Home insurance rates

Whether you own a home already or you’re house-hunting, it’s wise to know average home insurance rates for your state so you can anticipate what your expense is when shopping your policy and creating a family budget. Knowing what you can expect to pay also helps you save money when comparing rates because you can more easily flag rates that are above the average home insurance cost for your area.
Average home insurance cost by state
While many factors go into calculating your rate, where you live is chief among them. Homeowners in states that are prone to hurricanes, hail storms, tornados and earthquakes tend to pay the most for home insurance. Insurance.com’s analysis of rates from top insurers for nearly every ZIP code in the country bears this out. Florida and Louisiana are the most expensive states for home insurance among six common coverage levels analyzed by Insurance.com. The least expensive states for home insurance are Hawaii and Vermont

As you’ll see in the homeowners insurance cost by state chart below, Florida is the most expensive state for home insurance, nearly $2,350 more than the national average for the coverage level analyzed. We show average home rates for five other common coverage levels at the end of this article.
Insurers review many factors when calculating your home insurance rate. Some of these variables are beyond your control, but you do have some influence over how much you pay for home insurance. By pricing other insurers every few years at least, choosing a higher deductible, making sure you get all the discounts that you can and not filing too many claims, you can do your part to get the lowest insurance rates possible for your home. We’ll explain these topics in detail:

How much is homeowners insurance?
Review customer satisfaction to find the best home insurance companies
Factors that affect homeowners insurance — in detail
Location plays an important role in the cost of home insurance
Weather-related claims
Risky areas to insure a home
Average homeowners insurance rates by state for five common coverage levels
Methodology
How much is homeowners insurance?
When buying a homeowner insurance policy, you decide the coverage amount for the following:

dwelling
liability
medical payments
The limits of your coverage for the following are typically a set percentage of your dwelling coverage limit as shown below:

other structures – 10 percent
personal property – 50 percent
loss of use – 20 percent
You also choose a home insurance deductible amount, which applies to claims for damage to your home or belongings, but not if you’re sued or a medical claim is filed by someone injured in your home. Deductibles usually come in the amounts of $500, $1,000, $1,500, $2,000 and $2,500. The higher your deductible, the lower your rate.

You should buy enough dwelling coverage to match the full replacement cost of your home, and it is recommended to have $300,000 of liability coverage to ensure sufficient coverage.

Learning how to calculate your home replacement cost or value is important, because the amount helps you determine how much dwelling coverage to buy. Figuring out an accurate replacment cost can be done by using online tools, calculating it yourself or by hiring an appraiser.

Medical payments coverage pays for injuries to guests in your home, regardless of who is at fault. Medical payments differs from liability insurance in significant ways, primarily in that it is for minor incidents and comes in very low limits of $1,000 or $5,000. The latter amount of $5,000 is recommended.

The nationwide average annual cost for home insurance for common coverage levels, based on a rate analysis by Insurance.com:

$1,228: $200,000 dwelling with $1,000 deductible and $100,000 liability coverage
$1,244: $200,000 dwelling with $1,000 deductible and $300,000 liability coverage
$1,737: $300,000 dwelling with $1,000 deductible and $300,000 liability coverage
$2,252: $400,000 dwelling with $1,000 deductible and $300,000 liability coverage
$2,790: $500,000 dwelling with $1,000 deductible and $300,000 liability coverage
$3,295: $600,000 dwelling with $1,000 deductible and $300,000 liability coverage
Review customer satisfaction to find the best home insurance companies
When shopping for home insurance, you want to do more than just compare average homeowners insurance rates. After all, how you’re treated when you file a claim is priceless.

Insure.com’s annual Best Home Insurance Companies ranking also lists top insurers. Here are the top 10, based on a survey of 3,700 customers, asking them about customer service, claims processing, value for price and if they would recommend the company and would renew their policy:

USAA
Chubb
Allstate
AIG
Esurance
Progressive
Liberty Mutual
American Family
Hartford
Erie

Factors that shape home insurance rates – in detail
Home insurance companies analyze potential risk when devising home insurance rates.

Many factors affect home insurance rates. Here’s a look at what impacts home insurance rates:

Your home’s age — Older homes have older wiring and plumbing so they are a bigger risk of causing a fire or flooding a basement.
Your home’s building materials — Insurers consider a wood-framed home a greater risk than a home made of brick. Fire, wind and pests can cause more damage to a wooden home compared to a brick structure.
Your home insurance deductible — Insurance companies like higher deductibles because it means you’re less apt to file a claim and will pay more for repairs if you file a claim.
Your homeowners insurance discounts — Insurance companies offer dozens of discounts. Three of the largest discounts are bundling your home with other types of insurance, such as auto; loyalty, which is staying with an insurance company for at least a few years; and being claims free for a period of time. Note: Insurers usually have a cap on the percentage of discounts you can receive. The limit is often set at 25 percent.
Your home’s claims history — The claims history includes both your filed claims and ones that previous owners filed. If you file more than one claim in a 10-year period, you can expect your insurance rates to increase. They’ll increase even more if you file more home claims. That could even cause your insurance company to drop you because you’re considered too much of a risk.
Credit history — Nearly all states allow insurers to consider a person’s credit history when devising a home insurance premium. Insurance companies say that credit history is a good indication as to whether a person will file claims.

Once an insurer compiles that information, it is able to create a home insurance rate. An insurance company first looks at the home’s perceived risk, the home’s location and the homeowner. An insurer then reviews filed claims and adds surcharges to the rate. They lastly subtract applicable discounts. The result is your home insurance premium.

Location plays an important role in the cost of home insurance
Location is one of the biggest factors in your home insurance rates.

Insurers consider many factors when judging location:

Weather (areas that experience more natural disasters will likely have higher premiums)
Population density
Nearness to an area that could lead to claims, such as woods (fire risk) or dangerous roads or intersections (cars crashing into your living room)
Proximity to a fire department and fire hydrant
Claims history for the area

Home insurance companies base rates in part by location, which can go well beyond the state level, said Burl Daniel, CPCU, CIC, CRM, Property and Casualty Insurance Expert Witness, in Fort Worth, Texas.

Daniel said that generally speaking, insurers base rates and premiums on a home’s COPE:

Construction (brick/frame)
Occupancy (owner/tenant)
Protection (fire department rating)
Exposure (residential vs. commercial neighborhood)

One part of a state might have higher rates because there is more crime. Or another part of the state may have lower rates because severe weather losses are less frequent.

For instance, someone who lives in New England near the ocean might not get as much snow as someone 25 miles inland. So, the person along the coast with less snowfall may pay less due to a lower risk of freeze losses. Or, on the other hand, if that person lives right along the coastline, he may pay more because of increased risk of ocean windstorm-related damage.

«It’s not one size fits all,» said Daniel.

Living near a full-time fire station with a nearby hydrant plays a role in your home insurance rates. The reason an insurer wants a home near a fire department and hydrant is that there is less chance of your home burning down if you live near a fire station. Having a hydrant nearby also means that firefighters can start battling a house fire faster than if the hydrant is down the street — or even miles away.

Weather-related claims
If you live in the part of the country with brutal, frigid winters, you will likely pay more for your insurance. Not only because rough winters can cause damage from snow and ice, but also frigid temperatures can cause frozen pipes and flooded basements.

Insurance Information Institute said that water damage and freezing caused nearly 34 percent of all losses in 2014.

Areas prone to wildfires can also have higher rates. Major wildfires aren’t just contained to areas that don’t get much rain like Southern California. Wildfires have destroyed thousands of acres in the Pacific Northwest and Tennessee in recent years. Those areas will likely see their home insurance rates increase.

Weather-related claims are often the most frequent, according to III. Here are the top five most frequent claims:

Wind and hail
Water damage and freezing
Vandalism and malicious mischief
Theft
Fire, lightning and debris removal

Water damage and freezing are the highest total dollar amount for claims. The most expensive homeowners insurance claims by incident are:

Fire, lightning and debris removal
Bodily injury and property damage
Wind and hail
Water damage and freezing
Vandalism and malicious mischief

III said about one in 15 insured homes has a claim each year and about one in 30 insured homes has a property damage claim related to wind or hail each year.

One way to keep your insurance rates down is to not file claims. That might sound counter-productive. You have insurance so why shouldn’t you take advantage of it, right? Wrong.

More claims mean higher insurance premiums and can cause your insurer to drop you.

Here’s one way to make sure that you don’t file too many claims — raise your deductible. The deductible is what you have to pay for repairs after filing a claim. The insurance company picks up the rest of the repair costs. An added benefit — raising your deductible will also decrease your home insurance premium.

If you decide to increase your deductible, make sure you set aside enough money to pay for the higher deductible in case you have to file a claim.

Risky areas to insure a home
Insurance companies review claims from an entire neighborhood when devising rates. Insurers gauge risk by looking at the number of burglaries, vandalism and weather-related claims in an area. Insurance companies usually use zip codes when gauging an area, but your neighborhood and even your street can influence your home insurance rates.

Daniel said insurers may deem a high-crime neighborhood or ones without a nearby full-time fire department and nearby fire hydrants as high risk.

When an insurer perceives higher risk of loss, it may only offer limited policies or policies with limited perils coverage and/or higher deductibles so there is less chance of claims due to increased risk of loss.

Methodology:
Insurance.com in 2016 commissioned Quadrant Information Systems to field home insurance rates from major insurers in each state for nearly all ZIP codes in the country for 75 coverage levels based on various dwelling and deductible limits. The homeowner profile is a 35-year-old married applicant with excellent insurance score; new business HO3 policy for house built in 2000 with frame construction and composition roof. Other Structures: 10%. Loss of Use defaulted: 10%. Personal Property defaulted: 50%. Guest Medical limit: $5,000. Personal property: 50% of dwelling coverage for actual cash value.
Get the best rates on home insurance

Home is where the heart is – protect it with a great home insurance policy at LowestRates.ca. We’ll bring you the cheapest rates on home insurance from all the top providers in your area.

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Why do I need home insurance?

If you’re like most Canadians, your house makes up a big portion of your net worth. That’s why home insurance is a must. A homeowners policy protects your house, its contents, and your other assets in the event of a fire, theft, storm, liability claim, or other unexpected peril.

If an unforeseen event causes damage to your home or property, with a good home insurance policy your insurer, not you, will pick up the tab. And since many lenders often make home insurance a mortgage requirement, you may as well get the best plan at the lowest rate, right?

Why compare with LowestRates.ca?

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Why shop for house insurance online?

It pays to shop around for insurance. We compare quotes from Canada’s leading home insurance providers in just minutes, so you can get the best policy at the best price. Many homeowners don’t realize they can lower their premiums by comparing quotes online, but it really is that simple.

After all, house insurance quotes can vary significantly from insurer to insurer. That’s why comparing rates is the only way to make sure you get the best deal. No matter what kind of house you own or which province you live in, we’ll find you the cheapest home insurance rates.

How do I compare quotes?

Just fill out the form in our home insurance section, provide details about you and your place, and then we’ll find you the cheapest house insurance rates available. Depending on where you live, you’ll get up to 10 quotes.

Once you select the quote you want, an insurance broker will call you to lock in your rate and help you set up your policy. If you’re insuring an Ontario or Alberta home, you can call one of our brokers directly. Shopping for house insurance has never been quicker or easier.

Do home insurers require a credit check?

A credit check is optional, but it can definitely help you get the lowest rates on your home insurance. Insurers often use the results of your credit check to help set your rate. In other words, a good credit score could help reduce the price of your plan. In fact, you’ll probably get the cheapest rates on house insurance if you do get a credit check.

One great advantage of our service is that we only do one credit check per application, so your credit score will remain unharmed. Homeowners who search for an insurance plan on their own often have to submit to credit checks with each provider they get a quote from, which can lower their credit score.

What type of home insurance policy should I select?

That depends on how much coverage you want for your property. Here are the four basic types of home insurance coverage you can choose from:

Comprehensive coverage
This policy offers the broadest range of home insurance coverage. It protects your home and its contents from all risks, except a few exclusions:

Optional risks: Risks that aren’t covered in normal policies, but that you can buy additional coverage for. Sewer back up and earthquake coverage are examples of optional coverage.

Uninsurable peril: Risks you can’t insure because they can be avoided with proper planning. For example, you can’t get coverage for flood damage if you built your house on a flood plain.
Basic coverage/named perils
This type of home insurance is more scaled back than comprehensive coverage. Basic coverage only pays for the damages that are specifically outlined in your policy.

Broad coverage
This type of insurance falls halfway between comprehensive and basic coverage. A mid-priced compromise, it provides comprehensive coverage on main items, like your home’s physical structure, but only basic coverage for the contents inside.

No frills coverage
This type of coverage isn’t offered by all insurers and is usually limited to properties that don’t meet normal standards. For example, if your your home has physical issues, an insurance company may only offer you a very limited no frills policy.

What possessions does house insurance not cover?

Standard homeowners policies don’t cover high-value items like jewelry, rare art, etc. Ask to schedule these items separately on your policy if you want them included in your home insurance coverage.

Should I select an actual cash value plan or a replacement cost plan?

When it comes to homeowners insurance, most people opt for a replacement cost plan. This plan pays for the full replacement value of the items or repairs you claim. For example, if someone steals your old TV, your insurance provider will pay for a new one of similar make and quality.

An actual cash value (ACV) plan reimburses you for the value of the items you claim at the time they were damaged. ACV plans account for depreciation, so the amount of money you get from a successful claim generally won’t cover the cost of replacing damaged items.

For example, if someone steals your 5-year-old TV, your insurer would only pay what they deemed it to be worth at the time of the theft. But that valuation will likely be much less than what you paid for the item and much less than what it would cost to replace it.

Just remember: if your house sustains major damage or is subject to a serious theft, at least you’ll be able to replace all of your stuff with a replacement cost plan. That’s why most Canadians prefer replacement cost plans even though they’re usually a little more expensive.

How much home insurance coverage do I need?

The amount of coverage you take should reflect the value of your home plus the contents inside it, so keep stock of what everything is worth. Remember, it’s better to have a little too much coverage rather than not enough.

Home insurers use variables like square footage, structure type, and your postal code to give you a quote. It’s up to you to make sure your coverage matches the value of your home and your possessions.

How can I have a hassle-free claims experience?

Easy — be properly prepared before you make a claim. Take a yearly inventory of your home upgrades and of your contents.

When you need to make a claim, make sure all your documents are organized and ready before you contact your insurer. Here are the documents you’ll need:

A list of the items lost, damaged, or stolen
Receipts for said items and any photographs or other supporting documentation
Any relevant medical records or police reports if available