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Cheap Home Insurance - A Word of Caution

by Brandon Cornett

Cheap home insurance is great. After all, everyone likes to save a buck now and then. But you should never sacrifice the coverage you need just to get a cheap policy.

Earlier today, I was doing some research on keywords relating to the home insurance industry. I do this from time to time in order to find out which topics and phrases people are most interested in (at least when it comes to their search engine use). Based on the data I reviewed, a lot of people are interested in cheap insurance coverage. At the top of the keyword list, in terms of search volume, there were many occurrences of cheap home insurance and similar phrases.

So in this article, I'd like to talk about how much you can expect to pay for homeowners insurance, and how important it is to weigh the cost against the coverage. I would also like to warn you to be careful how cheap you go when shopping for insurance policies.

How Much Does Home Insurance Cost, Anyway?

The cost of your homeowner insurance premium will mostly depend on three things -- the state in which you reside, the amount of coverage you choose, and the deductible amount. The average cost of home insurance in some states (like New York) is three times the price of the average policy in other states. With that being said, the average premium is about $800 per year. If you ask me, this is fairly cheap home insurance when you consider the value of what you are ensuring. For most people, a house and the items within it are their most valuable assets. So I don't think that $800, on average, is too high a price to pay. In fact, I think it's quite reasonable.

Of course, the word "cheap" means different things to different people. For some, $800 is too much to pay for a homeowners policy, so they will spend a lot of time seeking home insurance that is cheap by their standards. On the surface, there's nothing wrong with this kind of bargain hunting. By all means, I encourage you to use comparison-shopping to find the best policy. But I also warn you against sacrificing coverage in order to get a cheap home insurance policy, because the cost is only one piece of the picture.

Don't Sacrifice Coverage for Cheap Insurance

My best advice -- and the point of this article -- can be summed up in the following manner. You should get quotes from several different home insurance companies, and compare those offers to see who has the best rates. You should also try to get as many discounts as you can, such as the ones commonly given out for having a home security system, multiple policies with the same company, etc. You can also lower the cost of your premium by increasing the amount of your deductible, which is a strategy I usually recommend.

With that being said, you should get sufficient coverage for your home and its belongings. You should never let the desire for cheap home insurance override your common sense. In other words, do not make the mistake that many homeowners make, by sacrificing coverage to save a few bucks.

This article pertains to the topic of cheap homeowners insurance and the need for quality coverage. If you have questions about this subject, please visit the main page of our insurance library for more information. You can also ask a question by visiting the Q&A section of our website. I hope this article helps you understand the basic concepts of home insurance, and I wish you well in all of your real estate ventures.