How Much Does Property Insurance Cost?
Because your property purchase is likely the biggest investment you'll ever make, the cost to insure it is something you want to consider. Your cost will vary depending on a wide range of factors that include the size, age and location of your home, its construction type and materials, the presence of certain safety features and your claims history.
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Construction Factors
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The primary function of homeowners insurance is to repair or rebuild your home after a loss. You should verify that your policy carries enough reconstruction coverage to fully rebuild your home if it is completely destroyed. Because larger houses cost more to rebuild than smaller ones, generally, insurance costs will vary by your home's size. Different building materials also cost more to replace than others, so the style of your home can drive the premium as well. Log, masonry and wood-frame homes of equal size will have different reconstruction costs associated with them.
Geography
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Some parts of the United States are more dangerous to live in than others. For example, coastal areas are prone to wind damage, and Florida homeowners in particular face annual risk of loss by hurricanes. CompuQuotes.com offers data from the National Association of Insurance Commissioners that reveals the average cost of insuring a single-family residence in 2007 was $822 annually. Broken down, however, it reports that both Florida and Texas had average costs exceeding $1,400. This shows that the area in which you live plays a major part in your property insurance cost.
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Flood Insurance
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Standard homeowners insurance does not cover losses from flooding such as an overflowing riverbank or flash flood. Therefore, the cost of flood insurance might be of equal importance to you as the cost of homeowners insurance, if you have to, or choose to, insure against flooding. The Federal Citizen Information Center, based in Pueblo, Colorado, reports that the average cost of flood insurance in the United States is around $1 per day, with variations depending on the size of your home and amount of coverage.
Renters Insurance
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Even if you don't own a home, you still have property you need to protect. Renters insurance covers your personal belongings but does not protect the building in which you live. Presumably, your landlord has a separate insurance policy that protects the dwelling. Because there is no real property coverage, renters insurance typically is much less expensive than standard homeowners insurance. Your premiums are based primarily on the amount of contents coverage you purchase. According to RentersInsurance.net, some policies cost as little as $10 per month, though premiums can exceed that amount depending on how you build your policy.
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References
- Florida Office of Insurance Regulation: Compare Homeowner's Insurance Rates
- Insure.com; Home Insurance Basics; July 2010
- CompuQuotes; Average Insurance Costs; Doresa Banning; April 2010
- Federal Citizen Information Center: National Flood Insurance Guide
- Renters Insurance: Renters Insurance Shopping Made Easy!
- Photo Credit Residence image by John Sandoy from Fotolia.com
