How Much Does Home Insurance Cost?

How much should I be paying for homeowners’ insurance? What factors play a role into how much it costs? In this article, we will give a brief overview of 7 factors that can affect how much you should expect to pay for your home insurance policy.

Washington State Homeowners Insurance Prices to Expect in 2021

In 2020, Washington State homeowners paid an average of about $1,000 a year for their home insurance premiums. For comparison, the national average of homeowners’ insurance sits around $1450 per year. The most expensive states for homeowners are Kansas, Oklahoma, Texas, and Nebraska where premiums were upwards of $2,500 per year all the way up to $3500 per year. These rates will not only vary by state but by your city and zip code as well. It’s important to understand that how much you pay for homeowners’ insurance is dependent not just on your location but many different factors.

7 Factors That Can Affect How Much You Pay for Home Insurance

  1. Location
  2. It is important to know that insurance companies look at the ability to extinguish a fire when determining rates. Based on your address, it will be rated on things like, how far the house is from the nearest fire hydrant and the nearest fire station. It is also taken into consideration if the fire dept is a volunteer station only or not. Generally, what you will see, is that the more rural you go, the higher you will you have to pay for home insurance since you will most likely be further away from a fire hydrant or fire station.

  3. Age of the home
  4. The older the home, the more considerations that must be taken into account in terms of rating. Older, vintage homes built in the 1900s, can be more expensive to rebuild in the event you have a catastrophic loss compared to a newer home. Conversely, older homes that the prior owner did not properly maintain can cause the new buyer a host of issues. The newer homes often get a new home discount that can help the rate quite a bit. As you can see many factors in relation to the age of the home can come into play. If you’re thinking about purchasing a new home or have recently become a new homeowner, make sure you keep reading to learn more about the different factors that may impact how much you pay for homeowners’ insurance.

  5. Size
  6. Generally, the larger and more square footage a house has the more expensive it will be to rebuild it. As a result, this will most likely mean you will have to pay more for home insurance.
    How much you paid for the home isn’t really a concern in terms of determining how much coverage to buy. It is more important that we understand the features and details of the home to help determine what it would cost to rebuild it. A house on one side of the street could have a panoramic ocean view and the purchase price will reflect that. Take the same house and put it on the other side of the street with no view and those two houses will cost the same to rebuild. Again, most important thing is we understand the home itself and the details of it to get the right value. The insurance company is going to want to know what it’s going to take to rebuild the home (your home’s replacement cost) which your rate will reflect.

  7. Claims
  8. If you’ve had a claim on renter’s insurance or another home, there’s potential that it can affect how much you pay for insurance up to 3 years. An important point to know if you’re buying a new home is that the claim follows you, not the house. So, if the previous owner had a claim, it might show up in the claims history report, but it should not affect your insurance rate. Although, it may require some conversation with your agent.

  9. Flood Insurance
  10. In Washington state, we are starting to see more and more areas put into what is called the 100-year flood zone. If your house is near a river or lake, your mortgage lender may require that you have flood insurance, depending on where your house sits (the elevation of the house relative to the water source and the flood plain). The cost of flood insurance can range anywhere from $500 per year all the way up to thousands per year. If you’re purchasing a home that requires flood insurance, this is an important factor that you need to be aware of.

  11. Coverages
  12. Insurance policies can be like fingerprints – no two are exact. While there are similar things on most policies there are lots of variables as well. You might have certain collectible items, such as a wine, art or gun collection, or maybe you have some items you’d like additional protection on such as a wedding ring or other jewelry that you may want to insure. There are different coverages that insure these types of items and may be of interest to you depending on what you feel is necessary to protect you, your family, and your home. The individual coverage limits you select will pay a significant role in how much your homeowners’ insurance policy will cost.

  13. Credit / Insurance Scoring
  14. A frequently asked question we get a lot is if your credit rating will change your insurance rates. Many insurance companies use an “insurance score” system. One of the factors that goes into this score, in fact, is your credit history. Another factor can be how long you’ve stayed with your insurance company over time. While there are additional factors as well, it isn’t data that is shared with too many people outside of the company and the insurance commissioner. When a company sets a “rate” it goes through an extensive process review and justification by the State of Washington. This process can take a year or more as they will have to “prove” the need for the rate to the Commissioner’s Office. While we never know what changes are on the horizon as far as rating, right now we do know that your credit score for sure affects your rate.

While all these factors are extremely important to consider and be aware of, they are just a few of many other elements that can impact the price you will pay for a home insurance policy. If you have any additional questions or concerns give us a call or send us an email! We’re happy to help with all of your insurance needs.

How Much Should I Pay for Home Insurance?

Most of us would agree our number one concern is what happens if you need to file a claim. How fast is claim response? Do I have enough coverage? Did I buy the right coverage? These are all quite common worries that might flash in your mind. Of course, most of us want to spend our dollars wisely, so you are likely to also be concerned with the cost of the coverage.

As independent insurance agents here at PNW Insurance Group, our job is to help guide you through the process, finding you the coverage that fits your needs at competitive pricing. We can do that because we are able to offer you a selection of insurance companies as well as compare different coverages and rates for you. If you’re looking to purchase home insurance right here in Puyallup or in the Pacific Northwest, PNW Insurance is here to guide you, saving you valuable time and energy and answering your “what if” questions! Give us a call or fill out a homeowner’s insurance quote here online and we’ll help you find the best home insurance policy for you today!