High Home Insurance Cost?

Oct 30, 2013 by

homeIf you’re a numbers nerd like me, you should spend a little time cruising Statistic Brain. A numbers person could lose him or herself there in the often useless but still interesting data. If on the other hand you, like Ms. Money Counselor, prefer to spend time interacting with people instead of browsing numbers, you may find Statistic Brain tedious. Either way, I’m glad you’re the way you are. 🙂

Average Home Insurance Premiums By State

Here’s something from Statistic Brain I found interesting: average annual home insurance premiums for most U.S. states.

average home insurance premium by state

home insurance by state

Source: Home Insurance LLC, March 2012

Surprises in State Home Insurance Premiums

Oklahoma is #1? I wouldn’t have guessed that, but I suspect that the state seems to attract tornados like big-haired women attract male politicians have put a whuppin’ on the state’s home insurers, and they want their money back. As global warming really gets cranked up, expect tornado alley to trend toward tornado superhighway. (Oh wait, Oklahoma’s U.S. Senator James Inhofe says that at least human caused climate change is a hoax because “God’s still up there” and it’s outrageous for anyone to believe human beings are “able to change what He is doing in the climate.” I stand corrected.)

Louisiana and Florida I get—Katrina, Andrew, and other big blows are likely responsible—and no doubt superstorm Sandy has propelled New Jersey far up the list since these figures were collected. But what about landlocked Arkansas at #4? Regular ice storms? Meth lab-landia? The Walton family sells home insurance in Arkansas? That one I don’t get.

I used to live in Minnesota, so I can vouch for the high home insurance costs there. A few destructive hail storms in the 2000s drove up premiums during my 18 years of residency in The Gopher State. (How’s that for a state nickname? Almost as alluring as The Aloha State, don’t you think?)

Are You Above Average?

If your home insurance premium is above the average for your state and you haven’t made any or many claims, maybe you can do better. And maybe you have more coverage than you need or a needlessly low deductible.

Shop Around for Cheaper Insurance!

Insurance is a competitive business, and it’s easy to shop around.

If you have U.S. military connections—or for some products, even if you don’t—USAA.com is worth checking out. The list of people eligible for USAA membership includes: active military; veterans; spouses of USAA members; widows, widowers, and former spouses of USAA members; individuals whose parents are or were USAA members; and former USAA members. USAA sells all kinds of insurance, and offers many more services including banking, investments, mortgages and real estate, retirement planning, health insurance, and discount programs for travel, retail shopping, and more.

Most of USAA’s products are reserved for those who fit in one of the eligibility categories listed above. But USAA also offers, to anybody, investing, life insurance, and shopping discounts.

Be Sure to Compare Apples to Apples

Insurance products can be complicated, so when comparison shopping, be careful you understand what you’re buying. Opting for the cheapest policy may not be the best choice for your family—coverage and benefits matter too!

How Does Your Home Insurance Premium Compare?

If you’re a U.S. homeowner, is your annual premium above or below the average for your state?

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  • Our home insurance at $750 is just under our state’s average. We live in California and our insurance does not include earthquake coverage. That would add just about another $1000 to the annual premium. Since our house has been through several large earthquakes (it was built in 1961), I’m not too worried about the structure. At worst, the chimney could suffer damage, but the repair cost would likely be within the deductible, so we’d have to pair for the repair, anyway.

    • We live in the Cascadia Subduction Zone, which means we get a 9+ temblor about every 700 years, like the ones that caused tsunamis in Japan and around the Indian Ocean in 2011 and 2004. We do have earthquake insurance, and yes it’s costly. Plus the deductible is extraordinarily big–ours is $35k. About half the people in our region don’t have earthquake insurance. Some simply can’t afford it; I think others believe that when The Big One hits all the insurance companies will instantly become insolvent so what’s the point of having insurance? It’s a good question…

  • We are running $300 over our state’s average. The problem with NC is that there are so many rural areas that it doesn’t cost much for insurance. When you live in the bigger cities, the average is much higher. I am paying near the average for number 2.

    • Yes, averages can be tricky for comparison purposes, especially on a state-wide basis; they’re skewed by the extremes. Median would be better.

  • I live right on the border with Oklahoma and our rates here are below the Average for Oklahoma and Texas. Shopping around really helps though because some providers charge much more for the same type of insurance.

    I sometimes wonder if the low population in some areas have a big effect on insurance prices. I feel like an insurance company can spread the risk out with higher populations, and may have to charge more if a high risk area has a smaller population.

    • I’ve had the same experience as you with big variations in insurance premiums among providers. Seems if a company wants to reduce its exposure in a certain area it’ll intentionally bump up premiums to the point of being uncompetitive. And vice versa. I make a habit of shopping every time a policy renews. I’ve also found that my current provider will sometimes match or beat a competitive quote I get.

  • Greg

    We just switched last year and it looks like we went from above to below. I am happy to see Virginia on the bottom end of this list. In the insurance world, it definitely seems to pay to not be loyal.

    • Only a sap would be loyal to a for-profit corporation these days. Price, quality, service–that’s all that should matter.

  • I’m Canadian, and everything is a bit more expensive here, but my insurance costs on the higher end of your graph – and it’s the cheapest we could find.

    • Ditto in all respects, except I’m ‘fake’ Canadian–U.S. citizen/Canadian permanent resident, living in Canada. Our home insurance cost is high too, but that’s largely due to 1) we have earthquake insurance and live in a mega-thrust quake zone, and 2) we rent a suite in our home on a short-term basis to vacationers, relocators, etc.

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