To estimate your home insurance premium, start by considering where you live and how much coverage you need.
You’ll also need homeowners insurance when you buy a house. And while it isn’t your biggest expense, how much you pay for insurance will impact your home ownership costs.
The national average cost of home insurance is $1,631 a year, according to NerdWallet’s 2020 rate analysis. The amount you pay for your insurance can vary greatly depending on many factors. Here are some ways to get an idea of how much your home insurance may cost.
How to calculate your home insurance
You can use the calculator to calculate the average for your ZIP code or you can follow the steps below.
Decide how much coverage is necessary
A typical homeowners insurance policy includes six components, and the amount of coverage you want for each type will help determine your overall premium. These are the six types:
- Dwelling is a policy that covers damage to your main home structure.
- Other structures: This covers structures that are not attached to other structures such as sheds or fences.
- Personal property is your personal belongings.
- If you have to temporarily move while your home is being fixed, additional living expenses may be required.
- If you cause injury or property damage to another person, you are liable.
- Medical payments are for the treatment of someone who is injured on your property, or if you or a family member have hurt someone else.
You will typically need sufficient dwelling coverage to cover the cost of rebuilding your entire home.
Many of these may be calculated as percentages of your dwelling coverage — typically 10% for other structures and 50% to 70% for personal properties, and 20% for additional living costs. The minimum liability coverage is usually $100,000, but it can go higher depending on your needs. The limit for medical payments coverage is typically between $1,000 and $5,000.
Choose your insurance deductible
Your insurance deductible is the amount you pay out of pocket for a covered claim before insurance kicks in. The typical homeowners insurance deductible is $500 to $2,000
Your premium will be lower the higher your deductible.
Other factors should be considered
The cost of insurance will be affected by the physical characteristics of your house. This includes its age, roof condition, and compliance with current building codes. Additional liability coverage will be required for swimming pools.
Location can also play a significant role. Insurance companies may consider factors like the safety of the local fire department and the proximity to the coast.
You might consider adding supplemental coverage
Standard home insurance policies do not cover damage from floods or earthquakes, but separate coverage may be available for these and other home insurance exclusions. Additional coverage may be required if your home is at high risk.
Get a quote
Many insurers offer tools that allow you to estimate the cost of your home insurance. Although these tools require a small amount of information, they can give you an idea of the potential cost of your home insurance. You can also request a quote by clicking the button above.
