Congratulations! You bought a home! Now that you've made one of the biggest purchases of your life, it's time to protect it — and all your possessions — with homeowners insurance.
State law may not require you to carry a home insurance policy, but if you took out a mortgage, your lender almost certainly will. It's a smart idea, anyway: In a given year, 1 in 20 insured homes has a claim.
Home insurance policies run the gamut both in how much they cost and what they cover, and the premium you pay for your policy will depend on that coverage, as well as factors including where you live and the state of your credit score.
Keeping in mind that no two home insurance policies are alike, Grow mapped the average home insurance premium for each state, as calculated by the National Association of Insurance Commissioners. The average home insurance premium in the U.S. is $1,251, but the range varies widely by state, from a low of $731 in Oregon to a high of $1,954 in Florida.
It's important to note that the large variation among home insurance policies makes it difficult to calculate definitive averages, so the National Association of Insurance Commissioners also publishes more specific averages for the most common tiers of coverage, from basic fire protection to insurance for properties whose cost to rebuild would greatly exceed their market values.
The map uses data from 2018, the most recent year available.
It should come as no surprise that the location of your home is one of the biggest factors in determining how expensive your premium might be. "If you live in a disaster-prone part of the country, taking steps to mitigate those risks can help you save on premiums," Loretta Worters, a spokeswoman for the Insurance Information Institute, recently told Grow.
More than a quarter of states offer financial incentives, in the form of insurance discounts or tax breaks, to homeowners who take steps to limit the potential damage of disasters, according to disaster mitigation nonprofit Smart Home America. Those fixes can include storm shutters to protect against hurricanes or swapping your lawn for hardscaping to help protect against wildfires.
Mississippi homeowners, for example, save up to 30% on their home insurance premiums if they install a roof that complies with IBHS' "Fortified" construction standards. And Louisiana residents can qualify for up to $5,000 in tax deductions for installing state-approved home retrofits.
You may need more coverage than provided under your standard homeowners policy, and that could add to your costs. For example, homeowners policies specifically exclude flooding. "What we might call top-down flooding — from a leaky roof or a busted pipe — you're covered for that," Worters says. "But water that comes from the ground up isn't covered under a standard policy."
If you want coverage, you'll need to purchase a separate flood policy, either through the government-sponsored National Flood Insurance Program or from a private insurer. Premiums for flood policies average about $58 per month, according to FEMA.
Video by Richard Washington
A policy can provide peace of mind, though: Just an inch of water can do more than $10,000 of damage in a 1,000 square foot property. In 2019, the average residential flood claim paid by the NFIP was $52,000.
Damage from earthquakes is much less common than damage from flooding, but it is also not covered by a typical home insurance policy. Most policies in California — the highest risk state for earthquakes — are provided by the California Earthquake Authority, and annual premiums can run anywhere between $500 and $1,000.
Keep in mind that no two insurers are the same. If you find yourself wondering whether you're paying more than average, talk to your insurance agent and consider shopping around for a cheaper policy.
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