How much is homeowners insurance on a $600,000 home?

How much is homeowners insurance on a $600,000 house?

The national average for homeowners insurance on a house with $600,000 in dwelling coverage is $4,677, but this is just an average. Pricing varies from state to state, so your ZIP code will play a huge role in determining what you pay for coverage.

Home insurance rates are based on the replacement cost of your house, not its market value. If you paid $600,000 for your home, that doesn’t mean that’s the replacement cost.

“The market value of the home is irrelevant,” Wells says.

Other factors like the deductible and liability limits you choose also matter. In most states, insurers also look at your credit score. Poor credit is statistically correlated to a higher likelihood of filing a claim, so you’ll pay more for homeowners insurance.

For example, in Connecticut, the average cost for $600,000 of dwelling coverage is $3,765. In Kentucky, the same amount of coverage costs $6,142.

Someone with a poor credit rating can pay up to 50% to 90% more than a person with an excellent credit rating.

Homeowners insurance for a $600k home by state

The state you live in is one of the biggest factors in home insurance rates on your $600k house. Your ZIP code plays a huge role in insurance companies' calculation of your risk profile, taking into consideration weather and natural disaster trends in that area as well as claims history.

Take a look at the table below to see the average rates in each state for a $600,000 house.

Homeowners insurance for a $600,000 home by liability limits

The amount of liability coverage you purchase affects your rates. The more coverage you buy, the higher the cost. However, increasing your liability coverage only results in a slight increase in rates. Experts recommend purchasing at least $300,000 to $500,000 in liability coverage as there won’t be a huge price difference.

Take a look at the table below to see what home insurance costs for different liability amounts.

What does homeowners insurance on a $600k house cover? 

Homeowners insurance has different coverage sections for any home, whether it’s worth $600,000 or $100,000. If your home has a replacement cost of $600,000, that will be the dwelling coverage amount. Your other structures and personal property coverages are a percentage of that amount, so it’s important to get it right.

These are the coverages on a standard policy and what they protect:

• Dwelling coverage. Coverage A on your home policy, this is the coverage that pays to repair or rebuild your home and any attached structures. It should equal the replacement cost of your home.
• Other structures. Coverage B on your policy protects detached structures such as fences, garages and sheds.
• Personal property. Coverage C protects the contents of your home and also covers your personal property off-premises.
• Additional living expenses/Loss of use. Coverage D provides coverage for a place to live if your house is being repaired and is uninhabitable due to a covered loss. 
• Liability. Coverage E covers liability when you are responsible for injuries to others or damage to their property.

You may also want to look into flood insurance, as it’s not included with standard home insurance. Additional coverage, such as earthquake or windstorm insurance, can be added as well.

Homeowners insurance for a $600,000 home by credit rating

The average cost of home insurance with $600,000 in dwelling coverage and $300,000 in liability with a $1,000 deductible is $3,986 if you have excellent credit. Poor credit drives that average up to $14,637.

Take a look at the table below. You can see that a person with an excellent credit rating pays significantly less than someone with a poor credit score. Insurers see a poor credit score as a type of financial risk, as it predicts that you are more likely to file a claim.

How to save on homeowners insurance for a $600k home

There are a few ways to save on your homeowners insurance regardless of how much it’s worth or the amount of dwelling coverage you need:

• Consider increasing your deductible if you can afford it. 
• Ask about discounts. “Talk to your agent about discounts available, such as for smoke alarms and security systems,” Wells says.
• Look into bundling your home and auto insurance with the same carrier.
• Keep your credit score in good shape.
• Keep up with the general maintenance on your home. Do a walk-around every season and take care of the little items before they become big ones. Trim trees and note roof and siding issues.
• Shop around for the best rates, especially if you have less than desirable claims history or credit score. While one carrier might be expensive, you may find more favorable rates with another.
• Don’t file a claim unless you really need to. Claims can increase rates.
• Review your policy annually to ensure you have the right coverage, are taking advantage of all discounts and aren’t being charged for anything in error.

How much insurance coverage do you need for a $600k home?

As noted above, you need enough coverage on your home to match its replacement cost. Remember that if you paid $600,000 for your home, that doesn’t mean you need $600,000 in dwelling coverage. The replacement cost may be higher or lower.

“You need replacement cost coverage, which is enough insurance to rebuild the home the way it was,” Wells says. This is the dwelling portion of your home insurance, Coverage A on your home policy. She reminds homeowners that this is based on the costs to rebuild the home, not the market value. Some people might think they need insurance to cover what Zillow or Redfin lists their house, but that’s the market value – what your house might sell for. For instance, if you bought your home for $600,000 but the cost to actually rebuild it is $700,000, you need to purchase $700,000 in replacement cost coverage.

“Your insurance agent and carrier have tools to estimate replacement cost on the home.  Ideally, you want to insure for 100% of replacement cost, minus the deductible you can comfortably afford,” Wells says

Go over each coverage section of your policy and choose your liability amounts and how much personal property coverage you want (to cover your belongings). 

“If you are going to make an error, err on the side of over-insurance rather than under-insuring.  In the event of a loss, you’ll be glad you had more insurance than needed,” Wells says.

Factors affecting the cost of home insurance on a $600,000 home

There are several factors that affect the cost of homeowners insurance. They include:

• The location. “Location of the home is a big one because weather can cause a lot of losses,” Wells says. If you live in “tornado alley” or a flood zone, look to pay much higher home insurance costs than other areas.
• The construction type and size of the home. “The type of construction is also very important,” Wells says. This is especially important in areas where wildfires are increasing in frequency, scope and size, like California or Hawaii. “A wood frame house is much more susceptible to total fire loss than a brick home.”
• How much coverage you’re purchasing
• Your claims history and the claims history of the property. Another thing to consider is that if someone who lived in the house prior filed claims, that will factor into your home insurance costs. Insurance companies look at the claims history of not just the policyholder but also the property itself.
• Your credit score, in most states. Poor credit indicates a higher risk of filing a claim.

Helpful home insurance tools and calculators

• Home insurance calculator
• Condo insurance calculator
• Renters insurance calculator
• When to file a home insurance claim