How much is homeowners insurance on a $300,000 home?

How much is homeowners insurance on a $300,000 house?

The national average for homeowners insurance on a $300,000 house is $2,601 a year. That’s based on $300,000 in dwelling coverage and liability with a $1,000 deductible. Your cost could be much higher or lower depending on key factors. 

One of the biggest factors is your ZIP code. Insurance companies look at the weather and claims trends in your part of the country.

If your deductible is higher, your rates will be slightly lower. A lower deductible means slightly higher rates. The same applies to your liability coverage limits. While the price difference isn’t significant, lower liability limits come with lower rates, and vice versa.

Unfortunately, a poor credit score means you will pay significantly more for home insurance – upwards of 50% to 90% more, depending on the state and the carrier you choose.

The only way to get an accurate idea of the cost of home insurance on your $300,000 home is to calculate your home’s replacement cost and request quotes. Remember that your quotes should reflect that replacement cost, not your home’s market value. You can utilize an online calculator to get estimates using your ZIP and coverage amounts.

Homeowners insurance for a $300K home by state

Homeowners insurance for $300,000 in dwelling coverage varies from state to state due to weather patterns and other factors. 

Take a look at the table below for average annual rates by state. Note hurricane deductibles, which apply in 19 states and Washington, D.C.

Homeowners insurance on a $300,000 home by deductible

The table below shows how choosing a higher deductible – for example, $5,000 rather than $500 – can save you over $700 a year with some carriers. The only downside is that in the event that you need to file a claim, you would be responsible for $5,000 out of pocket before the insurance company pays out. Ensure you can cover that amount if necessary.

Conversely, a lower deductible means you pay more upfront for premiums. However, if you file a claim, you will only be responsible for that low deductible, and the insurance company will pay the rest.

Homeowners insurance on a $300,000 home by liability level

Besides your dwelling coverage limits, which cover the structure of your home, you should look carefully at your liability limits. This coverage protects you if you are liable for someone else’s injuries or property damage.

The standard policy comes with $100,000, but there isn’t much difference in cost between $100,000 and $300,000 in liability coverage. Most experts recommend going even higher, up to $500,000. 

The table below shows what a few national carriers charge for different liability limits.

Homeowners insurance on a $300,000 home by credit rating

Insurance companies assess risk when determining your rates. Financial risk is one aspect, and they consider poor credit a financial risk. Why? Statistics show that people with poor credit are more likely to file a claim.

Take a look at the table below to see the homeowners insurance rates for different credit score profiles at different liability coverage limits. A person with a poor credit score pays almost $6,000 more per year than someone with an excellent credit score.

How to save on homeowners insurance for a $300K home

There are a few ways to save on homeowners insurance on a $300,000 home. This applies to all homes:

• Consider increasing your deductible if you can afford it. You can shave a few dollars off your premiums.
• Ask about discounts, including for security systems and upgrades.
• Look into bundling your home and auto insurance with the same carrier. This is sometimes the biggest discount a carrier offers.
• Keep your credit score in good shape – people with better credit pay less.
• 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 a 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 on your record can increase your rates.
• Review your policy annually to make sure you have the right coverage, are taking advantage of all available discounts and aren’t being charged for anything in error.

How much coverage do you need to insure a $300k home?

“You need replacement cost coverage, which is enough insurance to rebuild the home the way it was,” says Brenda Wells, the Robert F. Bird Distinguished Professor of Risk and Insurance at East Carolina University. “Replacement cost coverage is how you determine the dwelling coverage limits of your home insurance, Coverage Section A of your policy. This is the overall structure of your home. One easy way to calculate replacement cost is to take the square footage of your home and multiply it by all the average cost of building materials and labor in your part of the country. However, your insurance agent or representative can provide a more detailed calculation.”

Remember that if you paid $300,000 for your home, that doesn’t mean you need $300,000 in dwelling coverage. The correct amount may be more or less, based on the actual cost to rebuild your home at today’s prices. It’s important to get the replacement cost calculation right.

“I personally feel that you should have your insurer help you estimate the replacement cost of the house,” Wells says. “They have tools to do that. 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.”

You’ll also want to review the other coverage sections of your policy carefully to ensure you choose the right limits for your situation. These sections are:

• Other Structures. Coverage B on your policy, which protects detached fences, garages, sheds, etc. It’s usually about 10% of your dwelling coverage.
• Personal Property. Coverage C, which protects all your “stuff” inside the home, all your belongings.
• Additional Living Expenses/Loss of Use. Coverage D, which pays for a place to live if your house is being repaired and is uninhabitable. 
• Liability. Coverage E, which protects you from costs associated with injuries or damage to others for which you are liable. Experts recommend $300,000 to $500,000.

Also, remember that flooding is not covered by a standard homeowners insurance policy. You must purchase a separate flood policy.

It’s also a good idea to check with your mortgage company to see what coverage is required.

Factors affecting the cost of homeowners insurance on a $300,000 home

There are a few key factors that affect the cost of homeowners insurance on any home, no matter its value. These are:

Your ZIP code.  “Location of the home is a big one, because weather can cause a lot of losses,” Wells says. The more severe the weather in your area, the more likely you might sustain damage to your home and need to file a claim. This means you are riskier to insure than someone living in a calm weather area.

The amount of coverage you purchase.  The amount of dwelling and liability coverage you choose will greatly affect your costs. Dwelling is the biggest portion of your insurance, as it protects the overall structure of your home. The bigger your home and the more money you would need to rebuild it after damage, the more it will cost you in premiums.

Your deductible. You can choose your deductibles when you set up your policy. Some people prefer a lower deductible, which means you’ll be responsible for less out-of-pocket expense if you file a claim. Lower deductibles can mean higher overall rates, though. A higher deductible usually means a lower premium, but you’ll need to pay more for your share in the event of a claim before the insurance company pays its portion.

Your credit rating. Insurers look at all types of risk when calculating your premiums, and credit score is one of them. “Low credit scores are correlated with losses,” Wells says.

Other factors also apply, such as your personal claims history and even the claims history of the property itself. Some things are out of your control, like what’s going on with the insurance market in your state. Shopping around to compare multiple quotes with multiple carriers is your best bet to find a policy that is most suitable and affordable for your needs. 

Methodology

Insurance.com commissioned Quadrant Information Services to get homeowners insurance rates for $300,000 in dwelling coverage, $300,000 in liability, a $1,000 deductible, and a 2% hurricane deductible in 20 states. To get these rates, we have compared 20,739,560 insurance quotes across 34,588 ZIP codes from 62 company groups. The rates are for comparison purposes only, your exact rates may vary.

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