Home Finance Home Insurance Calculator: Estimate Your Costs – NerdWallet

Home Insurance Calculator: Estimate Your Costs – NerdWallet

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Buying a home means you’re also buying something else: homeowners insurance. And while it isn’t your biggest expense, how much you pay for insurance will impact your home ownership costs.

The national average cost of home insurance is $1,631 a year, according to NerdWallet’s 2020 rate analysis. But the amount you pay can vary substantially depending on several factors. Here’s how to get a better idea of what your home insurance might cost.

How to estimate your home insurance

Determine how much coverage you need

A typical homeowners insurance policy includes six components, and the amount of coverage you want for each type will help determine your overall premium. The six types are:

  • Dwelling, which pays for damage to the main structure of your home.

  • Other structures, which covers unattached structures like sheds and fences.

  • Personal property, which covers your belongings.

  • Additional living expenses, if you need to temporarily relocate while your home is being repaired.

  • Liability, should you cause property damage or injury to someone else.

  • Medical payments, which pays for treatment to someone injured on your property or if you, a family member or a pet have injured someone elsewhere.

Typically, you need enough dwelling coverage to pay the costs of completely rebuilding your home.

Several of the others may be calculated as a percentage of your dwelling coverage — generally 10% for other structures, 50% to 70% for personal property and 20% for additional living expenses. Liability coverage usually starts at $100,000 and can be higher depending on your needs. Medical payments coverage typically has a low limit, between $1,000 and $5,000.

Choose your insurance deductible

Your insurance deductible is the amount you pay out of pocket for a covered claim before insurance kicks in. A typical homeowners insurance deductible ranges from $500 to $2,000.

The higher the deductible you set, the lower your premium.

Evaluate other factors

Physical characteristics of your house, such as its age, the condition of the roof and compliance with current building codes, will all affect the cost of insurance. A swimming pool will likely require additional liability coverage.

Similarly, location can play an important role. Insurers may weigh factors such as the quality of local fire safety and the home’s proximity to the coast.

Consider supplemental coverage

Standard home insurance policies do not cover damage from floods or earthquakes, but separate coverage may be available for these and other home insurance exclusions. If your home is at risk, you may want additional coverage.

Use a coverage estimator

Some insurers offer tools for estimating how much their home insurance will cost. These features typically use a limited set of information, but they will at least give a sense of your potential costs.

NerdWallet home insurance calculator

NerdWallet offers a ZIP-code-based calculator to help you estimate your homeowners insurance premium. The sample homeowner is a nonsmoker with good credit living in a single-family, two-story home built in 1983. The hypothetical homeowner had a $1,000 deductible and the following coverage limits:

  • $300,000 in dwelling coverage.

  • $30,000 in other structures coverage.

  • $150,000 in personal property coverage.

  • $60,000 in loss of use (additional living expenses) coverage.

  • $300,000 in liability coverage.