Q: How much does home insurance cost?

There are a great deal of factors that determine how much you will pay for homeowners insurance. Some of the factors you may have control over, others- you may not. However, it is always a good idea to be aware of what affects your rate and how you may be able to improve it.

Your Dwelling Coverage: Dwelling coverage is the amount of coverage you have to replace the structure of your home in the event of a loss. Your dwelling coverage is calculated by multiplying your home's square footage by your local building costs. Local building costs vary from region to region, however, you can get an estimate of your dwelling cost and local building costs by using our home insurance calculator.

Other Coverages: Aside from your dwelling coverage, there are other coverages included in your homeowners policy that may affect how much you pay. Contents coverage, other structures coverage and loss of use coverage are all typically set as a standard percentage of your dwelling coverage and can not be altered. However, Your Personal Liability and MedPay coverages offer some options for you as a homeowner. Personal liability limits, for example, can be increased to suit your needs. A standard homeowners policy would include a $100,000 personal liability limit. If you increased this limit to $500,000 or $1 million, you may see your rate increase. Some homeowners add endorsement to their policy to increase coverage for a specific item in their home such as fine jewelry, collectibles, etc. These endorsements may increase your monthly premium as well.

Home Construction: Some types of homes have been proven to be more able to withstand wind, hail and other perils making them less expensive to insure than others. For example, owners of brick homes will typically see a slightly lower homeowners insurance rate than a wood-home owner with a comparable policy. Also, the age of your home will affect your rate. Older homes; especially those with original electrical, plumbing and heating systems; are at more of a risk for loss. For this reason, homeowners with older homes might see a slightly higher rate than others.

Home Safety Features: As mentioned above, these are the features that affect your homeowners insurance that you may have some control over. Home insurance companies reward homeowners who have safe homes. Discounts are available for homes that:

• Have burglar alarms
• Have fire alarms
• Are within a specific distance from a fire hydrant
• Have deadbolt locks
• Are within a specific distance from a fire department

Your Insurance Score: Another factor affecting your home insurance rate is your personal insurance score. Your personal insurance score is a number assigned to you by your insurance company that ranks your financial credit and insurance claims history. (See more here: Why do home insurance companies check credit scores?) Typically, the better your insurance score, the better rates you will be offered by home insurance companies. Maintaining good credit is one good way to keep a good credit score and secure lower rates.

The Area Where You Live: Lastly, part of what affects your home insurance rate is the geographical region of the U.S. that you live in. For example, if you live in coastal Florida, which is more prone to major hurricanes, you will see higher rates in that area as opposed to other parts of the country. The same goes for homeowners who live in areas prone to tornadoes, earthquakes and floods. Visit the Rates by State interactive map to see what homeowners are paying, on average, in your part of the country.

Last Updated: September 11, 2009 9:13 AM EST

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