Here's How Much It Costs to Insure a $500,000 House

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  • Home insurance rates are determined by a variety of factors, including the age and condition of the home, the homeowner's claims history, location, and type and amount of coverage.
  • The average cost of a homeowners policy for a $500,000 home is $3,878, more than double the average premium cost of all homes.
  • Knowing these variables will help you find a policy that best meets your needs while also offering good value.

A $500,000 home costs more than double than the national average to insure.

Purchasing a home is an exciting milestone, but with it comes the responsibility of protecting your investment. Insuring your home is one way to do just that. Since COVID, the average sales price of a house sold in the U.S. has increased by 43%, going from $374,500 in Q2 2000 to $535,800 in Q4 2022. As the value of homes have gone up, so has the average cost of homeowners insurance, with the national average in 2023 at $1,787. Since more expensive homes have higher premiums, how much does it cost to insure a $500,000 property? Let's take a look. 

Factors that affect home insurance rates 

When you're trying to determine how much it will cost to insure your property, there are several factors that come into play. These include the age and condition of the home, the homeowner's claims history, geographic location, type and amount of coverage, and even credit score. Older homes may cost more to insure because they may require more repairs than newer homes. A homeowner who has filed multiple claims could expect higher premiums than one who hasn't made any claims. 

Homes located in flood-prone or earthquake-prone areas also carry higher rates since damage from natural disasters can be costly to repair. What's more, buying certain types of coverage, like earthquake or flood insurance, results in increased rates, while opting for higher coverage limits increases costs even further. Lastly, those with good credit scores get lower premiums as insurance companies see them as responsible individuals less likely to file a claim.

The cost of insuring a $500,000 home  

The average cost of homeowners insurance for a $500,000 home is $3,878, more than double that of the average of all homes in the U.S. More expensive homes typically cost more to insure since it is more expensive to rebuild or repair the home. Higher-priced homes also tend to have unique features such as a guest home or swimming pool. In addition, certain items within the home may affect the rate too, such as special items like jewelry or valuable artwork.

The cost may be lower or higher depending on where you live and the factors mentioned above. When shopping around for policies, it's important to compare quotes from different companies and read each quote carefully so you understand what is (and isn't) covered by your policy before making a decision.  

Insuring your home is essential if you want to protect your investment from potential damage or loss due to unforeseen circumstances, such as theft or natural disasters. Knowing what factors affect insurance premiums can help you get an idea of how much it will cost for your specific property so you can budget accordingly. Be sure to shop around for quotes from different providers to get the best coverage at the best price possible!

Our picks for best homeowners insurance companies

There are many homeowners insurance companies to choose from. We’ve researched dozens of options and short-listed our favorites here. Looking for a green build discount or easy bundle policies? Want an easy-to-use interface? Read our free expert review and get a quote today.

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