If you get a mortgage to buy a home, your lender will require you to carry homeowners insurance. However, even if you buy your home with cash, homeowners insurance is a good idea to protect your investment. The cost of homeowners insurance varies based on a number of factors, but based on the level of coverage you get relative to the premiums you pay, homeowners insurance is among the cheapest forms of insurance out there.

Costs vary

Homeowners insurance can cost anywhere from a few hundred dollars a year to several thousand. It all depends on a multitude of factors, including how big your house is, how much it’s worth, where you live and your history of claims.

Size and cost of your house

The bigger your house is, the more expensive it is going to be to rebuild it, which will make your insurance premiums higher. The cost of your house plays a role as well. If you have expensive finishes or special features to your home that will be expensive to replace, such as a pool, it’s going to make your home more expensive to insure.

Where you live

This plays a huge role in your homeowners insurance costs. If you live somewhere where severe storms occur often, such as in “tornado alley” or along the coast of the Southeastern U.S., your rates will be higher. Likewise, if you live somewhere far from fire protection, your rates will be higher.

Claims history

If you have filed claims on your homeowners insurance in the past, you could face higher rates, because the insurer will consider you a higher risk, even if the covered event was out of your control.

A good way to keep your costs under control is to shop around and get several quotes before choosing an insurer.