Many people say ‘Home is where the heart is’ but when it comes to homeowner’s insurance, your agent is going to want to know what your physical address , not necessarily where your heart lies. When you buy a homeowner’s insurance policy, there are going to be some factors that determine how much your premiums are regardless of any personal characteristics. Location is a big factor when it comes to assessing risk for a home. Many of us don’t have free reign to move anywhere we’d like and eventually plant roots at one point in our life. Where that happens will determine your housing insurance costs. That’s not to say that if you live in an expensive insurance state, you should move but you if you know how and why your rates are higher, you might be able to protect yourself better and plan for the unexpected.

How Your Location Affects Your Rates

puzzle pices forming house insurance
Like a puzzle there are many factors which ultimately determine your home insurance premium. Location is an important one.

It’s hard to pinpoint a whole region of the U.S. as the most expensive area or least expensive area because costs are going to vary state by state and they may all have a very different reason for their pricing. Each state sets a minimum amount of required home insurance coverage but when you add on additional coverage, as you should, you may find the cost of insuring your new home in Texas is significantly more than what it used to cost you in Wisconsin. So what gives? There are several things that make up that difference.


When an insurance company develops their pricing models, they are looking into the past. If they can determine a certain pattern of risk, they can build it into homeowner’s premiums so they can provide the adequate amount of coverage. This is the number one way insurers prepare for weather related disasters. Each and every year, the same state is susceptible to the same weather related risks. The plains of the Mid-West are known as Tornado Alley and if you want to avoid hurricanes, you should stay out of the Gulf States and the lower East Coast, especially Florida. California has earthquakes and big Texas gets it all with hurricanes, tornadoes and hail. If a state is prone to weather related disaster, your premiums are going to be higher but this ensures you have appropriate limits when it strikes.

High Crime Rates

It’s not just the winds howling into your back yard that raise rates but it’s the criminals prowling there too. Some states such as Massachusetts and New York aren’t that prone to bad weather besides a blizzard or two but due to their high crime rates, insurance companies see it necessary to have higher rates. This is because a criminal can do a lot of damage depending on their intent. A theft can be extremely expensive to cover, especially if it’s not an amateur crook. They will know where you keep your most expensive jewelry, your extra cash and how to remove all your electronics. They can also cause a lot of damage by breaking windows and destroying the inside of your home. If you’re a smart homeowner, you will already have compiled an inventory of your most valuable properties but the insurance company takes a hit when it pays you for them. That’s why crime riddled areas have higher rates.

Cost of Living

In general, if you live in a city that has a high cost of living, your insurance rates are going to be higher than average as well. Normally there’s an exchange of some sort that people accept to live there. New York City and San Francisco are a couple of the most expensive places to live so someone’s insurance rates are going to cost more than if you lived in Oregon. It doesn’t have anything to do with the weather or the crime. It’s the mere fact that one home is more valuable than the other and the insurance company needs to be able to recoup their losses if claims are filed.

No matter where you live, there are ways that you can keep your insurance rates down. Always make sure your house has the right amount of security and weather proofing. This will keep your claims down which in turn can protect your low rates. This is one area where you really do pay for what you get so while it may seem like a good option to skimp and save money, don’t do it. You never know what can happen and protecting your home investment is cheaper than replacing it.

Home Insurance In Your State