{"id":722,"date":"2023-10-19T14:53:56","date_gmt":"2023-10-19T14:53:56","guid":{"rendered":"https:\/\/businessyield.com\/ins\/?p=722"},"modified":"2023-10-19T14:53:57","modified_gmt":"2023-10-19T14:53:57","slug":"how-much-does-homeowners-insurance-cost","status":"publish","type":"post","link":"https:\/\/businessyield.com\/ins\/home-insurance\/how-much-does-homeowners-insurance-cost\/","title":{"rendered":"How Much Does Homeowners Insurance Cost?"},"content":{"rendered":"

Homeowners insurance (also known as home insurance) is not just a luxury; it is required. A necessity. This is because not only does it protect your home and possessions against damage or theft, but virtually all mortgage companies require borrowers to have insurance coverage for the full or fair value of a property (usually the purchase price). They won’t make a loan or finance a residential real estate transaction without proof of it.<\/p>

What’s more, you don’t even have to own your home to need insurance; many landlords require their tenants to maintain renter’s insurance coverage. And whether it is required or not, it is smart to have this kind of protection.<\/p>

What Is Homeowners Insurance?<\/strong><\/span><\/h2>

Homeowners insurance is a form of property insurance that covers losses and damages to an individual’s residence, along with furnishings and other assets in the home. Homeowners insurance also provides liability coverage against accidents in the home or on the property.<\/p>

A homeowners insurance policy usually covers four kinds of incidents on the insured property: interior damage, exterior damage, loss or damage of personal assets\/belongings, and injury that occurs while on the property. When a claim is made on any of these incidents, the homeowner will be required to pay a deductible, which in effect is the out-of-pocket costs for the insured.<\/p>

Every homeowner’s insurance policy has a liability limit, which determines the amount of coverage the insured has should an unfortunate incident occur. The standard limits are usually set at $100,000, but the policyholder can opt for a higher limit. <\/p>

In the event that a claim is made, the liability limit stipulates the percentage of the coverage amount that would go toward replacing or repairing damage to the property structures, personal belongings, and costs to live somewhere else while the property is worked on.<\/p>

Acts of war or acts of God such as earthquakes or floods are typically excluded from standard homeowners insurance policies. A homeowner who lives in an area prone to these natural disasters may need to get special coverage to insure their property from floods or earthquakes. <\/p>

However, most basic homeowners insurance policies cover events like hurricanes and tornadoes.<\/p>

What a homeowner’s insurance policy provides<\/strong><\/span><\/h2>

Although they are infinitely customizable, a homeowner’s insurance policy has certain standard elements that provide what costs the insurer will cover. These include:<\/p>

Damage to the interior or exterior of your home<\/strong><\/span><\/h3>

In the event of damage due to fire, hurricanes, lightning, vandalism, or other covered disasters, your insurer will compensate you so your house can be repaired or even completely rebuilt. Destruction or mutilation from floods, earthquakes, and poor home maintenance is generally not covered and you may require separate riders if you want that type of protection. <\/p>

Freestanding garages, sheds or other structures on the property may also need to be covered separately using the same guidelines as for the main house. <\/p>

Clothing, furniture, appliances, and most of the other contents of your home are covered if they’re destroyed in an insured disaster. You can even get “off-premises” coverage, so you could file a claim for lost jewelry, say, no matter where in the world you lost it. There may be a limit on the amount your insurer will reimburse you, however. <\/p>

According to the Insurance Information Institute, most insurance companies will provide coverage for 50% to 70% of the amount of insurance you have on the structure of your home.<\/p>

Personal liability for damage or injuries<\/strong><\/span><\/h3>

Liability coverage protects you from lawsuits filed by others. This clause even includes your pets! So, if your dog bites your neighbor, no matter if the bite occurs at your place or hers, your insurer will pay her medical expenses. <\/p>

While policies can offer as little as $100,000 of coverage, experts recommend having at least $300,000 worth of coverage, according to the Insurance Information Institute. For extra protection, a few hundred dollars more in premiums can buy you an extra $1 million or more through an umbrella policy.<\/p>

Hotel or house rental while your home is under repair<\/strong><\/span><\/h3>

In the unlikely event that you find yourself forced out of your home for a time, this part of insurance coverage, known as additional living expenses, will undoubtedly be the best coverage you ever purchased. It will reimburse you for the rent, hotel room, restaurant meals, and other incidental costs you incur while waiting for your home to become habitable again. <\/p>

However, before you book a suite at the most expensive hotel and order caviar from room service, keep in mind that policies impose strict daily and total limits. Of course, you can always expand those daily limits if you’re willing to pay more in coverage. <\/p>

How much is homeowners insurance?<\/strong><\/h2>

The average cost of homeowners fluctuates depending on where in the country you live. People in states that have a higher number of claims\u2014due to catastrophic weather, high crime rates or elevated costs for repairs\u2014will see higher prices for home insurance.<\/p>

Homeowners insurance costs $746 per year with Progressive for a policy with $350,000 of dwelling coverage. Progressive has the cheapest average annual cost for homeowners insurance across the dwelling coverage limits of $200,000, $350,000, $500,000 and $750,000.<\/p>

Travelers is the most expensive homeowners insurance company for $200,000 and $350,000 dwelling amounts. Shelter is the most expensive home insurer for the $500,000 and $750,000 dwelling coverage amounts.<\/p>

Rates vary significantly among companies because they each have their own formulas for pricing. That means it\u2019s vital to comparison shop homeowners insurance quotes when buying a policy. You don\u2019t know which company will offer you the best rates\u2014and possibly save you hundreds of dollars\u2014until you shop around.<\/p>

Types of homeowners insurance<\/strong><\/span><\/h2>

All insurance is definitely not created equal. The least costly homeowners insurance will likely give you the least amount of coverage, and vice versa.<\/p>

Several forms of homeowners insurance have become standardized in the industry; they are designated HO-1 through HO-8 and offer various levels of protection depending on the needs of the homeowner and the type of residence being covered.<\/p>

To better understand how the different types of home insurance work, it\u2019s important to know how they\u2019re set up. A \u201cperil\u201d is an incident or problem that causes damage to your home, yourself, or your belongings. Generally, there are two ways coverage is explained in a policy\u2014open peril and named peril:<\/p>