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After buying a house in the United States, you will buy home insurance for the house. Today, I have sorted out how much home insurance is in the United States and how to pay it. Let's take a look!
1. Is Home Insurance Premium High in the United States?
On average, homeowners spend about $1,500 per year on insurance for their homes. However, premiums vary widely and depend on many factors, which can generally be broken down into four areas.
1. Condition of the house:
Typically, insurance companies may ask you for detailed information about your home or collect information from public records and documents in your city or county. The condition of facilities such as the roof, plumbing, heating system, wiring, etc. will greatly affect the insurance rate.
2. Housing reconstruction price:
Another important factor in determining the price of home insurance in the United States is usually to assess the cost of rebuilding per square foot in your area. Generally, based on current construction prices, the average cost of residential real estate in the United States is between $100 and $200 per square foot. Because if the house is damaged or completely destroyed by natural disasters such as tornadoes, floods, fires, etc., the insurance company will pay for your reconstruction bill. The greater the possibility of natural disasters in your city, the more expensive the homeowner's insurance premium will be.
3. Personal information:
A homeowner's credit score, age, and other personal factors also play a role in the cost of home insurance in the U.S. Typically, homeowners with high credit scores and low claims histories receive better insurance rates.
4. High-risk characteristics:
Home insurance companies in the United States will factor "potentially high risks" into their premium assessments, such as swimming pools, trampolines, and even pets. For example, a family member injured by a facility or a pet dog biting someone could result in an expensive insurance claim. Conversely, you can effectively lower your home insurance rates when you add safety features to your home, such as a home security system or fire sprinklers.
2. How to Pay Home Insurance Premiums in the United States?
Scenario 1: Pay directly to the insurance company
If you are a full buyer or a homeowner who has paid off the entire loan, you can pay the premium directly to the insurance company.
Case 2: Pay to the lending bank, withholding payment
It is not common for mortgage buyers to pay the insurance company directly. Usually, the lender (such as a traditional bank) withholds the payment. You must pay the mortgage and insurance premiums to the lender every month, and the insurance premiums are placed in a special payment account and automatically deducted when the insurance bill is due.
All payments will have an itemized statement showing how much of your monthly payment goes toward your mortgage (principal and interest) and how much goes toward homeowners insurance and other costs.
