How Much Does Homeowners Insurance Cost?

No matter how safe and secure youhome-insurance-1024x576 feel in your home, it’s a fact of life that bad things can happen at any time—floods, fires, vandalism, theft. And that’s why homeowners insurance is a must. But how much does it cost? The average annual premium runs about $952, but a bunch of unique factors can go into calculating a specific quote, and that information could help you get a lower rate in some cases.

Age and Condition of Your Home: This includes everything from the roof to its pipes, heating system, and electrical wiring. For instance, the lead and galvanized pipes sometimes found in older homes can “result in higher premiums as they are more prone to cracks or leaks than the copper and plastic piping used in newer homes,” says Rosemary Campbell, a 30+ year veteran agent at Cheney Insurance, our sister company also located in Damariscotta, Maine.

Price to Rebuild Per Square Foot: Since homeowners insurance claims often require rebuilding whatever part of your home damaged by fire, smoke, or other covered peril, most insurance policies factor in the price per square foot to rebuild in your area based on current construction rates. While the national average is $95.51 per square foot, the overall cost of policies can differ drastically. It’s important for your agent to do a reconstruction cost estimate to ensure “the proper rating for building materials,” says Suzanne Strachan, Support Team manager at Cheney Insurance. While most policies pay replacement cost (the cost to rebuild a home), some pay only the depreciated current value for the whole house.

Probability of Insurance Claims in Your Area: “If your home is located in an area prone to tornadoes or forest fires, you’re going to have a higher premium due to a greater risk of damage,” says agent Kate Dunstan. In other words, the more known risk there is to your home, the stiffer the premium. For example, the annual cost of insuring a home in Louisiana is $1,722—the nation’s highest due to the claims filed after Hurricane Katrina. (The state with the lowest price: Idaho, averaging just $534.) Since every standard policy excludes coverage for natural disasters like earthquake and flood, be sure to check with your agent to see if you need the extra coverage. 

Your Credit Sore, Age, and Other Personal Info: You—yes you—also factor into how much you’ll ultimately pay in homeowners insurance. According to Brittany Carter of the Business Insurance team at Cheney Insurance, everything from your credit score, marital status, age, level of education attained, and frequency of claims submitted on prior insurance policies will increase or decrease your rate. Also, a home with a swimming pool, trampoline, or certain other “fun” features signals risky business to an insurance company—and your price quote will reflect that. Same goes for homes with pets or farm animals that could be dangerous (such as large dogs or horses).

Increasing Home Prices: Inflation or the increased value of your home in an upmarket may cause your premiums to increase each year. You may be able to snag a discount if your home has a nifty feature that an insurance company may find attractive like storm shutters, security systems, or carbon monoxide detectors. If your home doesn’t have these, consider upgrading. “Installing a security system for $30 per month may reduce your premiums by at least that amount—and provide additional safety for your family at the same time. 

The friendly agents at Cheney Insurance are happy to answer your insurance questions any time, just reach out to them at 207-563-3435. Tell them Newcastle Realty sent you!