How Much Does Homeowner’s Insurance Cost?

Your home is single-handedly one of the most precious investments. It’s not just the materials of the home that make it valuable, it’s everything in it. From the sweet handmade gifts from your kids, to the several DIY home improvement projects, you want everything protected and safe. We don’t like to admit it, but we’re never safe from any unforeseen event like theft, vandalism, or acts of mother nature. The best we can do is to be prepared.

That’s where homeowners insurance comes in. But how much does it cost? While Arizona insurance policyholders are paying about $695 per year – a whopping 27% less than the national average, there are several factors that go into calculating the cost of your homeowners insurance policy.

Age and condition of your new home

Brand new homes have more reliable electrical and plumbing, as opposed to older homes whose pipes are more prone to leaks and cracks. Unless an older home has undergone significant foundational renovations, it’s safe to say that the insurance premiums will be higher than coverage for newer homes.

Price to rebuild, per square foot

Given that insurance claims typically require a section of the home to be repaired or rebuilt, insurance companies must factor in how much it will cost to repair or rebuild your home. They do this by determining the cost per square foot of your home. How? The current construction costs in your area influences the price per square foot of your home.

It’s important to understand the extent of which your insurance covers. While most cover the cost to rebuild, some may only cover the depreciated current value of your home. It’s worth asking.

Probability of insurance claims in your area

If your home is located in a disaster-prone area, you can expect higher premiums due to a higher risk of damage. For example, the average annual homeowners insurance policy in hurricane-prone Florida is about $1,991, the highest in the nation. (Just for fun, Idaho is the cheapest.)

It’s common for standard homeowners insurance policies to exclude coverage for certain natural disasters such as flooding or earthquakes. Be sure to talk with your agent if you’re in an accident-prone area. In Arizona, flooding and fires are the most common natural disaster insurance claims, so make sure you’re covered.

 

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