Having adequate home insurance is a crucial part of being a homeowner, because it can protect your investment in the event of a disaster. However, home insurance quotes can be deceiving, as not every policy will include the same coverage options or price points. Therefore, it is essential that you learn more about this type of insurance before selecting a policy. Doing so can not only save you money but also ensure that you have adequate coverage.
In general, the home insurance cost you can expect will be determined by several factors, including the coverage that is included within your policy, your personal claim history, your deductible amounts and the area you live in. By familiarizing yourself with these facets of an insurance policy, you will be well on your way to saving money while maximizing your policy benefits.
1. Why You Should Invest in Home Insurance
Home insurance is essential in protecting your home against possible disasters. Depending on your policy, your insurance may cover the repair or replacement costs to your home, personal property and other structures on your property in the event of a disaster.
Not only is it important to protect your home, but most mortgage lenders will require you to maintain adequate coverage for the life of your mortgage. If you do not obtain a policy on your own, your lender may provide one for you. However, the included policy may not provide the coverage you need or it may be offered at a higher cost.
2. What does home insurance cover?
When reviewing home insurance quotes, it is essential that you consider the “perils” that are included within a quoted policy. A peril refers to an event that causes damage that would result in a claim.
If a peril occurs that is not included in your insurance policy, your insurer will not pay for the associated expenses. Common perils that may be included within your policy include:
- Theft or vandalism.
- Windstorms and hail damage.
- Falling objects.
- Damage caused by the weight of sleet, snow or ice.
- Damage caused by vehicles or aircrafts.
On the other hand, there are a number of perils that your policy may no cover. For example, perils like flooding, mold, infestations, nuclear hazards, earthquakes and landslides are very rarely included in standard policies.
Home insurance coverage is determined by the basic parts that are included within your policy. As such, you will need to choose the types of coverage that you wish to be enrolled in, such as:
- Dwelling protection, which covers damage that is done to your home and attached structures.
- Other structure protection, which provides coverage to stand-alone structures on your property, like fencing or a detached garage.
- Personal property coverage, which pays for the repair or replacement of your belongings.
- Liability coverage, which covers the cost of injuries that others sustain on your property.
- Medical payments, which offer coverage for medical expenses related to you, your family members or guests.
While your home insurance cost is greatly determined by the amount of coverage that your policy provides, it is crucial that you select an amount that will adequately cover the complete cost of repair or replacement of your home and belongings.
3. What is the average home insurance cost?
The average home insurance cost can vary strongly from one person to the next. This is because price is determined by several factors, including:
- The perils, coverage options and coverage amounts included within your policy.
- The deductible amount you select for your policy, which is the amount you must pay before the insurance will pay for an incident.
- The age of your home.
- Your personal claims history.
- The claims history of other homeowners within your immediate neighborhood.
- The fire protection rating of the city your home resides within.
- The distance between your home and a water source.
- Whether or not you have any risky recreational items, such as pools or trampolines.
Additionally, where you live has a huge impact on the home insurance cost you will pay. For example, a study found that in 2013, residents of Oregon, Utah and Wisconsin paid an average of $568 to $665 per year on insurance premiums. That same year, Florida, Texas and Louisiana had rates that averaged over $1,800 annually.
#4. Always Compare Home Insurance Quotes
When searching for the best home insurance, it’s crucial determine the amount and type of coverage that you need. Doing so will help you compare home insurance quotes with multiple providers to find the best price for the right coverage.
When reviewing policy providers in your area, you can save more by inquiring about additional discounts that you may qualify for. For example, you could be eligible for a multi-policy discount if you choose the same provider for your home and auto insurance policy.