The Average Cost of Homeowners Insurance

Certain regions and properties are prone to natural hazards.
Image Credit: Ingram Publishing/Ingram Publishing/Getty Images

When shopping for homeowners insurance, it helps to know the factors that providers consider when setting their rates, or premiums. This knowledge can help you reduce your premium and overall housing expense. As of the time of publication, the average homeowners insurance premium nationwide was $807, reports Individual states regulate homeowners insurance pricing. The costs and coverage for your specific home may vary.


Region of the Country

Property location affects the average price of homeowners insurance. If you live in an area prone to hurricanes, tornadoes, flooding or earthquakes, you may have to insure against them, which may require a separate policy. Homeowners in Florida, Texas and other states along the Gulf Coast threatened by hurricanes pay the highest homeowner insurance rates in the country at nearly double the national average. Homeowners in Kansas and Oklahoma, states known for tornadoes, also pay high insurance premiums. A home located where floods and earthquakes are a higher risk require a special insurance rider. A rider is a policy attachment that provides additional coverage for a specific disaster.


Video of the Day

Condition of the Home

Insuring an older home may cost more because of problems that tend to develop in older constructions. Insurance companies also consider replacement costs when figuring out your premium. The replacement cost is the projected expense to repair or rebuild your home to get it back to like-new condition. Certain defects may also make your home uninsurable. For example, outdated electrical wiring that fails to meet building codes may require updating before you can get insurance. Plumbing that hasn't been updated in 25 years is another factor that can increase your premium. Insurance companies don't like the potential for water-related problems, which can lead to mold -- a destructive and expensive problem.


Neighborhood You Live In

Insurance companies consider the distance of your home from the nearest fire station or hydrant. If you live more than five miles away, you may have to pay a higher rate. How many claims other homeowners in the same neighborhood submit can also increase your premium, even if you've never submitted a claim yourself. Living in a high-crime area will also cost more. No matter what the high-risk marker, insurers generally interpret more claims as higher risk and therefore, more expensive to insure.


Money-Saving Tips

If you live in a state where you are paying higher insurance rates, you can cut the cost by taking advantage of discounts your insurer offers. Installing home safety and security features may qualify you for a discount. A new roof constructed of materials that can withstand high winds and hail storms can also save you money.