How Much is Homeowners Insurance on a $400,000 House?

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Updated: 14 March 2024
Written by
Cara Carlone
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Like finding a soul mate, getting married, and raising a family, buying a residence is one of the dreams many people have. Whether you’re at the start of your career or you’re older but have rented all your life, you may get to the point where you’re ready to buy a home. Going that route, however, means considering things like Homeowners Insurance. There are so many possibilities, though, so you must do your homework to know which to select.

The last thing you want is to select a Home Insurance policy that won’t cover everything from slab to roof. Over the course of my experience in the insurance industry, I’ve discovered that people looking for Homeowners Insurance want more than one or two options. They want to see a handful of options, understand what each policy affords, and see the costs. That’s the only way they can make informed decisions for themselves, their families, and their homes.

A homeowner who knows the ins and outs of homeownership will be a happier camper. That’s where this guide comes into the picture. In this review, we’ll help you understand the ins and outs of Homeowners Insurance on a $400,000 house and give you a list of the best insurance companies to consider.

Key Takeaways

  • Homeowners can safeguard their residences from risks by understanding the associated risks in their locations and getting appropriate coverage for their homes.

  • Homeowners Insurance costs are determined by the insurers’ take on the odds of your filing a claim. So, it’s largely a risk-driven determination.

  • Different states and cities have different risks impacting the movement of Homeowners Insurance rates. Risks can include things like earthquakes, floods, fires, and other environmental dangers.

How Much Is Homeowners Insurance on A $400,000 House?

Homeowners can expect to pay $3,180 each year for Homeowners Insurance on a $400,000 residence. That works out to $265 per month. Your actual premium will be determined on factors such as, firstly, the coverage tally and, secondly, the structure of your policy.

Insurers will comb over vital factors when putting together your premium:

Where you reside: Your address will be a major factor, too. If your region faces higher risks for fires or crime, this will be reflected in your monthly premium. The good news is there are ways to reduce your costs – more on that later.

Your deductible: After experiencing an incident, you will pay a deductible after which the insurance company will pay the balance. A higher deductible translates into lower premium. A lower deductible translates into a higher premium.

Claims history: Have you previously filed a claim? Like any other insurance product, your rates might be higher if you have a string of damage claims.

Important: Even if you’ve never filed a claim before, neighborhood crime can result in higher insurance rates.

Cost Of Homeowners Insurance by State

One might pay around $265 every month for a $250,000 home in Hawaii and $304 for the same policy in Oklahoma. It really is about location when discussing real estate.

For a $250,000 home, here’s a look at the premiums you’d pay in some other U.S. states:

State Premium
Texas $164
California $102
New York $126
Florida $165
Tennessee $146
Utah $58
Illinois $117
Washington $79
Maryland $97
North Carolina $108

Most costly states

In order to bring out the right point, let’s stick with the example of a 250K home. Oklahoma heads the list with Homeowners Insurance policies available for $304 a month. From there, here are the other most costly states in order:

State Premium
Kansas $257
Nebraska $246
Colorado $179
Arkansas $177
South Dakota $175

Cheapest states

Let’s now look at the cheapest states for Homeowners Insurance. You’ll see the lowest-cost state for Homeowners Insurance for a $250,000 home is Hawaii at $32 per month. From there, the other cheapest states are as follows:

State Premium
Vermont $55
Delaware $57
Utah $58
Oregon $60
New Hampshire $61

Cost Of Homeowners Insurance by Policy Limit

When buying a residence, you must insure it for its full value. The reality is that a decision as to whether to do that or not will likely not be left up to you. Why? Many lenders insist on it. Insurers will quote based on amounts of $100,000 or $50,000.

Remember this – your house’s sticker value is not always the sum you want for your coverage. The sticker value only accounts for your dwelling. Meanwhile, Homeowners Insurance safeguards your personal possessions in the event you encounter losses covered under the policy.

If you ever face a total loss, the payment should equal the value of your residence and possessions. Do you have costly items? If so, consider getting extra coverage. That way, you’ll have some protection for high-dollar items like artwork, jewelry, or heirlooms.

Cost Of Homeowners Insurance by Insurer

No two Homeowners Insurance providers are the same. That’s why you must get quotes from several different insurance companies before choosing a policy. As you learned previously, some insurance providers formulate their policies based on where you reside. Insurance companies rate such factors differently. When comparing insurers, make sure you’re comparing apples to apples rather than apples to oranges. You also need to consider there are various kinds of policies.

The three basic homeowner policies are:

HO1: Basic Form – This type of policy is also regarded as ‘named peril.’ It means there are various perils the tenant can encounter on your policy. No coverage will be offered if your incident isn’t included on the list.

HO2: Broad Form – If covers more than is covered under the basic form. It covers not only the named perils, but also other issues like damage caused by the weight of ice and snow, falling objects, and water or stream overflow.

HO3: Special Form – Most homeowners opt for this type. It merges HO1 and HO2, and it adds Medical Payments, Liability insurance, and Additional Living Expenses. The HO3 also includes personal property coverage, and it’s an ‘open peril’ policy since it covers all perils save for any perils specifically excluded via your policy.

Each of these will carry a different cost, so when pricing your policy, ensure you receive the correct HO form policy quote.

How Do You Calculate Your Home Insurance Needs For a $400,000 House?

It is vital to understand your home. That’s the case whether you have resided there for one year or several years. A homeowners policy is a big decision – one that you can’t make lightly.

Remember that it’s something to have in place in the event you suffer loss, so you need to ensure you have the right coverage for your needs before signing on the dotted line. Consider the following:

  1. The home itself –  This coverage is available should your residence be lost due to an incident covered by the policy.
  2. Other buildings surrounding your home – These include structures like garages, sheds, and even doghouses.
  3. What you own – Your personal possessions if they’re stolen or lost.
  4. What if I can’t live in my home? – This component of your Homeowners Insurance will cover living costs for the time you’re unable to live in your home. You’ll have funds to live elsewhere while your home is being rebuilt.
  5. What if someone gets hurt at my house? – This portion can foot the bill for costs should someone be hurt on your property. It will cover liability and medical expenses.

Looking at the various factors above will help you figure out the type of policy you need and if $400,000 is a sufficient amount of coverage for your home.

What Do You Need to Cover in A $400,000 Home?

While it was brought up earlier, it’s time to dig a little deeper. What should you cover in your $400,000 home? A HO3 policy has various coverage levels, but it also has a lot of exclusions. Among these are the following:

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

You can also add more coverage to make up for excluded items. Consider the following:

Flood Damage

Flood damage is a homeowner’s nightmare. Consider rainwater. A Homeowners Insurance policy will cover water damage caused by rain. The chances are good that it’ll also cover most damage stemming from hurricanes without a wind rider or an add-on deductible. You won’t be covered if the water rises damage stems from water rising from the earth, however. You’ll require Flood Insurance for proper coverage.

Collective Facts: If you own collectibles, don’t assume they’re covered fully by your Homeowners Insurance policy. You might have to buy a separate add-on policy to cover collectibles like artifacts, paintings, or collections.

Earthquake Damage

Earthquake damage is another type of natural disaster that isn’t usually covered by a standard HO3 policy. But you can get Earthquake Insurance coverage as an add-on option. It’ll protect your residence and possessions.

Does a $400,000 Home Need Replacement Cost Coverage?

You’ve probably heard it said that a car loses some of its worth the moment someone drives it off the dealership lot. You can say the same thing, more or less, about a house. The moment the seller hands the keys to the buyer, the house aging process takes place. While the devaluation isn’t as substantial as it is for a car, the passage of time takes a toll.

When looking at home insurance options, replacement cost vs. actual cash value is a vital consideration. Here is a look at the difference:

Actual Cash Value (ACV): When you buy a home, you pay $400,000. As your house gets older, its valuation dips. If you file a claim in a decade, your home might be worth $370,000. That’s its ACV.

Replacement Cost Value (RCV): If you buy the same residence for $400,000, your home will lose value as it gets older. That said, you’ll get the full $400,000 if you file a claim since no money is lost simply because of depreciation. You’ll get the RCV.

 

There are some add-ons for replacement cost value – namely, Guaranteed and Extended Replacement Cost. One the one hand, Guaranteed will rebuild your house to the exact specifications of your original house. On the other hand, Extended will factor into the equation house value inflation. A home that cost 400K to build may cost 500K to build now. It’s intended for people residing in areas susceptible to disasters such as Tornado Alley.

How to Get Home Insurance for My $400,000 House?

Buying Homeowners Insurance doesn’t need to be difficult. We understand you want insurance for a home worth $400,000. And we recommend that you get quotes from three home insurance companies. After you’ve gotten the quotes, what’s next?

Compare your quotes.

You must compare apples to apples and oranges to oranges in order to make proper decisions. Don’t skip over fine print. Read it carefully to check for what’s included and what’s excluded.

1

Check out discounts.

If you already have insurance coverage for, say, your car, check to see if the insurer offers discounts for multiple policies. You might be able to save a ton if you get your car and Homeowners Insurance from the same company. You might save on both policies. Where you’re employed and groups you’re part of can also entitle you to discounts. Ask your insurer if you can save by going paperless or by paying your premiums annually rather than month by month.

2

Talk to a live individual.

It’s possible to conduct much of the process online, but there’s still much benefit you can get by speaking with a live agent. The agent can help you get the right coverage and recommend discounts that you might otherwise have missed out on.

3

Explore options.

Cash value vs. replacement cost will factor into your monthly premium. It may also come in handy down the road to replace your house should there be a total loss.

4

How to Save On Homeowners Insurance for a $400,000 House

There are ways to save on your Homeowners Insurance coverage. But your chances of doing so will go up if you work with an agent rather than do it yourself online. An agent can look for discounts and help you reduce what you pay for insurance. We earlier mentioned bundling coverage and going paperless. Here are some other ways you can save money:

Where you reside

If your home is in a low-crime location, your home insurance rates will be lower.

Install security cameras

Installing security cameras will keep an eye on things, deter criminal activity on your property, and qualify you for a discount on your Homeowners Insurance.

Deductible and coverage limits

Reducing your policy limits can reduce your premium.

Your credit score

Insurance companies look at your credit score when determining your premiums. So, you can get a good discount if you achieve a good credit score.

Construction code

If your house is up to code or you’ve had work done so that it’s retrofitted for storms, you can get discounts.

Factors That Affect the Cost of Homeowners Insurance

We mentioned that where your home is located is a big factor in determining your Homeowners Insurance. But let’s look further at things that impact Homeowners Insurance.

Age of the home

How old is your residence? A newer home will cost less to insure than an older home. It’s more likely that a newer home is more current on codes. A newer home will also likely have a tile roof rather than composite shingles.

Building materials

The materials used to build your home will impact your Homeowners Insurance costs. So, whether your home is constructed out of brick, wood, sheetrock, or some other material, you’ll either pay more or less than average for coverage.

Proximity to fire hydrant

How close is your home to a fire hydrant? Being close to one will lower your Homeowners Insurance.

Weather

Living in an area prone to earthquakes, tornados, or other adverse weather systems can increase the amount you pay for insurance. You also must keep in mind that a rider in addition to your Homeowners Insurance is needed to cover some issues.

Other things that can factor into your insurance costs include your age, the population of your region, the state you live in, state regulations, and even marital  status.

FAQs

What is the cheapest state for $400,000 homeowner insurance?

Based on our extensive research, Vermont is the top choice if you want the most cost-effective place to buy Homeowners Insurance.

Is it difficult to get Homeowners Insurance on a $400,000 house?

No, it’s not hard to find Homeowners Insurance for a $400,000 house. You must find an insurer that sells home insurance in your region. When you start to fill out applications to get quotes, ensure you’re making fair comparisons. Don’t compare apples to oranges or vice versa. So, if you want an HO1 policy, ensure you find quotes for HO1 policies to get reliable information for decision-making purposes.

What isn’t covered by Homeowners Insurance?

Homeowners Insurance excludes 13 perils. But you can buy riders that cover some of these exclusions. The 13 named perils include the following: earth movement, flooding, mold or wet rot, pest infestation, wear and tear or neglect, some dog breeds, local building ordinance or regulations, power surges, intentional damage, home-based business liability, government action, nuclear hazard, and war.

What are the most expensive states for $400,000 Homeowners Insurance?

Nebraska, Oklahoma, and Kansas are among the costliest states to get Homeowners Insurance for a $400,000 home. These states are located in Tornado Alley. Despite this, there are things you can do to reduce your premium. One way is to buy a home constructed out of brick and to install storm shutters and shatterproof glass.

What does Homeowners Insurance cover?

HO3 is the standard or go-to Homeowners Insurance policy. It covers the home and other structures like the shed or garage, your personal property, other living expenses while you are unable to live in your home, and personal liability if someone is hurt on your property.

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