How much does home insurance cost?

How Much Does Home Insurance Cost — and What Does It Cover?

Home insurance seems to be a low priority for new homeowners, but adopting that mindset could be a serious mistake. Because of costs related to home insurance and the reasons homeowners need insurance in the first place, you're going to want to protect yourself and your assets.

How Much Does Home Insurance Cost?

New home buyers can expect to tack on $1,200 to the cost of a new home in the form of proper home insurance. That cost depends on several key factors including the age and price of the home, the amount of cash put down via a down payment, and the state or municipality where the home is located. Since real estate is primarily about location, where you buy your new home largely dictates how deeply you'll have to dig in your pocket for home insurance payments.

• Age and price of the home
• Amount of cash put down via a down payment
• State or municipality where the home is located

Homeowners in Louisiana face the highest home insurance rates in the U.S., at $1,958 (on average) per year. Compare that to $677 in Oregon or $692 in Utah.

What Does a Typical Homeowners Policy Cover?

That's why it's important a shopper should get at least three quotes because costs and coverages will vary from carrier to carrier. The idea is for shoppers to compare different rates from different companies, and the best way to accomplish that is by going online.

To get the best home insurance policy at the best price, DiBugnara advised asking — and answering — three key questions before signing on the dotted line:

1. How much insurance coverage do you actually need?
2. What exactly does that coverage protect me from happening?
3. How much of a deductible should I take and still be safe?

What Type of Home Insurance Coverage Do You Need?

"Just like auto insurance, there can be great variance in the cost from one home insurance company to another. In many cases, people have paid less attention to their home insurance cost since it is often included in the escrow payment portion of the mortgage."

— Jeff Zander, Founder of Zander Insurance, Nashville, TN

"For most people, a home is their greatest asset, but the bank is only concerned about getting them their money and not about any of their contents, personal property, or liability risks that arise from owning a home."

— Jeff Zander, Founder of Zander Insurance, Nashville, TN

Homeowners looking for quality home insurance at a decent price also need to make a distinction between covering select risks or covering all risks.

"Don't cut corners when purchasing home insurance. Consumers often look at the lowest price as opposed to what they are getting for that price, only to find out certain coverages they thought they have were not included on the policy."

— Orlando Frasca, Insurance Specialist at Rogers Insurance Services, Danville, CA

Originally published on TheStreet by Brian O'Connell · November 7, 2024.