There are a number of factors that contribute to the price of your home insurance. If you want a cheap insurance policy, it’s a combination of a low-cost home, location, and likelihood of natural disasters.
Insurance companies have a number of algorithms that determine how much your home insurance premium will be. Things like value of the home is a huge factor, as well as age of the house. Then, they factor in things like how much it costs to rebuild and insurance scores. But where you’re located makes a big difference too.
If you live in an area where there’s a high frequency of disasters, your premiums will be higher. If your area is prone to earthquakes, high winds or tornados, flooding or wildfires, the insurer knows they will end up paying a lot more in pay-outs.
Your premiums are based on actual figures of pay-outs in the area and anticipated pay-outs. Areas like coastal areas or cities locations on fault lines, will have more expensive insurance. If you live in a small population area with low building costs and less risk of natural disasters, your premiums will be cheaper.
A recent analysis by insurance.com considered insurance rates based on properties valued at $300,000, with a $1,000 deductible. They found the ten ZIP codes where, on average, home insurance is the most expensive.
Loco Hills, New Mexico
Average home insurance premium: $4,071
At risk of tornados, high winds and flooding, Loco Hills is no stranger to extreme weather events. It also has a slightly higher than average house cost. But it’s the isolation of the town that makes it an expensive rebuild cost, putting insurers on the back foot.
Average home insurance premium: $4,361
While a comparatively normal median house price of $215,000, it’s the tornadoes that increase home premium costs here. It’s had a series of tornadoes over the years that have made it a risk for insurers.
Awendaw, South Carolina
Average home insurance premium: $4,612
With a higher-than-average house price of $391,045, Awendaw is an expensive place to rebuild. But, the high premiums are reflective of the effects of Hurricane Hugo which wiped out Awendaw in 1989, then Gaston in 2004, and Irma in 2017.
Average home insurance premium: $4,612
The median house price here is slightly higher than the national average, at $202,888. But it’s the strong storm winds and tornadoes that increase the risk to insurers.
Emerald Isle, North Carolina
Average home insurance premium: $4,654
This town is the perfect storm for insurers. Incredibly high median prices, upwards of $400,000 mean that average premiums are higher in general. But it’s also prone to tornadoes, storms and its precarious location on a narrow strip of land makes it vulnerable to flooding and winds.
Average home insurance premium: $4,666
A median house price of $78,1000 is lower than other parts of Kansas. However the town is small, and the rebuild value is high comparatively. But, as Dorothy and Toto know, the area is prone to tornadoes and strong, damage-causing winds.
Average home insurance premium: $4,966
With a median home value of $141,234, it’s not so much the house price that raises the premium. It’s tornados that plague the area.
Average home insurance premium: $5,752
This is a big jump from the Oklahoma premium cost, and with good reason. While the median house cost is an affordable $110,300, its history is beset with disaster. It was hit in 1993 with the storm of the century, followed by the 1994 ice storm. Then, tropical storm Alberto left its mark, followed by Hurricane Ivan ten years later in 2004. Katrina added to the list in 2005. Then a series of tornados in 2007 and 2011 affected Mobile too.
Average home insurance premium: $5,911
The median home value in Louise is $218,750, a lot more than the county average of $152,054. Add to this higher value of homes is that it’s an area prone to hurricanes. Harvey visited in 2017, which was one of the most expensive hurricanes ever with $125 billion in damage from the high winds and flooding. It’s also a small town, making the rebuild cost less affordable.
Islamorada Village of Islands, Florida
Average home insurance premium: $6,295
It’s no surprise Islamorada heads the list. Surrounded by warm Florida waters, this area is prone to storm damage, erosion and hurricanes. It’s not only been badly affected by a number of hurricanes already, but is prone to more. Add to that, the type of people who live in Florida- retirees who buy beautiful properties to live out the remainder of their lives in. Compared to the Florida average of $237,100, the average home cost in Islamorada is $604,200.