How Much Is Homeowners Insurance on a $150,000 House?

Janet Berry-Johnson
Written by
Janet Berry-Johnson
Janet Berry-Johnson
Written by
Janet Berry-Johnson
Janet Berry-Johnson, CPA is a freelance writer with a background in accounting and income tax planning and preparation. She's passionate about making complicated financial topics accessible to readers. She lives in Omaha, Nebraska with her husband and son and their rescue dog, Dexter. Visit her website at www.jberryjohnson.com.
Danny Smith
Edited by
Danny Smith
Photo of an Insurify author
Edited by
Danny Smith
Insurance Writer
Danny is an insurance writer at Insurify. Specializing in auto insurance, he works to help drivers navigate the complicated world of insurance to find the best possible policy. He received a bachelor's degree from the University of Massachusetts Amherst. You can connect with Danny on LinkedIn.

Updated December 6, 2022

Reading time: 8 minutes

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The value of your home, and the types and levels of coverage you choose, will affect how much homeowners insurance costs for your $150,000 house.

Homeowners insurance is essential when you own a home. It protects you financially in the event your home is damaged or destroyed by a covered event. It also helps protect you from liability if someone is injured on your property. Plus, your mortgage lender will almost certainly require you to purchase homeowners insurance.

Still, you don’t want to overpay for coverage. Here’s important information about homeowners insurance to help you determine how much you need.

How much does homeowners insurance cost?

Homeowners insurance is not a one-size-fits-all product. The cost of coverage varies depending on a variety of factors, such as your location, the age of your home, the size of your property, and the type of coverage you choose.

That said, homeowners insurance is generally not expensive. In most cases, you can get coverage for less than $100 per month.

For homes with an insurance range of $150,000 to $174,999, the national average annual premium is $975, according to the National Association of Insurance Commissioners (NAIC) Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owner’s Insurance Report. That price is for an HO-3 policy, which is the most common type of homeowners insurance on the market, providing all-risk coverage for the home and named-perils coverage for personal property.

Learn More: Understanding the 8 Types of Homeowners Insurance

Factors that affect the cost of homeowners insurance

A number of factors influence the cost of homeowners insurance, including:

Location

Location is one of the most important factors when it comes to homeowners insurance. Not only does your ZIP code affect the cost of coverage, but your specific neighborhood can also have an impact.

Some areas are more prone to natural disasters, like hurricanes or wildfires, or have higher crime rates. As a result, homeowners in those areas pay more for insurance. And if you live in a high-risk area, you may need to purchase extra coverage like flood or earthquake insurance.

Square footage

The size of your home can also affect the cost of homeowners insurance. The more square footage your home has, the more you can expect to pay for coverage. That’s because the insurance company is taking on more risk by insuring a larger property.

Age of the home

The age of your home is one of the most important factors when it comes to homeowners insurance.

The older your home is, the more likely it is to suffer from damage that could lead to a costly insurance claim. Older homes often have features or construction materials that are expensive to replace, such as ornate trim, stained glass, or stonework. As a result, insurers charge more for coverage on older homes.

Keep Reading: Why Does the Age of My House Affect Home Insurance Premiums?

Type of construction

The type of materials your home is made from can affect the cost of homeowners insurance.

Homes built from long-lasting materials, like concrete and brick, are generally less expensive to insure than wood-frame homes because wood is more susceptible to fire, wind, and water damage.

Proximity to fire protection

The closer you are to a fire hydrant and a fire station, the less expensive your homeowners insurance will be.

This is because firefighters can quickly extinguish a blaze if there is a hydrant nearby, and they can get to your home faster if it’s close to a fire station. Homes near a fire hydrant or in a community with a professional fire department may cost less to insure than homes located further away from fire protection.

Level of coverage

The type of homeowners insurance you choose will also affect the cost. The most common form of homeowners insurance, HO-3, covers your home and its structures for all risks or perils that aren’t specifically excluded in the policy.

To reduce your costs, you could downgrade to an HO-2 policy, which is a named-perils policy, meaning it covers only damage from events or perils specifically named in your policy, such as fire, windstorm, hail, and theft. But if you incur a loss from an event outside of the named perils, you’ll have to pay for the repairs or replacement out of pocket.

Other coverage options also affect your premiums. For example, an actual cash value policy, which pays the depreciated value of your property, is less expensive than a policy that pays the property’s replacement cost without a deduction for depreciation.

Riders that offer additional coverage for things like jewelry, art, or electronics can also drive up the cost of homeowners insurance.

Learn More: Actual Cash Value vs. Replacement Cost: Which Is Best?

Claims history

Your homeowners insurance rates are also affected by your claims history. If you’ve filed a lot of claims in the past, or if your home has been damaged in multiple incidents, insurers will likely charge you more for coverage.

This is because homeowners who file frequent claims may be more likely to make a claim in the future, and insurance companies have to cover their own costs when they pay out a claim. So they raise premiums to account for the increased risk.

Keep in Mind: When your homeowners insurance company agrees to pay a claim, you’ll have to cover your deductible amount out of pocket before your insurance begins to pay.

How to save on homeowners insurance for a $150,000 house

You can take steps to save on your homeowners insurance, whether your house costs $150,000 or $1.5 million.

Increase your deductible

One way to save is to increase your deductible. This means you’ll have to pay more out of pocket for any damages that occur, but you’ll also receive a lower premium.

Raising your deductible from $500 to $1,000 can reduce your premiums by as much as 25%, according to the Insurance Information Institute (III).

Install safety and security systems

You can also reduce your costs by increasing your home’s security features. Having an intruder or fire alarm system that automatically alerts local authorities can take as much as 15% to 20% off your premiums, according to III.

Bundle insurance policies

Bundling insurance policies is a great way to save on premiums. Many insurance companies offer discounts to customers who purchase homeowners and auto insurance from the same company. Insurers may take 5% to 15% off your premium when you buy two or more policies with them, III reports.

Learn More: Compare Home and Auto Insurance Bundles

Maintain good credit

In some states, your credit score is also one of the factors insurance companies look at when determining your homeowners insurance rates.

Insurers interpret a high credit score as an indication that you’re a responsible borrower and are less likely to file a claim, which means that you’re a lower risk to insure. As a result, you’ll likely receive a lower premium than someone with a low credit score.

On the other hand, if you have a low credit score, you’re considered a higher risk to insure and will likely pay more for homeowners insurance.

Good to Know: California, Massachusetts, and Maryland prohibit insurance companies from considering a person’s credit score in the rate-setting process.

Ask about discounts

Insurance companies may offer other discounts in addition to those available for having a newer home, installing fire and burglar alarms, and bundling multiple policies.

Some potential discounts include:

  • Upgrading to a hail-resistant roof

  • Paying your policy in full

  • Going five or 10 years without filing a claim

  • Living in a gated community

  • Upgrading your electrical, plumbing, or heating system

  • Setting up monthly payments via electronic funds transfer (EFT)

  • Installing smoke detectors or a sprinkler system

  • Having deadbolts on all doors

  • Installing storm shutters

Some companies also offer discounts for members of certain organizations. For example, The Hartford offers discounts for AARP members, and Liberty Mutual offers discounts for members of the American Institute of CPAs.

Not all discounts are available in all states, so it’s a good idea to ask a policy expert about potential discounts when you purchase the policy or before making changes to your home.

Check Out: Top 12 Home Insurance Discounts and Savings

Review your policy limits

If you already have homeowners insurance, it’s a good idea to review your coverage at least once a year to ensure you’re not paying for any coverage you no longer need. If you added extra coverage for jewelry or artwork you no longer own, you can cancel the extra coverage to reduce your premiums.

It’s also a good idea to regularly check that you have adequate insurance. For example, if you made home improvements in the past year, you’ll want to revisit your home insurance coverage.

Comparison shop

Finally, comparing quotes online from multiple insurance companies can help you find the best rates for your specific situation.

When to buy homeowners insurance

Homeowners insurance is an important investment, and it’s crucial to make sure you have the right coverage in place when you become a homeowner.

The best time to buy homeowners insurance is when you’re buying your home. In fact, unless you’re paying cash for the home, your mortgage lender will require you to show proof of insurance before closing on the loan.

Another good time to buy homeowners insurance is when you’re renewing your policy. Shopping around can help you find better rates, and you may be able to bundle your policies to save even more.

It’s important to remember that rates can vary significantly from company to company, so you should compare quotes before renewing your policy.

Read More: How to Compare Home Insurance Quotes

Homeowners insurance FAQs

  • Most homeowners policies cover the following:

    • The structure of your home and any other structures on the property

    • Your personal belongings, up to a certain limit

    • Liability in the event of an accident on your property

    • Additional living expenses if you’re unable to live in your home due to a covered loss

    It's important to review your specific policy to make sure you’re fully aware of what is and isn’t covered.

  • The standard HO-3 policy does not cover losses resulting from:

    • Floods

    • Earthquakes

    • War

    • Nuclear hazards

    • Pollution

    • Intentional acts

    • Power failure

    • Enforcement of building codes

    • Damage due to maintenance issues

  • One way to determine the amount of coverage you need is to calculate the replacement cost of your home and belongings. The replacement cost is what it would cost to rebuild or repair your home and belongings if they were damaged or destroyed.

    To calculate the replacement cost, you’ll need to know the value of your home and any belongings that you would need to replace. The best way to determine the replacement cost of your home and belongings is by talking to an insurance agent or using an online calculator.

  • When it comes to comparing homeowners insurance, it’s important to do your research. The best way to do this is by getting online quotes from multiple insurers. This will give you a good idea of what the market rate is for homeowners insurance and help you find the best deal.

    With Insurify, you can compare personalized home insurance quotes from top companies and get guidance from policy experts.

    One way to check an insurance company’s financial strength is to look it up on A.M. Best, a credit-rating agency that specializes in the insurance industry. While you do have to register with A.M. Best to access rating information, membership is free. 

    Finally, don’t forget to consider your needs when choosing a policy. Make sure the policy has enough coverage to protect your home and belongings in the event of a loss.

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Janet Berry-Johnson
Written by
Janet Berry-Johnson
Linkedin

Janet Berry-Johnson, CPA is a freelance writer with a background in accounting and income tax planning and preparation. She's passionate about making complicated financial topics accessible to readers. She lives in Omaha, Nebraska with her husband and son and their rescue dog, Dexter. Visit her website at www.jberryjohnson.com.

Learn More
Danny Smith
Edited by
Danny Smith
Linkedin

Insurance Writer

Photo of an Insurify author
Edited by
Danny Smith
Insurance Writer
Danny is an insurance writer at Insurify. Specializing in auto insurance, he works to help drivers navigate the complicated world of insurance to find the best possible policy. He received a bachelor's degree from the University of Massachusetts Amherst. You can connect with Danny on LinkedIn.