The average cost of homeowners insurance varies from state to state and from city to city within that state. Three major determining factors that affect the average homeowner insurance premiums include:
- The homes age and type of construction of the home. New homes have a lower homeowner insurance rate due to the newer electrical, plumbing and heating systems. With these systems being newer there is less of a likelihood that an accident can occur immediately after the purchase of the home. In addition, the construction of the house is a determining factor. Brick, stone and concrete houses are cheaper to insure than homes that are constructed with soft, flammable materials such as wood.
- Home’s location. Whether the home is near a high flooding area or a high crime area can determine the average cost due to the amount of coverage one will have to purchase in order to protect their home entirely.
- The protection class. Protection class is determined by how far a home is located to a fire department and the distant the home is to a fire Hydrant. Every home is assigned a protection class from 1 to 10. 1 being the best protected and 10 have no fire protection.
Although there are other factors that determine the average rate of homeowner’s insurance premiums, these are the most common. These three factors can also become an unavoidable factor due to budgets and distance from a job or school; however, please discuss these factors with your real estate agent to help you get a better idea on how much your home insurance could be in that particular area.
2016 Average Cost of Homeowners Insurance
Although there has been a rise in the home insurance rates over the last ten years nationwide, the state of Michigan’s average cost of homeowners insurance is approximately ($797) per year according to Value Penguin. The state of Michigan is below the average cost of the nationwide annual cost by approximately twenty percent (21%). Making Michigan one of the most affordable states for homeowners insurance!
Some of the most affordable cities within the state of Michigan are:
- Grand Rapids
- Ypsilanti
- Holland
- Traverse City
- Saline
These cities above have homeowner insurance premiums that are about thirty-two percent (32%) below the average annual cost of the state average.
On the contrary cities such as:
- Detroit
- Flint
- Dearborn
- Saginaw
- Standish
The above MI cities have homeowner insurance policies that can range up to nearly one hundred and fifty percent (150%) above the average annual cost of homeowners insurance premiums.
What to look at when Comparing Insurance Companies
Some of the top “red flags” to look for when comparing companies for homeowners insurance is:
- Smart Industry Ratings. These are ratings based on the company’s customer service, financial strength and affordability. These ratings develop a percentage of the average weight of each attribute. Highly rated companies will have a minimum of an A- rating. The lower the rating the more risk is involved when working with that company.
- Reviews. When searching for a company, always look at their online reviews. If a company does not give an option for a review section on-site, consider opting for a company that does. Plus, don’t just look at reviews and testimonials on their website, look at 3rd party review sites such as Google+, Yelp, Facebook, or others that are harder to disguise. Regardless, reviews give customers the overall feel of the performance and personality of a company.
- Claims Services. These are broken down into two categories, claim processing and claim adjuster. Claim processing is the effectiveness and rapidness an insurance claim is processed. When a company is slow in processing it can result in an inconvenience for the homeowner when repairing the home. A claim adjuster is the person who is assessing the damage that was caused and provides a preliminary estimate. Again this needs to be done quickly and effectively so there are no inconveniences for the homeowner. These are determined through a rating scale.
Top Companies for Homeowners Insurance in Michigan
According to the smart ratings, the top ten companies for homeowners insurance in Michigan are:
- USAA
- Amica
- AAA
- Allied Insurance
- State Farm
- Allstate
- Farmers
- Auto Owners
- Citizens
- Nationwide
Although these companies are considered the top local companies, it is still imperative to search and look for the companies that best suit your specific needs. Remember to always look into area and other factors stated above before settling on a company to cover your home.
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