3BR, 1BA ranch home with a basement, ~1100 square feet, approximate value of $155,000. In a small town of about 600 people, but I’m on a city street with neighbors on all sides. I’m on city water and electricity, the fire station is literally a few hundred feet away. Tornadoes are rare but not unheard of, ditto forest fires. There hasn’t been a damage-causing earthquake in this county since Europeans first settled here, but we’re 110 miles or so from the New Madrid Fault so draw your own conclusions. Remnants of hurricanes pass through here every couple of autumns, but all they bring is bad rain – and I’m on the top of a hill.
I was aghast to find my cheapest option to be State Farm, at $179 per month. I was prepared to pay about half that.
Is this about right for a home of my value in a non-flood, non-hurricane, non-earthquake zone? Or is my poor credit playing a role here?
Home insurance went up a lot the last few years. I’m in a wind zone, firehouse also within a few hundred feet, no flood, Central Jersey, so low Hurricane risk but Nor’easters, house is a little over 1600sq’ and valued at around $570k now. It is $1880/yr. So yours at $2148 sounds too high. But not crazy high.
Get a quote for Hippo.com, they were cheaper than my other options.
Insurance on my house in the Greater Pugetopolis has doubled in the 9 years my wife and I have lived here. Also, that insurance doesn’t cover earthquakes, we have to carry a separate policy from the one company that offers earthquake insurance in Washington. Our insurance company is claiming the cost of building materials and high minimum wages in our state as need to raise our rates. Our homeowners insurance is now about 20% of our monthly house payment.
Our policy holder declined to renew our homeowner’s insurance citing two dangerous dogs and a log cabin as reasons. Other companies quoted nearly twice what we had been paying even though one of our dogs is now only a danger in dog heaven and we’ve been paying extra for the replacement cost of a log cabin since we got it. Farmers then offered us a policy close to what we were paying before. We’re paying around the same as @What_Exit for a 2000sq.ft. house valued at $460K. Considering our low property taxes the cost is quite reasonable.
In both commercial and residential the increasing replacement costs of roofs is definitely a factor. Where I retired from, commercial insurance division, they never captured roof age until three years ago.
Personal anecdote: we had our roof replaced by our insurance company about three years ago; the total work was $13,000.
I’m in metro Atlanta, but wind storms happen pretty much everywhere.
Small towns usually rely on volunteer fire departments, so usually have a poor ISO rating which leads to higher homeowner rates than in urban areas. In an urban area you are going to have firefighters who are physically present in the firehouse so they can respond immediately to a fire. In a volunteer fire department the fire fighters are instead at their jobs or at their homes so it is going to take longer for the fire fighters to get back to the firehouse and then get to your home. Water supply may also have inadequate pressure in rural areas [to supply the very high volume of water needed to fight a fire].
Did you get a quote from a local insurance agent? Note that in many rural areas there are county mutual insurance companies that most residents use–and these big insurance websites are not going to have them, but the small local agents will.
I’m in Chicago, single fam home, std State Farm policy is right around $1k/yr for a $230k valuation, discounted a little since my car is insured with them, too.
Ask your agent what factors are driving up the cost - they should be able to easily let you know. You may be incorrectly zoned for your fire department. They may be harshly penalizing your credit score. Could be a bunch of other factors - but they can tell you.
I have this very house, in the Cleveland-Akron area. Worth a bit more because we have a good school system people want (about $190k) so houses around me have been selling for more. Built in 1969. No floods, forest fires or hurricanes although the area is seeing more tornadoes lately.
Just paid my State Farm bill and it was $889 for the year.
We do have a very high ISO from our full-time fire department (very good point @PastTense). I have also sat down with my agent to go over replacement costs - nothing in my house is high end, and replacement of elements of my home would not be much more than builder quality. I actually called them up after I had my kitchen remodeled and discussed that we should probably up the replacement value on the kitchen because now I no longer have cabinets from 1969.
Homeowner’s insurance nationwide has been underpriced for decades. The insurance co’s are waking up to the need to significantly raise rates everywhere to capture the much higher risks they’re now running. Both stuff that’s more expensive being destroyed, more of it being destroyed, and even higher costs to rebuild whatever wherever. It’s a triple whammy.
Most people in e.g. FL would be overjoyed to only have their rates double over a few years.
sounds like you don’t need flood insurance based on your topography, but as we’re hearing so much about in the wake of Helene, flood insurance usually has to be purchased separately.
My homeowners insurance premium tripled over the last two years. I’m not joking, and from what I hear this was not uncommon. As @LSLGuy said, insurance companies are realizing disasters are much more common than they originally thought.
It’s probably worth your while to call your insurance company and find what your premium would be with a higher deductible. You may of course elect to keep your coverage as it is, but it’s a good idea to see what your options are.
We’ve lived in this house more than 40 years and I think we’ve made claims against our homeowner’s insurance only twice. In our case it turned out (based on what our financial advisors said) that our premium wouldn’t go down enough to make changing the deductible worthwhile, but of course YMMV.
In Florida, one of the factors in cost is “wind loss mitigation” or some such - by having an inspection done on the condo we used to own, our insurance went down well over a half. Maybe more. Largely, I think, because hurricanes often do their damage by ripping the roof off.
Our house, NOT in Florida, has a new roof - and IIRC our insurance dropped slightly as a result. Not nearly as dramatically.
Re the OP: Get whatever insurance you can, now, and recheck rates every year. Our insurance had gone through the, er, roof after a few years - and just by calling the company, they lowered it quite a bit (as they knew we could do much better elsewhere - they were simply jacking it up as much as they thought they could).
I could understand one insurer’s actuaries missing the mark by a bit for a short period of time - but how does an entire industry fail to account for risk that’s been incrementing over decades? They’ve got the data, they know how much they’re paying out in claims every year, what the causes are, how bad each individual claim is - so it should be possible to issue course corrections on a very regular basis.