Homeowners insurance exists to help cover one of your largest investments. At its most basic level, home insurance provides financial protection against various perils or damaging events that may affect your home, such as theft, fire, storms and incidents that happen on your property. If you have a mortgage, your lender will require you to carry homeowners insurance.
When you purchase a homeowners insurance policy, you pay either a monthly or annual fee. Typically, insurance experts recommend purchasing enough coverage to rebuild your home and replace the value of the assets inside in the event that it is destroyed. By doing so, you reduce the chance of being left with costly out-of-pocket expenses and allow yourself to recoup your losses more quickly. It is important to note that the cost to rebuild your home is not the same as your home’s market value.
While the core purpose of homeowners insurance is consistent regardless of the home insurance company you choose, every provider is unique in its policy offerings. You have the ability to personalize your policy by choosing your coverage limits and endorsements and taking advantage of any available discounts. Factoring in these variables, along with your personal and financial situation, you will likely see a range of premiums when getting home insurance quotes from different companies. To compare quotes effectively, it might help to know more about home insurance.
Where you live, the condition of your home and the cost to replace it play the most significant role in determining your home insurance premium, but certain personal and financial factors, such as your marital status and claims history may also influence your rate. The insurance company’s goal is to collect information that helps determine risk to calculate your premium. When you start looking for a home insurance policy, it may help to do some research to determine your home’s replacement cost and the total value of your personal belongings to calculate how much coverage you will need. You might want to speak with a licensed insurance agent to determine what you actually need and what coverage options are available.
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Damage from floods is not covered under standard homeowner’s insurance policies, but flood insurance is available through the National Flood Insurance Program (NFIP) and some private insurers. Flooding can cause costly damage to your home and belongings and could happen at any time. If you live in an area prone to flooding, your lender may require you to purchase flood insurance.
On average, U.S. homeowners spend $700 per year on flood insurance, although like any insurance policy, your actual rates will vary. Flood policies usually require payment in full, so it is a good idea to research any area you plan to move to so you know in advance if flood insurance will be necessary.
Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on 40-year-old male and female homeowners with a clean claim history, good credit and the following coverage limits: