According to Zacks Investment Research, the average American pays 2.24 percent of their income each year for homeowner’s insurance. However, these costs can vary widely, which means you could pay much more or less, depending on several factors.
Before covering your expected monthly costs, though, let’s quickly recap what some of these factors entail and why they’re essential when calculating your home insurance rates.
Summary: Which Factors Affect Your Monthly Home Insurance Costs?
While the number from Zacks represents a good starting point, the fact of the matter is that no “average” American homeowner actually exists, since every insurance rate is based on a specific—and unique—set of criteria. In other words, everyone will pay a different amount for their home insurance.
Here’s a shortlist of just a few of these factors:
- Regional weather patterns, including the propensity for natural disasters like flood, earthquake, tornado, and hurricane
- Crime rates, including city and neighborhood
- Proximity to the nearest fire department and coastline
- Age and condition of your home, including roof
- Your home’s construction quality
- Homeowner’s losses within the past five years
- Your insurance score
Bankrate.com points out that even seemingly inconsequential factors like the consumer protection laws in your state can impact what you pay for homeowner’s insurance. And of course, the coverage amounts you choose will also play a significant role in what you pay per month.
Related: How Much Home Insurance Do I Need?
With these details in mind, let’s address the core question in the next section.
What’s the Average Home Insurance Cost Per Month?
According to Zillow, “In very broad terms, [you can] expect to pay about $35 per month for every $100,000 of home value.” Therefore, if you have $300,000 in coverage, you might expect to pay about $135 per month.
Based on what we just learned, though, we know that these costs can vary widely. For example, in the Bankrate article cited earlier, they found that—with $300,000 in dwelling coverage, $300,000 in personal liability coverage, and a $1,000 deductible—the average for home insurance across all 50 states was $2,299 (New Mexico). Or, about $191 per month.
Comparatively, Louisiana residents paid 42 percent higher home insurance rates at $3,270 per year or about $272 per month. Texas was slightly more at $285.75 monthly, whereas Oklahoma residents paid nearly twice as much as those in New Mexico at $4,445 annually. This number works out to roughly $370 per month, or 93 percent higher than the national average!
Here’s a quick table outlining these numbers:
|State||Annual Premium||Monthly Payment||+/- Nat’l Average|
When Bankrate reduced coverage to $200K for dwelling, $100K for liability, and $1K for the deductible, the average annual premium decreased to $1,806.
Increasing coverage A to $400K and liability to $300K raised the average home insurance premium to $2,709, or nearly $1,000 more per year/$83 per month.
Other Than Monthly Cost, What Else Should You Consider About Home Insurance Companies?
When it comes to home insurance, it’s easy to focus solely on the price. Specifically, paying as little per month as possible. However, based on our decades of combined experience, the team at IHS Insurance Group has learned that it’s not just about the bottom dollar.
While the price could be a great starting point, you’ll also want to consider each company’s financial rating as reported by AM Best and Standard and Poors, which relates to their ability to pay claims. In general, you’ll want to focus on companies rated A- or better.
Furthermore, you’ll also want to explore each home insurance carrier’s online customer feedback. After all, what others experience could be a good indication of what you’ll encounter as well. JD Powers’ annual survey is an excellent resource in this regard.
Find Out More About What You’ll Pay Per Month for Home Insurance
Keep in mind that a few dollars per month could translate into a difference of thousands of dollars in coverage and, potentially, more money out of your pocket in the event of a claim when it comes to homeowner’s insurance.
Need help figuring out what you’ll pay per month? The professionals at IHS Insurance Group are standing by to learn more about your needs, help you determine sufficient coverage amounts, and then walk you through choosing a carrier that meets your needs—including your budget!
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