What state's have cheap house insurance?

[Robyn55]

As many posters have noted - homeowners' insurance is usually based on replacement cost when it comes to the house. Can be replacement or actual cash value when it comes to contents (although some states may mandate one or the other). Replacement cost for the house is certainly dependent to a large extent on its square footage. But it can also depend on how the house is built (high end/low end/in the middle).

Also - insurance doesn't cost the same statewide - especially in a large diverse state like Florida. We live on a barrier island - but it's in northeast Florida - not south Florida. Our structure (2800 sq under A/C with a 3 car garage and some covered porches) is insured for $620k (replacement cost). We have $465k in contents coverage (replacement cost). The latter is probably a bit on the high side (the coverage has been indexed for inflation). But it's not ridiculously high. We have a lot of optional endorsements - although they're more for things like bursting pipes and earthquakes (this area has had earthquakes) than jewelry or fur coats (when people are quoting their seemingly high rates - they may be forgetting that they're paying a fair amount for $10k in extra jewelry coverage). We have a 2% windstorm deductible - about $12k. It's the deductible that makes the most sense for us.

Our premium - paid last month - with State Farm Florida - was $2169. Which I think is pretty reasonable. We also pay $579/year for maximum federal flood insurance ($250k structure/$100k contents). Also reasonable IMO.

Note that our policy shows premium reductions totaling $1856. Almost as much as the total cost of the policy! There are discounts for building in accordance with the 1995 building code - our claims record - and almost $1000 as a wind mitigation discount. Because of the way we built our house (no gables - hip roof - impact windows - impact garage doors - etc.). There is also a $300 discount because we have our auto policy with State Farm (doesn't make sense to save $150 here shopping around for your auto policy because you'll just pay more for your homeowners' policy).

One of the biggest issues in Florida in recent years when it comes to the cost of homeowners' insurance hasn't been windstorms. It's fraudulent sinkhole claims:

New Florida law takes aim at sinkhole fraud

I'm not an expert in the area - but it seems like a lot of homeowners whose houses weren't built properly/on sturdy foundations developed structural defects - like cracks - that homeowners then claimed were the result of sinkholes. This type of fraud increased a lot after the building bust in 2008 (no surprise there). When we renewed our policy a few years ago - we had to have a "crack inspection". To make sure our house didn't have cracks that we might later claim were the result of sinkhole damage.

Our rates have been pretty stable over the last decade or so. And I sure don't shop the policy around every year. Doesn't make sense for us. Although it might make sense for people elsewhere.* Because there are so few companies here in Florida that have more than 2 nickels to rub together. Also because we have a large umbrella policy - which few companies here offer. Also because State Farm has been good to us over the decades. Keeping rates relatively stable and staying in the market. At least for us. Note that State Farm Florida did eliminate a lot of its homeowners' policies a while back. First to go were the people in the highest risk areas. But second to go were the folks who kept the security blanket of their State Farm homeowners' policies while shopping their auto policies around every year.

We've only had 1 claim with State Farm. Parking lot fender bender where we were deemed at fault. State Farm handled the property damage claim the other guy had in a reasonable manner (our damage was less than our deductible). Chubb was our carrier when we lived in Miami - but it dropped us when we moved here. Chubb is writing in this area now - but I think minimum annual household premiums it wants these days are policies that cost a total of at least $25k. Not in our league. Overall - I am sure State Farm Florida will do something to pi** me off one day. But - so far - so good. Robyn

*There are lots of factors that enter into the cost of insurance. I think it's perhaps possible in some places to get the best deals if you shop your policies "a la carte" - but I suspect packages with multiple policy discounts will work better for a lot of people. One consideration for us seniors is a company like State Farm doesn't seem to drop your auto (or other) insurance policies when you reach some arbitrary age. It still insures my father (auto/renter's/umbrella policies).

[Robyn55]

Originally Posted by modhatter

Without living in multiple states, I can not say where the cheapest place is, but I suspect it is strongly tied to the likelihood of natural disasters. Home insurance in Arizona and Nevada seems reasonable to me, compared to Florida. In Nevada, a $200-$250,000 house costs around $650-$700 a year. In Florida, the same house would cost over $3,000 a year in insurance.

Arizona and Nevada have little threat of natural disasters. I'm sure there are other states as well.

What part of Florida are you talking about? Not true where I live. Robyn

[Willistonite]

Mod Hatter,
Where were you living to have $3000 insurance bill in Florida for a $200-250,000 house? That seems too high.
You must have lived long ways from a fire department. Which adds to the bill.

[Robyn55]

Originally Posted by saralvr

When did you buy the home? Insurance companies have to pay to replace your home. They've established its current value at 430k, therefore you are charged accordingly.

In what state(s) - if any - is that true (I don't know)? Here in Florida - we have what's called a "valued policy" law. Which means that if your house is totally destroyed - and - although you have a policy for $350k - the actual replacement cost is only $300k - the insurance company still has to pay you the policy limits - $350k.

OTOH - if you have a $350k policy - and it costs you $400k to replace your house - you'll only get the $350k - your policy limits.

One tricky area of homeowners' insurance is the additional cost of bringing a house up to current codes after a loss - often required by state laws/local building codes if X% of the house is destroyed. In Florida - where this provision is triggered in the event of a 50%+ loss IIRC - it's an optional coverage/endorsement. Our current "bring it up to code" endorsement is for an additional 25% over and above our basic coverage. Robyn

[Robyn55]

Originally Posted by Jimrob1

Here in FLA I pay nothing, because I can't find an insurer for this old mobile home. I've lived in other states and FLa is the worst for anything to do with insurance. Be it home or car it is outrageous cost. Or you can't find one for your property. Alot of people in this state have to self insure.

When it comes to auto here - you have to buy certain minimum coverages to comply with state law. What do you think is an outrageous amount for various amounts of auto insurance (suspect if you give your number - you'll have some people who live in states with very high auto insurance costs LOL). We're paying about $1k/year for $250/500k full coverage on a 2010 Lexus SUV. Doesn't seem bad to me.

Not surprised you can't find coverage for an old mobile home. It would be like trying to find health insurance for an 86 year old pre-Medicare. Robyn

[Robyn55]

Originally Posted by Scooby Snacks

That is only one cost of home insurance. People think it's really cheap to own a home in TX until they hear about our insanely high property taxes. The taxes on our 1800 sq ft home, built in 1997 run $5000/year to pay for our lousy public schools

Again - property taxes aren't based on square footage but assessed valuations. Which may or may not be anywhere near current market value. Depends on the state/part of a state where the house is located. Also any adjustment/reduction mechanisms in place (like prop 13 in California or the Save Our Homes amendment in Florida). We're paying about 1% of the market value of our house in property taxes these days. Because our taxes have been kept low by the Save Our Homes amendment. If a newcomer from outside Florida bought our house - the taxes would go up a lot. OTOH - some of the benefits we have from the SOH amendment are portable if we move elsewhere in Florida.

I think retirees underestimate the value of these tax savings when they're planning to live in a state for a long time. Especially in states like California - which are generally thought to be high tax states.

Note that our county school system is the #1 rated here in Florida. I can't say our schools are the best from personal experience - but they seem to be pretty good for Florida/the SE. At the same time - our property taxes are a lot lower than many counties in the state - especially counties in south Florida. Because we don't have something like a public hospital with a lot of indigent patients. When my parents had a house in Broward County (Fort Lauderdale area) - about 10% of their property taxes were going to indigent care at the local public hospital. We had the same when we were living in Miami/Dade County. Robyn