Most consumers looking for home insurance start with the same question: How much will it cost? The answer, almost always, should be pretty simple. 'It depends.' Because the premiums you'll be charged depend greatly on several factors, including the location and age of the house, how close it is to a fire department or hydrant, your claims history and more.
According to a study released earlier this year by the National Association of Insurance Commissioners, the average annual homeowners premium in the U.S. is $1,034. Those numbers, however, reflect 2012 premiums. That means the numbers could be quite different by now.
HomeownersInsurance.com has developed a way to update these numbers – averaging the lowest quote made per customer in each state for homes where the replacement cost ranges between $190,000 and $330,000.
Following are the seven states in which the average quotes during April deviated the most from the NAIC's average premium and possible reasons for those deviations:
Tennessee: 60% above average
During April, quotes through HomeownersInsurance.com for homes in the Volunteer State averaged $1,655 per year. Why? Homes are a little larger and a little older than the national average, which makes them a more expensive to insure. The number of Volunteer State homes without fire extinguishers languished a little below the national average.
Additionally, tornadoes pose a major threat in the state. According to the Tennessee Emergency Management Agency, the state ranks No. 1 for tornado deaths.
Oregon: 56% below
The HomeownersInsurance.com quotes for April in the state averaged only $450 for a year's worth of standard coverage. Homes are smaller and newer than the national average. The state is not subject to many types of threatening weather.
California: 48% below
The main disaster threats are wildfires, earthquakes and floods; the latter two aren't covered by standard home insurance, so the elevated threat has no effect on quotes. Believe it or not, homes also are smaller than the national average. Add it up and you get average quotes of $539.
Pennsylvania: 37% below
HomeownersInsurance.com quotes averaged $653 in April. Why? For one thing, tornadoes aren't common. More than 98% of homes have smoke detectors, which reduces the threat of costly fires.
North Carolina: 36% below
The Tar Heel State's average quote came in at $658. Despite vulnerability to storms, particularly along the coast, those quotes are relatively low. One thing in the state's favor: Homes quoted there by HomeownersInsurance.com averaged 15 years younger than the U.S. mean.
Washington: 36% below
The average quote for April was $666. Homes quoted by HomeownersInsurance.com were about 5 years younger than the national average. Weather is mild; the major threat comes from flooding, which is not covered by standard homeowners insurance.
Texas: 29% above
In April, the average quote from HomeownersInsurance.com was $1,332 – well above the NAIC average premium. The reason? The Weather Channel has named Texas the most disastrous state in the U.S. – it has experienced 86 presidential declared weather disasters since 1953. Tornadoes, severe thunderstorms and hail all are common there, driving up risks for homeowners.
What does it mean?
Obviously, location plays a huge part in developing home insurance quotes, and there's not much you can do to change that. But that doesn't mean you have to just accept the premium you pay for your policy.
Consumer experts recommend that you shop your coverage at least annually with a number of home insurance providers to make sure you're getting the combination of coverage and price. One thing to remember when shopping coverage is to consider only those companies rated 'Excellent' or better for financial stability by A.M. Best Company.
Companies evaluate risk differently, so you save big by taking the time to look into multiple quotes. They also offer different discounts, which could lower costs substantially. Even if you're paying less than the NAIC average, it's worth the effort to see whether you can do better.
HomeownersInsurance.com is an online resource for homeowners and drivers across the country. Offering comparative automobile and home insurance rates, consumers rely on HomeownersInsurance.com for the most competitive rates from the top-rated insurance carriers in the country. Square One, the HomeownersInsurance.com blog, provides fresh tips and advice on a range of financial topics to help homeowners and homebuyers make educated decisions about their insurance purchases.
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