What Is The Average Cost of Homeowners Insurance?

Mar 2, 2021 | Personal Insurance

Law of Averages

In a nutshell, the average cost of homeowners insurance in Denver, Colorado plays at around $1200 and up. This same home insurance premium varies from state to state due to laws and regulations, as well as other factors.Now, how do you determine if what you have is enough or just right for you?

(If) The Price Is Right

Do you still remember the excitement you felt when you purchased your new bag? How about your new car? Now that you finally have your own house, you sure are very happy and again, excited right? 

Finding the best Homeowners Insurance that best fits your needs is the next big step that you need to do after having your new home. This decision is very important to make sure that you will not be over or underinsured. So no matter how excited you are, be certain that you will take your time in knowing the right home insurance for you. 

This year 2021, the average cost of Home Insurance here in the United States is $1,450 per year. But of course, each state has different coverages and factors that can affect the rates. We will talk about that detail by detail but first, here are the three standard coverage of home insurance: 

Standard Homeowners Insurance Coverages 

  • Dwelling coverage – This coverage protects your home’s structure. It includes your house’s interiors like floors, ceilings, walls, built-in structures, and attached appliances. In addition to that, it also covers different types of perils such as fire, hail, vandalism, and theft. And most of all, this coverage will help you rebuild your home from the ground in case of a total loss. 
  • Personal liability – It is the coverage that will help you against lawsuits. For example, a guest was injured inside your property and decided to file a lawsuit against you. If proven that it is your fault since the guest got the accident from the slippery floor or anything as a result of your negligence, then their medication will be all covered as well as the fees for the lawsuit. Moreover, damage to your property from a qualified accident is covered as well. 
  • Contents coverage – or personal property coverage that protects your personal belongings. That is why declaring all of your possessions from the most expensive ones to the least stuff is vital. However, if you happen to have over-the-top jewelry, collections of let say guns or fur, you better ask your insurance agent about adding extra coverage or umbrella policy to your insurance.

Factors that can affect the amount of your Homeowners Insurance

Location

The location where you are living can tremendously affect the rates of your home insurance more than you think. Houses that are in peril-prone areas generally have more expensive home insurance. This is just very understandable when insurers raise the premiums of the houses that are living in the hurricane, windstorm, tornadoes, and other natural disaster-prone areas. Some insurers need to pay millions of dollars and sometimes even billions to rebuild homes after damages from a qualified peril. So if ever that you are living in these kinds of areas, make sure to look for options of how to lower your premiums through discounts. 

Another thing about the location is the type of neighborhood you are living in. If you are living in a rural area, your premiums will be lower than those who are living in urban areas. This makes sense because the more crowded a place is, the more it is prone to many types of accidents and crimes. Theft, vandalism, and riots are just some of the examples of the things that urban areas are most prone to. On the other hand, if you are living near any fire or police station, your premiums might be lower since help from these officers can save your house in case of trouble. So, next time that you are going to look for a house or if you are just about to shop for one, you already know what to look for. 

The amount of your house, the age, the type, and renovations

This rule is very familiar to anyone who already has a car. Because this is just the same as your car insurance. The more expensive and high-end features your car is, the higher the premiums. Also, older cars are more likely to have severe damages that is why their insurance should cost more, which is the same thing that applies when it comes to your house. 

  • The amount of your house – Your insurance should be enough to build your house the same as before in case of a total loss. This means that if the amount of your house and personal property is too expensive, the rate of your home insurance must be expensive as well for you not to be underinsured. But if the amount of your home is on average, then you might have an average insurance rate as well considering that you are not leaving in a peril-prone or crowded area. 
  • Age – Brand new houses tend to have an average amount of home insurance. This is because newly built homes have a very low rate of having records of claims. It is like buying a brand-new tv. How often will you have problems with your new television than your old ones? The same goes for your house. If you bought an old one, chances are there are lots of things that need to be fixed. For example, old pipes in the basement, roofs, and possible leakage. These things will be checked by your insurance provider to calculate the amount of your
  • home. So before you buy a house, be vigilant in checking these crucial parts and make sure to have them fixed first. 
  • Type of house – The type of the house and construction are also factors that can affect your house’s value. Like a custom-built home, or do you hire a professional interior designer to decorate it. Also, take note if your house might be a historical house or a victorian house. Because this will affect the value of your home. 
  • Renovations – Any upgrades can add to the cost of your house. An additional feature to your living room like a cozy fireplace for example or changing your kitchen floor from tiles to high-end wood tile. These changes should be declared to ensure that your house’s value will not be miscalculated. Having the right amount of your house is very important so that you will not be underinsured. 

Tips that can lower the rate of your Homeowners Insurance 

Bundling 

You might get some discounts if you are going to bundle your home insurance and car insurance provided that you have both in one company. This strategy will not only save you money but also good points as a loyal customer to your insurance provider. This is because insurers generally want to keep those clients that are loyal to them. 

Home Safety Features

And again, just like your car insurance. The more safety features you have in your car that can prevent damage due to accidents and theft can lower your premiums. The same rules go with your home insurance. If you have alarms, cameras, and authentication locks installed in your house, the chances of having lower premiums are high.

Although remember, not all insurance providers have the same rules and rates. Hence, talking to your trusted insurance agent is a must to know all the options that you have so you can save. 

Choose higher deductibles to lower your premiums

Deductibles are the amount that you need to pay before the insurance kicks in. So if you can pay more money out of your pocket then you can do this tip. Anyway, your insurance will cover that money once you file your claim, so if you are able, this strategy can be no harm. 

Credit History

Some insurers used a credit-based “ insurance score “ to assess how much will be your premium. Meaning, they will check your payment history and debt if you have any. These can affect the amount of your insurance. That is why making sure to always pay your bills on time is essential in the case that your insurer happens to use this rule. 

Claims History

Claims history of you or the claims history of the previous owners of the house will count. This information will give the insurers some hints on what kind of a client you are. If you are the type who file claims in every problem you encounter, then that can be a bad record for you. Also, this will give them some tips if your house has many existing issues even from the past.

That being said, if ever that you are the first owner of your house, make sure not to file claims in every small problem that you may encounter. If you can fix it, like for example a broken glass in the window. This easy to fix kind of problem can be solved without filing a claim. Make your claims history as good as possible to have lower insurance rates. 

Bottomline

Having the right policy that will cover your needs is what’s important. Given all the factors that can contribute to the rate of your home insurance, it still depends on you if you can lower your premiums more. 

Homeowners Insurance in Denver, Colorado, and many parts of the U.S. have different rates depending on the company. But don’t fret! Because our team can provide you the information that you need to ensure that you will have the best insurance that is just right for you. Contact us today! Our agents are always willing to help!