Home Insurance in Kentucky


UPDATED: NOV 2020 | 1 MIN READ

They say there’s no place like home – and there’s no insurance like home insurance! To keep your dwelling safe both from natural hazards like fire and tornadoes, as well as man-made hazards like theft and mine collapse, home insurance is a vital purchase. Kentucky rates for home insurance are relatively average, and a FAIR program is available for those who don’t qualify for standard market home insurance. But Kentucky’s high rate of natural disasters and low funding for disaster relief can make it even more important to purchase comprehensive home insurance coverage for natural disasters. Understanding more about premium prices, coverage requirements, and property risks can help you in your search for the perfect Kentucky home insurance.

  • Fun fact: Post-It notes were invented in Cynthiana, Kentucky!

Average Rates in Kentucky

In Kentucky, home insurance prices are pretty middle-of-the-road – the average annual premiums of $1,109 in this state fall just about $100 below the national average of $1,211. In the Insurance Information Institute’s ranking of annual premiums from most to least expensive, Kentucky is in 26th place. Other states with similar premium prices include Wyoming ($1,156 average premiums) and Hawaii ($1,102 average premiums).

What can renters expect to pay for insurance? Just as with homeowner’s insurance, Kentucky is the 26th in line when it comes to expensive premiums. On average, renters pay $168 compared to $180 nationally. Though there isn’t a wide range of prices in renters’ insurance, similarly priced states include Kansas (with $172 average premiums) and Illinois (with $167 average premiums).

Kentucky Legal Insurance Requirements

Having home insurance is not a requirement of Kentucky state law – even so, mortgage companies and lenders nearly always ask you for it. Even if your home doesn’t qualify for standard home insurance on the market, Kentucky has a Fair Access to Insurance Requirements (FAIR) plan that provides the most basic coverage – up to $150,000 for private property and $1 million for commercial property. This FAIR plan offers the following:

  • Protection of Dwelling, Structures, and Personal Belongings: The “perils” or damaging events that are insured for include fire, lightning, wind, hail, explosion, smoke, damage from vehicles or aircraft, vandalism and malicious mischief. Keep in mind that the “personal belongings” covered by this basic insurance encompass furniture, appliances, and clothing – NOT antiques, jewelry, or luxury items.
  • Theft and Personal Liability. The FAIR policy offers comparatively limited coverage compared to standard market home insurance, but will cover a certain amount for legal fees and associated expenses should someone sue you for damages to their person or belongings while on your property.

More comprehensive coverage is offered as part of a standard Kentucky market plan, such as medical expenses (for when someone besides you or your family is injured, regardless of fault) and loss of use (for cost-of-living expenses while damage to your home prevents you from living inside it.

In addition, due to the efforts of the Kentucky Mine Subsidence Insurance Fund, an endorsement that insured against damage from underground mine collapse is automatically added to all Kentucky home insurance programs in counties that participate in the program. The limits for this endorsement are: up to $300,000 for damage to a surface structure, as well as $25,000 for additional living expenses.

But what are some things that standard Kentucky home insurance doesn’t cover? Common exclusions include flooding, earth movement/earthquakes, sinkholes and groundwater damages, normal aging and rotting of home, poor workmanship, and damage from animal and insect infestations. In cases when a policy excludes covering damages from mold, the Kentucky Department of Insurance mandates that insurance companies state so clearly on their policies.

Common Risk Factors in Kentucky

Kentucky Emergency Management warns that Kentuckians face many kinds of natural disasters that may damage the home: tornadoes, flooding, winds, lightning, wildfires and winter storms being the most salient among them. Moreover, in 2018, Kentucky was ranked 48th among all 50 states in disaster preparedness, due to its low emergency management budget and the comparatively high number of states of emergency that have been declared since 1953. Considering this, it may be more important than ever to ensure you have home insurance that will adequately protect your home from natural hazards.

Even though fire and wind damage from tornadoes is covered by standard home insurance, for earthquake damage additional endorsements will need to be purchased – the eastern and western edges of the state lie along the East Tennessee Seismic Zone and the New Madrid seismic zone respectively.

That said, severe earthquakes aren’t frequent even from these seismic zones – of far greater danger to Kentucky properties is flooding from seasonal storms. Since flood insurance is not offered by standard home insurance in Kentucky, it must instead be purchased through the National Flood Insurance Program, if you live in a participating community.

Insurance Demographics/Statistics in Kentucky

Insurance companies like to know the likelihood the person they’re insuring is to make an insurance claim, as well as how much money is needed to give them adequate coverage. To offset the risks associated with insuring “high risk” individuals, insurance prices may be higher depending on things like local crime rates, or whether your home is near a fire hydrant. When you’re considering fair prices for your home insurance, it can be useful to consider the following:

Your Home’s Value

Insurance policies are primarily based around the value of your home, which is calculated either in terms of replacement cost or actual cash value. The most common of these – replacement cost – means the amount of money needed to rebuild your home using similar materials and with current labor costs. At times and especially with older homes, home value is calculated based on actual cash value. This has more to do with the current market value of an item – how much It would cost to repair or replace taking into account depreciation.

In Kentucky, the average home value is $149,987, far less expensive than the national average of $248,857. Although this can lower the overall cost of a home insurance policy, the market value of a home isn’t an exact predictor of home value as evaluated by insurance companies. This is because included in the market value of a home is the value of the land that comes with your property. Insurance companies are concerned with replacing the structure of a home and related structures – not land – so this may affect the overall price of your insurance.

Local Crime Rates

Home insurance is designed to protect your home from theft and malicious destruction of property. Therefore, areas with high rates of property crime can be considered “high risk” by insurers and potentially face higher insurance costs. The FBI Uniform Crime Reporting Program records property crime rates in all 50 states. After subtracting car theft from the totals (car theft isn’t covered by home insurance) the property crime rate in Kentucky is 1.73%, a little bit below the national average of 1.97%.

Your Income and Education

When it comes to what individuals are considered “low risk” for making insurance claims, generally having good credit, a high income and a college degree can weigh in your favor, though this is most significant with auto insurance. Regardless, having a high income makes insurance payments a lot easier to bear. Based on information from the Census Bureau, the average household income in Kentucky is $50,247, falling beneath the national average of $63,179. Kentucky also lags a little in educational attainment, with 23.6% of people over the age of 25 having earned a bachelor’s degree or higher, compared with 32.06% nationally.

Where To Purchase Home Insurance in Kentucky

With an understanding of some of the basics of Kentucky home insurance, you can compare the prices and policies of a range of insurance companies to find the best home insurance for you. Agilerates.com can make this even easier, giving you accurate quotes by a comprehensive list of insurers in your area. Even if you aren’t a new homeowner, every year as your home insurance policy renews you can examine your insurance’s competitors to see if there is a better deal for your home insurance. According to the Pulse Whitepaper from iii.org, only 44% of homeowners compare prices of different insurers at renewal time, and only 17% do so online. That means more than half of all homeowners are leaving money on the table at renewal time. Use Agilerates.com online form to get matched with a local agent, get free quotes, and shop around!

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