How Much Is Homeowners Insurance Per Year? 
The annual premium for a homeowners insurance policy is an individual computation because the policy itself is tailored to the specific requirements of the named insured and the property being covered . Even though premiums and coverages may be similar in a neighborhood with similar homes , there will usually be peculiarities that will make most of them somewhat different . Every home has a fire rating . That fire rating is based upon proximity to a manned fire station and adequate water . Those ratings are published and used by most insurance companies . The fire rating is often a mystery to homeowners because they rely upon the fire station down the road one mile , however , their home is not in the district covered by that fire station . There are complicated agreements between fire districts that allow them to cross boundaries and assist in fires but each has a primary area of coverage that always receives priority . Homeowners often rely upon standing bodies of water and consider them adequate for firefighting . Again , that is a matter of evaluation and does enter into the fire rating . However , a swimming pool will not necessarily improve the fire rating of a home . Insurance companies mine the mountains of information available on losses and can identify the loss differences based upon territories . These territories are usually bounded by zip codes . They become a part of the rating process that determines the premium charged for coverage . The major determinant in the development of the premium for a homeowners policy is the cost of rebuilding the residence . Because a homeowners policy is based upon a formula , this amount drives the amount of coverages extended to personal property and non-attached structures on the property . This figure is determined , generally , by an outside evaluation system . Frequently the cost of rebuilding the residence doesnt match the price paid for the house or the estimated value of the house . While this is a source of consternation it is the cost of rebuilding the residence that guides the limits of the policy . There are certain risks that are excluded or limited . Coverage for some of these can be purchased in the homeowners policy . There might be a limit on the coverage for guns , jewelry , furs , currency and art . Some of this coverage can be purchased . There are exclusions for flood and earthquake and limited earthquake coverage is usually available for purchase . Flood insurance is almost always a separate policy . An often overlooked coverage is sewer backup . This is excluded in most policies but coverage can be purchased . Another is law and ordinance . The additional cost of repairing a house caused by changes in laws and ordinances is not covered in a normal policy but that coverage can be purchased . Liability insurance is the second part of a homeowners policy and could be the most important . The coverage extends to claims of personal injury and property damage and covers a wide range of scenarios . The homeowner can select the limit of coverage and this affects the premium . This is a place where a homeowner can be penny-wise and pound foolish . You can not have too much liability insurance . The computation for a homeowners premium is complicated . Some of the pricing is your individual choices and preference . Consult with a licensed agent for advice as choosing incorrect limits can lead to extreme displeasure at the time of a claim . 