And if the sofa is several years old, its value may be much less than what you originally paid. You can expect to pay more to cover replacement costs, but it may be worth protecting yourself from coverage gaps that can be caused by depreciation. Other variables Here are some other factors that can affect the price of the replacement homeowners insurance: the deductible chosen: as a general rule, the premiums decrease as the deductibles increase. Age of your home: older houses often require more work to rebuild modern safety standards, so that they can cost more to insure than newer homes. Roof condition: if the roof is relatively new and in good condition, you will typically pay less than a home owner with an old or built roof with lower quality materials Advance complaints: you can expect to pay more if you have filed several complaints in the past or live in an area with a high claim rate. Add Features to Make Your Home Safer If you are looking for ways to lower insurance premiums for homeowners, think about how to improve the security of your home. Adding one of the following security features to your home could qualify you for an insurance discount for home owners: smoke detectors, screw locks, fire extinguishers, roller shutters, security system, splash protection system, new or reinforced roof , groups insurance policies. . Increase your deductible Finally, increasing your deductible may reduce your premiums. But make sure you don't set a premium higher than what you could pay without getting into debt. And know that if you have a mortgage at your home, your lender may request that the deductible remain below a certain limit. Look Around The last variable that can affect the price to pay for home insurance is the company you choose. Premiums can vary widely depending on the insurance company. So one of the best ways to save on homeowners insurance would simply be to make sure you shop before choosing an insurance provider. Try to get at least 3-5 quotes before choosing a home insurer. Or, to save time, you can use an online insurance purchase tool for homeowners like Policygenius to compare dozens of insurance companies simultaneously.