Home insurance calculator: Estimate your rates and coverage limits

Calculate your home insurance costs and coverage needs 

One of the most important parts of homeownership is securing a homeowners insurance policy to protect your home and belongings against the unexpected. But how much should you expect to pay for home insurance? And how do you figure out how much insurance you need? To get the answer, start by using our homeowners insurance calculator.

How your home insurance rates are calculated

The average cost of homeowners insurance in the U.S. is $1,249 a year, according to the National Association of Insurance Commissioners. [1] But insurance companies consider multiple factors when setting your rates, including:

1. Your home’s location 

Your insurance premium (the amount you pay for coverage) is largely determined by your home’s risk of being burglarized or damaged by a natural disaster like a hurricane or wildfire.

What does this mean for you? Homes in inner cities, close to the coast, or in wildfire zones are more likely to see higher rates than those in more remote areas free of natural disaster zones.

2. Your home’s characteristics

The age, square footage, number of rooms, and building type of your home, as well as the condition of its electrical and plumbing, and the age of its roof can all affect your insurance rates.

What does this mean for you? Larger homes or houses with outdated electrical, plumbing, or construction will see higher rates, since there’s a greater chance you’ll have to file a claim. Homes with pools, trampolines, or even dogs will also see higher rates due to the increased risk of an accident happening.

3. The coverage amounts in your policy

Insurance rates will vary depending on the amount of property you’re insuring. That includes your home’s replacement cost, as well as if you have expensive art and electronics to insure, or how much coverage you want for personal liability.

What does this mean for you? The more expensive your home is to rebuild and refurnish, the higher coverage levels you’ll need — meaning higher premiums to match.

4. Your policy deductible

A deductible is the amount you pay out of pocket when you file a claim before the insurance company kicks in to cover the rest.

What does this mean for you?  If you choose a high deductible, you’ll pay lower rates, and vice versa.

5. Your credit score and claims history

Insurance companies perceive homeowners with lower credit scores or multiple past claims as a higher risk of filing a claim.

What does this mean for you? Even one claim in the past few years or a credit score below 670 could mean higher home insurance premiums. 

How to estimate your home insurance coverage needs

When you’re shopping around for homeowners insurance and comparing quotes from multiple companies, make sure the coverage estimates in the quotes you’re getting reflect your actual coverage needs.

There are six main types of coverage included in most standard home insurance policies:

1. Dwelling: Pays to repair or rebuild the physical structure of your home after a covered loss.

2. Other structures: Covers other structures not attached to your home, including detached garages, sheds, fences, gazebos, walkways, and more.

3. Personal property: Pays to repair or replace everything inside your home — from furniture and electronics to appliances and clothing — after a covered loss.

4. Additional living expenses: Covers hotel stays, dining out, dry cleaning, and more when you’re unable to stay at your house while it’s being rebuilt after a covered loss.

5. Personal liability: Pays for legal and medical expenses if someone is injured or their property is damaged while at your home and you’re found liable.

6. Medical payments: Covers medical expenses if someone is injured at your home — regardless of who is at fault.

The limits you choose for each of these coverage types is how your home insurance premium is calculated. Many insurance carriers describe each of these coverage limits as a percentage of your dwelling coverage.

To ensure you’re getting an accurate cost comparison, you need to calculate three numbers:

• The replacement cost of your home and other structures at today’s construction and labor prices

• The value of your personal belongings — not including vehicles

• The value of your combined assets in case you’re held liable for an accident and sued

Estimate the replacement cost of your home and other structures

Your replacement cost estimate, meaning an estimate of how much it would cost to rebuild your house from the ground up, will inform how much dwelling coverage you need. 

Remember: Your dwelling coverage limit should be equal to your home’s rebuild cost, not its fair market value or sales price.

There are four different ways to get a replacement cost estimate of your home: 

1. Use Policygenius’ home insurance calculator

For a quick and accurate estimate, use our homeowners insurance calculator. You’ll simply answer a few questions about your home, like its square footage, the type of heating system you have, or whether you have a basement. We’ll send you an estimate detailing your coverage amounts as well as rates with multiple insurance companies.

2. Estimate your home insurance coverage limits yourself

You can find the average price-per-square-foot in your area by contacting a local builder or contractor. Then multiply the estimated amount by your home’s square footage. This will give you a general idea of how much dwelling coverage you should have in your policy.

3. Use coverage limits from a previous policy

If you’ve previously insured your home with a different company, you can transfer the information in that policy to your current insurer, provided all the information in the old policy is up-to-date and correct. Keep in mind your dwelling coverage amount should be updated every year to reflect any increases or decreases in the cost of construction material. If you go this route, the insurance company will likely ask for your old policy’s declaration page to verify the information.

4. Hire an appraiser

If you’re into playing it safe, you could hire an appraiser that specializes in replacement cost appraisals to get an up-to-date rebuild cost valuation. The appraiser will conduct a component-by-component analysis of the home from the ground up and give you an accurate estimate of how much it would cost to rebuild the home based on current construction materials and labor.

When calculating your dwelling coverage limit, this is also a good time to add up the cost of rebuilding any outside structures not attached to your home.

Estimate the value of your personal property

You need enough personal property coverage to cover all of your personal belongings, like your clothes, furniture, electronics and jewelry. Although your personal property coverage limit is typically set at 50% of your dwelling coverage limit by default, most insurers will give you the option to:

• Increase your limit

• Upgrade your loss settlement terms to replacement cost instead of actual cash value

• Modify your payout limits for expensive valuables

The best way to gauge your personal property coverage needs is to take an inventory of everything you own. Inventories make it easy to categorize and value your personal belongings by room and property type. The type of items you’ll want to include in your inventory include:

• Appliances

• Art

• Camping and sports equipment

• Clothing

• Electronics

• Expensive valuables

• Furniture

• Instruments

• Jewelry

• Kitchenware

Most insurance companies have reimbursement limits, or sublimits on rare and expensive types of personal property. A sublimit is the most an insurer will pay out in the event of a covered loss.

Jewelry, art, furs, expensive electronics, and rare and vintage instruments typically have sublimits in the range of $1,000 to $2,500. To increase reimbursement limits on your most expensive valuables, consider adding a scheduled personal property coverage endorsement to your policy.

Estimate the value of your assets

Personal liability coverage is the part of your policy that covers your assets in the event you’re held legally responsible for injuring someone or damaging their property. Common liability insurance claims involve “slip and falls” inside or outside the home, dog bites, and trampoline accidents. Between legal fees and the court settlement, lawsuits are expensive and can put all of your assets at risk.

Most insurers offer personal liability limits between $100,000 and $500,000 in $100,000 increments. However, homeowners with a lot of risk associated with their property — say you have a pool at the edge of a cliff — should consider getting more than the standard amount of liability or medical payments coverage.