Home Insurance quotes are more volatile than most people understand. A number of factors affect how quotes are delivered – the location of the home, its size and age, and even the homeowner's credit score can change how much he or she could pay for home coverage.
During the second quarter of 2015, quote seekers in some states who contacted HomeInsurance.com and its sister online marketplace HomeownersInsurance.com found both increases and decreases from first-quarter quotes.
Following are four states in which the average quote increased the most during the second quarter:
- The average quote in Tennessee jumped the most of any state, about 13.7%, to $1,624.
- Minnesota quotes escalated the second most – 4.7% - to $1,143.
- South Carolina quotes went up 4.6% to $835.
- Illinois quotes took a 4.4% hike to $826.
While quotes climbed in those states, they didn't in every state. Following are states in which the average quarterly quote decreased during the period:
- Pennsylvania averages fell the most – 2.3% - to $638.
- New Mexico quotes dropped 1% to $681.
- California's went down 0.2% to $538, and North Carolina's fell the same amount to $664.
The average premium across the U.S. is $1,034 for a year's worth of coverage, according to the National Association of Insurance Carriers. For more about average quotes, including which states have recorded the greatest disparity from the national premium average, see the HomeownersInsurance.com insurance rates page.
What's the cause of the disparity among the states? The major factor is the location of your house, which affects its risk and its replacement cost.
How location affects risk
One of the major factors governing a home insurance quote is the amount of risk assigned to a particular home. Homes along the East Coast can be vulnerable to hurricanes, for example, so they can cost more to insure. The same is true in Tornado Alley – locations in Kansas, Oklahoma and Texas are much more expensive to insure.
The other way location impacts quotes is in calculating the amount of dwelling coverage you need to purchase. Dwelling coverage is that portion of a home insurance policy that protects the structure of your home. The bulk of your premium goes toward this coverage.
Homeowners should purchase enough dwelling coverage to rebuild their homes from the ground up should they be destroyed by a covered peril such as fire or wind. The amount can differ greatly from the amount you pay for a home.
So how do you know much dwelling coverage you need? One way to get a rough calculation is to multiply the square footage of your house by local building costs per square foot – then adjust for upgrades you might have made to the home. Online dwelling coverage calculators can help with this estimate.
Even within a state, quotes can vary greatly. Many other factors go into a quote – the age of the roof and electrical and plumbing systems, for example. Knowing how you can reduce your risk with these will help you lower your quotes.
Arthur Murray writes for HomeInsurance.com, an online resource for homeowners and drivers across the country. Offering comparative automobile and home insurance quotes, consumers rely on HomeInsurance.com for the most competitive rates from the top-rated insurance carriers in the country. The HomeInsurance.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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