Homeowners
Insurance

What does Homeowners Insurance Cost?

Homeowners insurance premiums are calculated by a number of variables such as age of home and geographic location. Like auto insurance, homeowners can be purchased for a low rate, but with very little coverage. Essentially, your premium will be based on how much it takes to cover you home and property. For example, a homeowner in rural South Carolina will likely pay less for his policy than someone in New York City, as there are more risks associated with city dwellings than with rural.

The following factors can affect your homeowners insurance premium:

• Claim history. If you have a history of claims on a homeowners policy the insurance carrier will rate you as higher risk for additional claims.
• Home features and characteristics. Factors like your home’s age, building materials, roof condition, foundation type (slab or basement) and more such as swimming pools and dog breeds can affect your premium.
• Location. Where your home is located will determine some favorable and some not favorable evaluations. How close you are to emergency services could lower your rate, but if your area is prone to severe weather, such as tornados, your rate will increase.
• Protective devices. Alarm systems, smoke detectors, fire extinguishers and other types of protective and preventative methods will positively affect your rate.
• Personal factors. Insurance carriers will also look at the homeowner for exposures. Smokers, for instance, may pay more as their risk for fire is higher than those who do not smoke. Your credit, limits and chose deductibles will also affect your rate.

That being said, in 2014 the national average homeowners insurance premium was $1,132, as reported by the Insurance Information Institute (III).

What are Common Homeowners Claims?

If you are looking for how to file a claim, please visit our Client Services.

According to the Insurance Information Institute (III), 5.3 percent of insured homes made claims in 2014. 97.3 percent of those were property damage claims, which include theft. These statistics will fluctuate by year, depending on naturally occurring events, like hurricanes in the southeast and fires in the west United States. However, frequency of claims is only half of the pertinent information, it’s the severity of these claims that demonstrate more clearly the need to insure your home.

How Can I Reduce My Risk?

Reducing your homeowner risks can be as simple as cleaning your gutters and installing a security system. Incidentally, reducing your risks of loss around your home and property will also lower your homeowners insurance premium. The following are some starting tips for securing your home and getting better rates:

Before hitting the road:

1. Reinforce your home. There are numerous ways to improve or modify your home to reduce the chances and damage of events such as fire or water damage. Storm shutters, reinforced roofs and drainage improvements are just a few ways of reinforcing your home and lowering rates. While some modifications can be pricey, they are investments which increase the value of your home and, more importantly, the safety of your home.
2. Maintain your home. Liability lawsuits and large claims can be avoided by keeping up with routine maintenance such as cleaning air filters, removing dead tree limbs and removing ice and snow from your driveway and sidewalks.
3. Improve home security. Taking preventative measures, such as installing burglar alarms and deadbolts, will help you sleep better, and may even lower premiums.
4. Know your specific risks. Working with a qualified expert to identify all the ways in which you could experience loss is extremely important. For example, if you own a dog that the insurance carrier types as “aggressive,” you will get a rate increase. Extras around your home, such as trampolines, pools and tree houses, are considered risky as well. According to the Consumer Product Safety Commission, there were over 100,000 emergency room visits related to a trampoline in 2014.

Frequently Asked Questions

1. Is homeowners insurance required?

Not typically by the state, however mortgage lenders typically DO. Check with an insurance specialist before determining if you need insurance or not.

2. Why is homeowners insurance important?

If you’re insured, any significant repairs or rebuilding after a disaster can potentially be covered by your insurance policy, up to your set limits.
If you owe money on your mortgage and your home is completely destroyed, you will still be required to pay your home loan, unless you have adequate homeowners insurance. Homeowners insurance can help pay for the rebuilding cost. If you insure your house at full replacement cost value, you will have the means to fully rebuild, if needed.
Liability coverage is arguably the most important aspect of homeowners insurance. If something happens to a visitor on your property, your liability coverage can cover that person’s medical costs, as well as your legal fees if you are sued. Lawsuits are expensive and hiring a lawyer can cost thousands of dollars. If you’re found responsible, you could be ordered to pay large sums of money in a personal injury suit, a cost that can be offset by your liability coverage.

3. When should I get homeowners insurance?

You should purchase your coverage before going to a mortgage company for a loan. The timing can be tricky, but with the right insurance agent, you’ll be prepared and fully covered.

4. What if I rent? Or own a mobile home or condominium?

Renters can purchase renters insurance, which protects personal property. If you own a condo or mobile home, any type of home really, you can, and should, purchase homeowners insurance.