What Your Home Insurance Rate Should Look Like

The factors and determinants that affect your insurance rate and the ways in which your home insurance rate is determined.

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What is a good home insurance rate?

What determines home insurance rates?

How to calculate home insurance rate?

What are typical homeowners’ insurance rates?

Why do home insurance rates go up?

How to find home insurance rates?

How are home insurance rates determined?

What is a good home insurance rate? 

Determining what a good home insurance rate for your home is will depend on a number of things. The main determinant of what is a reasonable home insurance rate is for your home is knowing what your home is worth as well as what your homeowner’s insurance will cover. While choosing your home insurance plan is something completely personal knowing some general facts about the average home insurance rates can provide useful insight into what a good home insurance rate will be. 

  • The average yearly cost of home insurance is $1,585
  • Depending on your state you may have a lower or higher insurance rate
  • Some of the cheapest insurance rates can be found in the states of Hawaii, New Hampshire, Nevada, Vermont, Utah, and Pennsylvania

The most expensive home insurance rates can be found in Texas, South Dakota, Oklahoma, Nebraska, and Arkansas[1]If you are looking for the best possible home rate for your home you will need to contact a number of different companies to see what each company offers and at what rate. Having a pet, a larger home, or requiring higher coverage for your home will all result in you needing to pay a higher insurance rate. The more you require from your home insurance the more imperative it will be that you take the time to get quotes from a number of insurance companies

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What determines home insurance rates?

There are a number of different factors that will affect your home insurance rates to varying degrees. Understanding all of these factors will allow you to better understand why your insurance rate is what it is. 

1. Replacement Cost

Your insurance policy is there to cover all sorts of different mishaps that might occur in your home. These could include partial damages or even complete destruction of your property. What this means is that your insurance policy is there to cover the cost of replacing your entire property if need be. As such there are several factors that will be taken into account when deciding what your insurance rate should be. These include the square footage of your home, construction costs in your area, as well as any special and unique architectural features present in your home. All of these will be used to calculate what the replacement cost for your home will be. 

2. Credit Score 

Having a good credit score can have a very positive effect on determining your insurance rate. Most insurance companies will look at your insurance policy and will try to determine whether you are a low-risk or high-risk investment. If you have a lower credit score, then your insurance company may assume that you will not make timely payments or that you will file more claims than necessary. Therefore, maintaining a good credit score could have a very positive effect on your home insurance rate. 

3. Claims History

Much like the insurance company is likely to check your credit score and credit history, it is also likely to check your claims history. If you have regularly filed claims in the past, then it is likely that the insurance company will view this as a pattern and as such will be less willing to provide you with an insurance plan as they will fear that you will only file more claims. Therefore, when filing a claim, it is always important that you are aware of any potential issues that may be caused in the long run. 

4. Marital Status

Married couples are often given lower insurance rates than those offered to single people. The reason for this lies mainly in the fact that married couples are less likely to file claims and as such, they may be considered lower-risk investments by insurance companies. 

5. Age of Home 

The age of your Home may also mean that you will be called to pay a higher insurance rate. This is because older homes are much more likely to need upgrades. This is especially true if you are looking to replace your electrical or plumbing systems and bring them up to date. For insurance companies, knowing this makes them more likely to give you a higher rate. 

6. Location

Amongst the factors that will affect the home insurance rate that you are given by an insurance company, is your home’s location. If your area is known to have high criminality rates, and damages on properties often occur, you may find that your home insurance rate is higher. This is because the insurance company will view your home as a higher-risk investment, and as such, they will need to charge you a higher rate so as to ensure that they will be able to cover any potential damage. 

7. Pet ownership

If you own a larger dog then you may find that your home insurance company will demand a higher insurance rate for you. This is to cover potential liability claims caused by accidents involving your dog. Normally, such cases are the result of your dog biting or harming someone, who will then file a liability claim against you. Home insurance companies, in an effort to prepare for such cases, will often have you include your dog in your home insurance policy, and at times they may charge you higher insurance rates. 

8. Deductible

When you are choosing your home insurance policy you will be called to decide on a deductible. This amount is normally the amount that you are willing to cover on your own before your insurance company starts covering any of the costs. If you want to lower your home insurance rates, it may be a good idea to examine the possibility of setting a higher deductible amount for your home insurance. [2]

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How to calculate the home insurance rate? 

Calculating your home insurance rate is no easy task. The first thing that you will need to consider is how much coverage you will need for your property and for any structures other than your home that are present within it. Once you have determined the square footage and the number of structures that your insurance will need to cover, you can start asking for quotes. You can also use an online calculator to see what the estimated home insurance for your home may be. This will assist you further in determining whether the quotes that you are receiving are good or overpriced for your home. [3]

What are typical homeowners’ insurance rates?

Typical homeowners’ insurance rates will depend on many different factors. One of the biggest factors that will help you see what typical insurance rates for homeowners is, will be looking at the average home insurance rates in your state and area. While the nationwide average rate for home insurance is around $1,500, that rate could vary widely depending on the state that you are in. It may also be a good choice to check how much home insurance rates for properties of similar size are in your area. This will also help you get an indication of how much premiums in your state and area tend to cost. [4]

Why do home insurance rates go up?

Home insurance rates might go up for a number of different factors. Those same factors that originally were taken into account when your insurance company provided you with your original insurance code will often be reassessed and adaptations will be made to better fit your current situation. What that means is that if you got a new pet dog and you sought to declare that with your home insurance company, your home insurance rates may go up. Another example would be if you have recently filed a number of claims for your home insurance. In most cases failing claims, and especially when those claims are quite substantial, your insurance company may choose to increase your home insurance rates. This is very common, as the more claims you file the more likely, it is that the insurance company will seek to protect themselves from the habitual use of the claim’s procedure, even when that procedure is not necessary. Finally, if you have made any replacements or refurbishments of the property, it is likely that you will find that your insurance policy may go up. This may be because the reconstruction that you took on has led to you having increased amenities and features that were not previously available in your home. As such, the insurance company will need to recalculate what the replacement cost for your property will be, and they are therefore likely going to charge you a higher amount for your homeowner’s insurance. 

Factors that may have an effect on your insurance rates: 

  • Reconstruction
  • Pet ownership
  • Filing Claims
  • Wanting additional home coverage
  • Aging Home
  • Home improvements and home technologies
  • Changes to your deductibles [5]

How to find home insurance rates?

Homeowners insurance is a necessity for any homeowner, but at times it can also be a substantial expense that you will need to budget for every year. With so many different companies offering home insurance policies it may at times seem hard to determine which company is right for you. What’s more requesting quotas may be something that you are unfamiliar with and as such, you may feel lost in your search for the correct home insurance policy for your home. The reality of home insurance is that most often there is no right answer and there is no one company that is right for everyone. Instead, each company will offer specific plans at specific rates to each of its customers. To determine what the best home insurance rates are for you and your home you will need to directly inquire with the home insurance companies that are active in your area. All of these companies will be able to provide you with a quote for their home insurance rates. Once you have collected several different quotes you can begin to compare them. This will allow you to choose the best home insurance rates for your home, and more importantly the insurance rate that will provide the appropriate coverage for your home. [6]

How are home insurance rates determined? 

Home insurance rates are determined by a number of factors, and each company may place varying levels of attention to each of these factors when determining what home insurance rate is appropriate for your case. In most cases home insurance rates will be determined by an examination of the following factors:

1. Replacement Cost: The cost of replacing your home, which is determined by calculating the square footage multiplied by the cost of construction in your area, will determine your home insurance rate. 

2. Credit Score: Having a positive credit score makes you more reliable and as such you will have lower insurance rates and vice versa. 

3. Claims History: If you have a history of habitually filing claims you may find that your insurance rates will be higher because you are considered a higher-risk case. 

4. Marital Status: Married couples often have lower insurance rates than single people. 

5. Age of Home: The older your home is the higher your home insurance rates will be. 

6. Location: If your home is in an area that has a lot of vandalism you may pay higher rates, while if it is next to a fire station you may pay lower rates. 

7. Pet ownership: Owning a large dog may result in higher home insurance rates.

8. Deductible: Having a higher deductible can help decrease your home insurance rates. 


Your home insurance rate is determined in equal parts by your home and your past behaviors. If you are considered reliable you are much more likely to benefit from lower insurance rates. Still, choosing the correct insurance rates for you is not just about money, but it is also about making sure you have all of the coverage you require.


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