Home insurance costs: overview of home insurance policies, coverages, quotes and discounts

Homeowners insurance is a type of insurance policy that protects owners against damage and losses caused by hazards such as burglary, fire, lawsuits against injured visitors, extreme weather, and so on. Your whole life can change in a minute. What if your house suddenly burns down? Or will a once-in-a-lifetime flood or tornado come through to destroy it? You’ll be protected as long as you’re smart about home insurance costs and the policies you choose.

If you already have homeowners insurance, it’s a good idea to review your policy with your financial advisor every year to make sure you still have enough coverage to meet your needs. You can always top up your policy at any time to reflect changes to your home and property, such as remodeling, renovations, landscape changes, and so on.

As with any type of insurance, people take the time to shop around and get different quotes from different companies and compare what is included and the prices. When considering the cost of home insurance, consider the rebuild price rather than the current home value. The material and construction costs of having your home remodeled will likely cost much more than the home’s current value.

Home insurance costs per policy type

Where should you start with the research? Just understand that there are a number of types of insurance policies ranging from an HO-1 to HO-8. Most single-family homeowners find HO-3 ideal, as it is quite comprehensive and provides coverage for most of the “dangers” they face, such as theft, fire, and wind. However, floods and earthquakes are usually not included, so you can add them if you think you need them. Even a small creek can turn into a raging river overnight – don’t underestimate the destruction water can do.

Some banks will even require you to purchase flood insurance if you live in the “flood zone” in order to qualify for a home loan.

How much does home insurance cost? It really depends on factors such as the value of the house, where you live, the crime rate, the size of the property, your own credit history, and so on. People in riskier areas will of course have to pay more. In general, homeowners can expect to pay between $30-$40 per month for every $100,000 in home value. Discounts are available for those who take extra precautions such as getting fire alarms, sprinklers, security cameras, etc.

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The best way to get low home insurance costs and discounts is to go to Lemonade Insurance, where the policy starts “at $25 a month,” and claims pay out quickly.