Your home is likely your most expensive asset, and protecting it can be pricey.
So, how much does homeowners insurance cost?
The short answer is: It depends.
Chris Zuppa/The Penny Hoarder
When Insurance Falls Short…
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There are three basic types of coverage that determine how much you will receive after a covered disaster.
A lot of people think, Im covered.
My mortgage company says Im covered, they dont require me to do anything further.
I dont want to pay more for insurance.
What Determines Homeowners Insurance Cost?
Location is a key to figuring out how much homeowners insurance costs.
Premiums vary widely by state, mainly because of underwriting costs, repair costs and laws.
Each state also has different requirements for policies, so comparing costs among states isnt easy.
Population density, construction costs, andareas popular with retireesand vacationers often have higher premiums.
The condition of the home is important.
Did you maintain it?
How old is it?
What materials did builders use?
What is the condition of the roof?
Wind and hail seem to be the biggest problems for insurance companies in most states, Peterson said.
Many companies are limiting coverage on older roofs and/or requiring higher deductibles for wind and hail.
The companies often consider:
Location of the home within the city is also important.
How close is the nearest fire hydrant for the fire department?
How about proximity to a fire or police station?
The neighborhood, claims history and crime rate in the area can also make a difference in rates.
Adding endorsements to cover particular conditions to the policies can also impact rates.
One of the biggest liability claims is dog bites, he said.
Homeowners insurance and liability coverage would extend to kids and pets.
Shopping around can save you some money.
We always recommend when you shop for any punch in of insurance, get multiple quotes, Friedlander recommended.
You want to compare apples to apples and ensure youre looking at the same throw in of coverage.
Drowning in Expenses?
Maybe youre scrambling after your car broke down.
Or you got a medical bill you werent expecting.
Or inflation has finally pushed your budget over the edge.
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But keep in mind, there is no such thing as a freebie.
While doing these things may lower your premiums, they will also probably cost you money in other ways.
Some policies also have different deductibles for different perils.
Peterson said making some additions or repairs to your home might also lower premiums.
Those additions and repairs can include:
If renovating, plan ahead and use safer materials.
Friedlander said loyalty can also matter.
If you have been with the same insurance company for many years, they might offer you a discount.
Another way to save is to be savvy about filing claims.
Your homeowners insurance is not a maintenance plan.
Also, dont file too many claims in a short period of time.
Check for discounts through your credit or trade union, employer, association memberships, etc.
Your age or marital status may also entitle you to a discount.
Peterson also recommended reviewing your existing policy annually.
Inflation is also impacting the cost of insurance.
Friedlander also recommends looking into a flood insurance policy because homeowners policies dont cover flooding.
Only4% of U.S. homeownerscarry flood insurance, but90% of natural catastrophesinvolve flooding.
Regardless of where you live, you should consider purchasing flood insurance for adequate financial protection.
He also suggested looking for a company that has a record of prompt claims response.
Find out who handles claims and whether they are licensed adjusters or something like a third-party call center.
Financial security is more important than price.
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