How much does homeowners insurance (hazard insurance) cost?


It is the cost of the house you are buying that determines how much homeowners insurance costs. Usually, at closing the lender will ask you to pay your hazard insurance for a year. It will cost you between 0.3% and 1% of the loan amount in the least and the more expensive the house, the higher hazard insurance you will pay.

If you are a homeowner with potential safety hazards such as a swimming pool, you may like to purchase additional liability coverage and your hazard insurance cost will be higher than average. Also, if you agree to a higher deductible, you will reduce the hazard insurance significantly - up to 35% in most cases.

Replacement Cost vs Market Value Homeowners Insurance

A replacement cost hazard insurance will provide for completely rebuilding your house to its current state in case it is completely damaged - burnt to the grounds, for instance. Any renovations and expensive items that you have proof of (on inventory lists or video tapes) will also be taken care of the insurance policy in case you have signed for replacement cost hazard insurance.

Unlike replacement cost, the market value coverage will only restore the market value of any lost items and the house. Perhaps you bought it for $100,000 and improved its structure and design and your house is worth $250,000 to be restored. However, the market value is $100,000 according to the last appraisal and the insurance company will not cover any additional improvements made since last evaluation.

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