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Many factors influence the cost of homeowner’s insurance, including the size, construction, and location of your home. (Shutterstock)
Homeowners insurance costs are never one-size-fits-all. Multiple factors influence how much you’ll pay for homeowners insurance on a $150,000 house, including location, style, age of the property, how you’ll use the home, what’s inside, and how much protection you want.
The insurer you choose, and how it assesses your home’s level of risk, will also affect your home insurance costs — so it’s important to compare quotes to find the best insurance rates available to you. Credible makes it easy to see quotes from multiple homeowners insurance providers.
How much does homeowners insurance cost?
Put simply, there’s no straightforward answer to this question.
The cost of homeowners insurance on any home varies based on those factors mentioned above, with location being one of the most impactful. The price you’d pay for coverage on your home in one state — or even in a specific area of town — could differ greatly from a different state or neighborhood.
For example, the average premiums on basic dwelling and personal property coverage for a $150,000 home run about $1,413 annually, across the country as a whole, according to the National Association of Insurance Commissioners (NAIC). In Arizona, though, the average annual premiums on the same home would be $336, while in Idaho and Alaska, it would be just $263.
On the flip side, insuring that same $150,000 home with the same basic coverage would cost you an average of $1,470 in Tennessee. That’s nearly six times as much as you’d pay in Idaho or Alaska.
Premiums vary from one state to the next for many reasons, including:
- The risk of natural disasters, such as hurricanes, tornadoes, wildfires, or earthquakes
- The local price of replacement building materials
- Regional labor costs
- Crime rates
No matter what the average homeowners insurance cost is where you live, comparison shopping may help you find the best possible price for the coverage you need.
With Credible, you can compare home insurance rates in minutes.
Factors that affect the cost of homeowners insurance
When it comes to building — and pricing out — a homeowners insurance policy on any home, insurance companies take many important factors into consideration. These factors tend to fall into three general categories: home-related, policy-related, and personal.
Here’s a look at why some of these factors are important and how they might affect your annual premiums on a homeowners insurance policy.
Home-related factors
First, an insurance company will typically take the specifics of your home into account. This allows the carrier to properly gauge how much of a risk your property poses and how much it would cost to repair, replace, or rebuild it following an eligible claim.
Location — Average rates vary from one state to the next, with expensive states running well above average and cheaper states costing much less. But each insurance carrier uses its own proprietary calculations that can take your city, county, and even specific neighborhood into account. And whether your home is in a rural, suburban, or urban area will also affect premiums.
Age — The year a home was built can affect its insurance premiums in a few different ways. For example, a newer home will have newer components (roof, foundation, plumbing, electrical) which are less likely to fail and create a covered loss.
But a newer home may have been built with upgraded materials or using newer building techniques, and it may cost more than an older property. An older home may have components with more wear and tear, architectural features that are difficult to replicate, or components that would be costly to replace. This could also raise replacement building costs.
Size — It stands to reason that the larger a home is, the more it will cost to insure. This is because a larger home would likely cost more in materials and labor to repair or rebuild after a loss, regardless of its market value. All other factors being equal, a $150,000 home that’s 900 square feet will usually have lower insurance premiums than a $150,000 home that’s 3,000 square feet.
Claims history — Insurance carriers are all about reducing risk. If you’ve made a claim against your homeowners insurance in recent years, this could negatively affect your premiums moving forward — at least until enough time has passed. Likewise, if you move into a home that’s had a significant claim before you owned it, that history may also affect your premium going forward.
Structures — Additional structures on your property mean more opportunity for a claim, so you can expect your home insurance premiums to also increase. Coverage for structures often includes attached garages, sheds, decks, a pool or guest house, or gazebo.
HOW HOME RENOVATIONS IMPACT YOUR HOMEOWNERS INSURANCE PREMIUMS
Policy-related factors
The next set of factors that affect cost center around the actual policy that you build: your specific coverage options, limits, and even the company you choose to buy the policy from.
Coverage limits — Having enough coverage to protect your home is imperative. But you also want to balance your coverage limits with your budget and needs. The higher your coverage limits, the more you can expect to pay in premiums. Conversely, the lower your coverage limits, the lower your premiums will likely be.
You’ll need to choose both a dwelling coverage limit (protecting your home, related structures, and any permanent fixtures or appliances) as well as personal belongings coverage (for the things you own — like furniture, electronics, and clothes — that are inside your home).
You can also opt in for additional protections, such as loss of use coverage (in case your home is damaged and you’re unable to stay there until repairs are complete). All these options will contribute to your cost of home insurance.
Deductible — Your deductible is the portion of your loss that you’ll be responsible for paying before your insurance coverage will kick in. The higher your deductible, the less your carrier will have to pay — so the lower your premiums may be. In fact, raising your deductible from $500 to $1,000 could save you up to 25% on your premiums, according to the Insurance Information Institute.
Discounts — If you qualify, discounts can make your home insurance policy more affordable. Different carriers offer different discounts that can reduce premiums, including discounts for multiple policies, having certain safety features installed in your home (security systems, smoke detectors, sprinkler systems, etc.), and even occupation- or affiliation-based discounts.
Company/insurer — As with any consumer product, you’ll likely get a different price from each different carrier that you compare. Every company has its own rates, discounts, risk calculations, and coverage options, so it can pay to get quotes from at least a few to find the best possible price.
With Credible, you can compare quotes from multiple home insurance providers.
Personal factors
Lastly, here are some important personal factors that companies may take into account when calculating the cost of your homeowners insurance.
Credit — Believe it or not, insurance carriers often consider your credit history (and credit score) when determining premiums. Insurers can view a good credit history as an indication that you take care of your obligations. On the other hand, negative credit history can indicate to a carrier that you might be an increased risk.
Lifestyle — Some lifestyle choices can affect your homeowners insurance premiums, as they may pose added risk to your insurance carrier. These include owning specific dog breeds, insuring certain types of personal property, or having added risk factors (like a diving board or trampoline) on your property.
Where to get homeowners insurance on a $150,000 house
Finding homeowners insurance coverage on a $150,000 house can be a relatively simple search. Many national and regional carriers offer policies on houses of this value. You’ll just need to shop around to find a company that not only sells policies in your area, but also offers the best possible premiums.
It’s not enough to find carriers in your state, though; you’ll need to make sure they cover your specific location. For example, some insurance companies may insure houses in central areas of the state but refuse to write policies close to a high-risk coastline.
Consider asking around to see which carrier your friends, family, and neighbors use. You can also see if any of your other carriers (auto insurance, life insurance, etc.) write homeowners policies in your area, then comparison shop to find the lowest prices and best coverage options.
How to save on homeowners insurance for a $150,000 house
Trimming your homeowners insurance costs can be a great way to save money throughout the year. Here are a few easy ways to lower your premium costs:
- Lower your coverage limits. The less coverage you buy, the lower your premiums will be. Your limits should be high enough to cover replacement costs for the property and however much coverage your mortgage lender requires, if applicable, but not so high that you’re paying for coverage you don’t need.
- Raise your deductible. The higher your deductible, the more you’re willing to pay toward a claim. Insurance companies will lower your premiums in exchange. Just be sure your emergency fund is more than big enough to cover that deductible if you have to file a claim.
- Keep your credit in check. A good credit history can indicate that you manage your finances well, while poor credit may hint at the opposite. Try to keep your credit healthy to keep premiums as low as possible.
- Bundle your policies. You can often save by buying homeowners coverage from a carrier you already have a policy through. See if your auto, life, or personal property carrier offers homeowners insurance and, if so, whether it offers a bundle discount.
- Look for discounts. See which discounts you qualify for, either due to your home’s features, your occupation and affiliations, or even your education level. These can all save you money.
- Secure your home. If it serves to protect your home, it may reduce your premiums. Adding certain features or protections — like indoor sprinklers, a more durable roof, security system, new smoke detectors, or a fence around your pool — can mean a lower price tag.
- Shop around before buying. Before you purchase a homeowners insurance policy, shop around and get pricing from multiple carriers. This will give you an idea of the best possible rates and what coverage options you should choose before you commit.
Credible makes it easy to compare home insurance rates to find the coverage that works best for you.
Homeowners insurance FAQs
While the cost of homeowners insurance can vary widely, some questions about property insurance are common. Here are answers to some frequently asked questions about homeowners insurance.
What does homeowners insurance cover?
Depending on the coverage options you choose, homeowners insurance can cover everything from smaller repairs and damage to a full rebuild of your home in the case of a total loss. You can also protect all your belongings with actual cash value coverage, minus depreciation.
Most policies provide medical payments coverage, too, in case someone else is injured on your property. You’ll likely be required to purchase liability protection as well.
What isn’t covered by homeowners insurance?
Homeowners insurance doesn’t cover normal wear and tear on your home or any type of neglect of the property. Depending on your location and policy, your coverage may also exclude things like flood damage, hurricanes, mold, and more.
How much homeowners insurance do I need?
The amount of homeowners coverage you need depends on the requirements of your mortgage lender (if applicable), as well as your budget and what sort of risk you can afford to take on.
Consider buying enough coverage to at least rebuild your home (at current labor and materials costs) if it’s destroyed, as well as any belongings you wouldn’t want to pay to replace out of pocket.
What are the most expensive states for homeowners insurance?
Texas and Tennessee are among the most expensive states for homeowners insurance, according to NAIC data. The risk of damage from extreme weather, like tornadoes, hail, and hurricanes, contributes to higher premiums in both states.
Which states have the cheapest homeowners insurance rates?
Based on NAIC data, the cheapest states for homeowners insurance include Alaska, Arizona, Idaho, Nevada, and Wisconsin.
