How Much is Homeowners Insurance on a $600,000 House? (2024)

Buying a home is a dream for a lot of people from all walks of life. For young folks, it’s about getting out of the family home, starting a life of independence, and making adult decisions. When the time comes to buy a residence, you’ll need to consider Homeowners Insurance. But with so many options out there, how do you select the right one for you?

You should never choose a policy that fails to cover everything – from the foundation to the roof. In my professional experience, homeowners want options when exploring Homeowners Insurance. They want to know what policies include and exclude to make informed decisions.

An informed homeowner is a contented one. As you read this guide, we’ll demonstrate the ins and outs of getting home insurance coverage for a $600,000 home. We’ll also tell you the best insurers available.

Key Takeaways

There are several things insurers look at when structuring premiums for customers:

Your deductible: After reporting an incident, the deductible is the amount you must pay out of pocket before the insurer chips in the remainder. A higher deductible translates into a lower premium, while a lower deductible translates into a higher premium.

Where you live: Your address will serve as a major factor. Is the community you live in prone to fire or crime risks These things can lead to a higher insurance premium. The good news is there are ways to slash costs – more on that later.

Claims history: Have you filed claims before? As is the case with car insurance, your rates might climb if you file excessively for home insurance claims.

Cost Of Homeowners Insurance by State

One of the major factors influencing Homeowners Insurance rates where you reside. One might be charged $32 monthly in Hawaii for a house worth $250,000, then $304 for the same coverage on a $240,000 house in Oklahoma. It really is about location. Location is king!

For that house worth $250,000, let’s see the premiums in several other parts of the U.S.

Most expensive states

Let’s stay with the example of a $250,000 home. We can see that Oklahoma tops the list with Homeowners Insurance coverage at $304 monthly. Other states with costly coverage include the following:

Cheapest states

Let’s now look at the lowest-cost states for Homeowners Insurance for a home worth a quarter of a million dollars. Hawaii has a $32 per month policy – making it the cheapest state for such coverage. Other low-cost states include the following:

Cost Of Homeowners Insurance by Policy Limit

When buying a home, you need to insure it for the full value. You’ll find that most lenders actually require this and won’t give you the option to do otherwise. Insurers offer quote-based increments of $100,000 or even $50,000.

The sticker price on a house is not necessarily the sum you want on your Homeowners Insurance policy. It only covers your dwelling. House insurance safeguards your personal possessions if you sustain a loss that is covered by your policy. If you encounter a complete loss, the payout sum should equal your home and possessions.

Another thing to consider is expensive possessions like artwork, paintings, and collectibles. Those aren’t typically covered by a home insurance policy, so you’ll need extra coverage known as a rider.

Cost Of Homeowners Insurance by Company

No two insurers are the same. And this fosters competition. You should look around before buying Homeowners Insurance. Get quotes from three or more insurers, and ensure you understand what’s in the policy you get.

As we mentioned previously, insurers break down their policies in different ways based on where you live. Insurers rate location differently. So, make sure you’re comparing apples to apples and that you know about the various types of policies.

The three basic types of homeowner coverage policies:

HO1: Basic Form – The basic form is also known as the ‘named peril.’ It contains a list of perils a tenant can experience on your policy. You won’t be covered if an incident is not listed.

HO2: Broad Form – The broad form covers more than the basic form. Specifically, the named perils and other issues like the overflow of a stream or water, falling objects, and the weight of snow and ice.

HO3: Special Form – The HO3 is the most prevalent kind. It brings together HO1 and HO2 and adds Additional Living Expenses, Liability insurance, Medical Payments, and personal property coverage. It’s an ‘open peril,’ which means it covers all perils except for those specifically excluded from the policy.

The costs for these policies will differ. When checking out policies, ensure you get the right HO form for an accurate policy quote.

How Do You Calculate Your Home Insurance Needs For a $600,000 House?

It is essential to know your home regardless of whether you’ve lived there for a short period or a long period. A home insurance policy is one of the most significant insurance choices you can make should you encounter a loss. Weigh these factors prior to making a buying decision.

1. The residence itself – You need to ensure your home is covered in the event of an incident.
2. Your possessions – You need your personal possessions covered should they be lost or stolen.
3. Other buildings around your home – You need coverage for garages, sheds, doghouses, and other structures on your property.
4. What if I can’t live in my residence? – You’ll want coverage so that you have funds for living experience if you can’t live at your home while it’s being rebuilt.
5. What if someone gets hurt at my home? – You’ll want coverage to foot the costs for expenses if someone is hurt on your property. It will cover medical expenses and liability.

Looking at all these factors will provide some indication of your target policy requirement and if $600,000 is enough coverage for your house.

What Do You Need to Cover in A $600,000 Home?

We touched on this previously, but let’s dig a bit deeper. What things should you cover in your $600,000 residence? A standard HO3 policy contains several coverage levels – and it has many exclusions. Exclusions include the following:

• Flood damage
• Rodent infestation
• Power failure
• Pet damage
• Neglect
• Foundation issues
• Mold damage
• Intentional damage
• Earthquake
• Defective construction

One thing to remember is that you can get riders to cover some of these exclusions.

Flood Damage

Consider flood damage. A Homeowners Insurance policy will cover water damage when the water falls from above. It will also cover most hurricane damage without needing a wind rider or an add-on deductible. That said, you won’t be covered if the water comes from out of the ground. You’ll have to buy a separate Flood Insurance policy to obtain coverage.

Earthquake Damage

Earthquake damage is another natural disaster that will not usually be covered via a regular HO3 policy. You can add Earthquake Insurance to protect your home and belongings.

Does a $600,000 Home Need Replacement Cost Coverage?

You have heard the saying that a car loses value the moment it’s driven off the lot. Something similar occurs when someone takes possession of a home. The moment the seller hands the keys to the buyer, the house starts to lose value. The depreciation isn’t as substantial as when a car drives off the lot, but it’s a valuation dip nonetheless.

When considering home insurance, you need to know about replacement cost vs. actual cash value. Here is the difference:

Actual Cash Value (ACV): When you buy a house, you pay $600,000. As time passes by, the house loses some value. If you file a claim ten years later, the house might be worth $570,000. That’s its ACV.

Replacement Cost Value (RCV): When you buy a house, you pay $600,000. As time passes by, the house loses some value. If you file a claim ten years later, you’ll receive $600,000. You will not get less than the full value even though there was depreciation. That’s its RCV.

There are some add-ons to RCV. Guaranteed and Extended Replacement cost. Guaranteed will factor into rebuilding your house to the specs of the original home. Extended will factor into the equation home value inflation. A home that cost $600,000 to construct may cost $700,000 to construct now. It is intended for people who reside in disaster-prone regions like Tornado Alley.

How to Save On Homeowners Insurance for a $600,000 House

There are various ways you can lower the cost of your Homeowners Insurance. One reason to speak to a live agent is that you can maximize your savings. It’s likely that the live agent will be able to find discounts to help lower the cost of insuring your home. We looked at options like bundling and going paperless, but you’ll find a few other options below.

Security cameras

One of the best things you can do is install security cameras on your property. It can be a great way to discourage criminal behavior, and you’ll likely get a lower monthly rate for Homeowners Insurance.

Where you reside

If your home is in a low-crime region, you’ll get lower premiums as a result.

Your credit rating

Insurers look at credit ratings when setting insurance rates. So, achieving a better credit score will allow you to get a discount on your house insurance premiums.

Construction code

If your residence is up to code or you’ve had it retrofitted for storms, you can save on your Homeowners Insurance.

Deductible and coverage limits

Reducing your policy limits can help you slash your premium.

Factors That Affect the Cost of Homeowners Insurance

It’s worth repeating that the location of your residence is a major factor on your premium. But you’ll see below other things that factor into what you’ll pay for coverage every month.

Age of the home

How old is your home? A newer home that is up to code will be cheaper to insure than an older home that might not be as up to code. A newer home is also usually more likely to have a tile roof rather than a composite shingle roof.

Weather

Living in an earthquake-prone region, along the Gulf Coast, or in tornado alley can impact the cost of insurance. You will need to by a rider for some weather-related coverage.

Building materials

What your house is constructed out of will influence what you pay for home insurance. Whether you go with wood and sheetrock or brick and mortar, what your home is made from will lower or reduce your premium.

Closeness to fire hydrant

The closer your home is to a fire hydrant, the lower your monthly coverage will be.

Other things that can impact insurance premiums include the number of people in your area, marital status, and state regulations.