Home Insurance Calculator: Estimate Your Rates

WRITTEN BY: Mark Romero

UPDATED: MAY 08, 2023 | 3 MIN READ

There is more to buying a home than the down payment and a mortgage payment. First, you must budget for recurring home ownership costs such as home insurance rates, property taxes, and maintenance around your home. The average yearly cost of homeowner’s insurance is roughly $1,899, but rates can vary depending on the company, which is why using a home insurance calculator or method to estimate costs helps you budget.

How To Estimate Your Homeowners Insurance Coverage Needs

A homeowner’s insurance calculator is a great way to estimate your future costs before getting a quote. Use a homeowner’s insurance calculator, or follow these steps to estimate the costs. 

Determine how much home insurance coverage you need – there are six parts to a homeowner’s insurance policy, and each piece’s coverage determines your premium. The six parts are below:

  • Dwelling: which pays for damage to your home
  • Other structures: which covers structures unattached from your home like sheds and fences
  • Personal property: covers your belongings
  • Loss of use: pays living expenses if you are unable to stay in your home
  • Personal liability: covers injury or property damage to someone else
  • Medical payments: treatment of someone injured on your property, regardless of fault

Estimate the cost to rebuild your home from the ground up

When disaster strikes, a standard homeowners insurance policy covers you. To protect your home from natural disasters, you want to ensure the dwelling coverage limit is high enough to cover rebuilding your home from the ground up. This is extremely important when trying to determine how much home insurance is enough.

When considering dwelling coverage, it should be equal to the rebuild or replacement cost, NOT the current market value.

A home insurance calculator helps you estimate the costs of replacing your home. You get a quick and accurate estimate by adding a few details of your home, such as square footage, address, and the year it was built.

Estimate the value of your personal property

You want enough personal property coverage to replace the value of all your personal belongings, including furniture, electronics, clothing, art, and jewelry. The best thing to do is keep a home inventory of all your belongings. That way, you know exactly what is in your home and its worth.

Estimate the value of your assets to determine your liability coverage limits

If someone sues you because an injury occurred on your property, you want personal liability coverage that replaces everything you own, including vehicles, personal possessions, and properties. Common liability claims include dog bites, slip and fall injuries, and trampoline-related accidents. Lawsuits can be expensive due to medical bills and legal fees.

Home Insurance Calculator: Estimating Your Costs

A home insurance calculator is an excellent way to budget for upcoming expenses, so you aren’t surprised down the road. There are a few things to decide first to determine your home insurance costs.

Choosing your deductible

Your home insurance deductible is the amount you must pay out of pocket when making a claim. On average, homeowners spend between $500-$2,000 for a deductible. The higher your deductible is the lower your premium. It’s important to choose a deductible that makes sense for your family. For example, if you can’t afford $2,000 out-of-pocket if a loss occurs, you should consider a lower option.

Take other coverage types into consideration

Factoring in other coverages that you might need is essential. Your home’s physical characteristics could affect your insurance costs. The roof must comply with current building codes, and if you have a swimming pool, it likely requires extra liability coverage.

Standard home insurance doesn’t cover you for floods or earthquakes, so purchasing separate coverage should be a consideration. This means you might need separate flood insurance or earthquake coverage. Depending on your area, there may also be exclusions or policy limits for other types of disasters.

Fortunately, an average home insurance policy does cover other structures on your property, such as garages and sheds, as long as the damage happens because of a covered loss.

Use a basic formula to calculate your home insurance premium

A quick way to determine the amount of coverage you need and the cost of home insurance is to multiply the total square footage of your home by local, square-foot building costs.

What’s the Difference Between the Cost of Insurance and Property Value

All home insurance companies have different algorithms to determine your premium. So a quick way to determine the amount of insurance you need is by dividing the value of your home by $1,000, then multiplying the rest by $3.50. For example, if your home is valued at $400,000, you would need a policy that costs roughly $1,400.

Of course, if you need special endorsements above the standard coverage amount, it will increase your homeowner’s insurance premium more.


What are the different types of standard home insurance policies?

Insurance companies offer eight types of homeowners policies: the HO-1, HO-2, HO-3, HO-4, HO-5, HO-6, HO-7, and HO-8.

How much is insurance on a $50,000 home?

On average, the annual premium for a $50,000 home is $757.

What are the benefits of homeowner’s insurance?

Homeowner’s insurance protects the home that you live in and all of your belonging in case a disaster strikes.

What’s the average cost of homeowner’s insurance in America?

The average cost of homeowner’s insurance is $1899, but it varies depending on where you live, the value of your home, and your deductible.

What’s the average cost of insurance per month?

According to MarketWatch, the national average homeowner’s insurance premium costs $1,249 per year. That’s $104.08 per month.

Home Insurance Calculator: Getting Accurate Quotes

The home insurance calculator is an excellent way of determining costs. Calling an agent is also easy to determine the cost of your home insurance needs. It’s best to call around to multiple home insurance companies for quotes so you know you’re getting the best rates for your home insurance.