A Homeowners Insurance Calculator Needs a Human Touch

The lure of online homeowners insurance calculators is great, but even the best ones generally only tell you how much coverage you'll need to protect your home rather than providing you with information about the cost of homeowners insurance. That amount of coverage you'll need is important, of course, when you're trying to estimate homeowners insurance, but it's not the end-all in determining the cost of homeowners insurance.

That cost is particularly important when you buy a house. You want to make sure you calculate homeowners insurance when you're deciding whether you can afford a purchase, because your mortgage company will require you to have it before issuing your loan.

To Estimate Homeowners Insurance, You Must Consider Several Factors

The best way to calculate homeowners insurance is by talking to a licensed agent, not simply plugging some numbers into a homeowners insurance calculator. Entering the square footage and the ZIP code into an online calculator is helpful because it will give a range of what you need for dwelling coverage, but the amounts could vary greatly.

Dwelling coverage is the part of your homeowners insurance that will pay if the structure of your house is damaged or destroyed by a covered peril such as fire, wind or hail. Your dwelling coverage limit should be set as the amount needed to rebuild the home completely.

Several variables provide reasons why the number spit out by a homeowners insurance calculator might not be the precise amount you need. For example, you must always remember to factor in any improvements or upgrades you've made to your home - they could drive up the cost of homeowners insurance. Calculators, even sophisticated ones that address upgrades, won't give you the precision you need if you're trying to estimate homeowners insurance premiums.

Calculate Homeowners Insurance Quotes the
Old-fashioned Way

When you speak with a licensed agent about getting an estimate, homeowners insurance can seem pretty clear-cut. As you might have guessed from the questions on the homeowners insurance calculators, the agent will find out your location. This step is so he or she can determine local building costs. The location also will tell the agent whether you live in an area that's at risk for natural disasters. You'll also be asked for the square footage of your home - the bigger the home, the more it likely will cost to insure it.

But you'll also be asked some other questions. Do you have upgrades such as granite countertops or high-end floors, for example? Those will drive up the value of your home, which means any estimate of homeowners insurance would be higher but more accurate. Remember, you must buy enough coverage to rebuild your house if needed.

The cost of homeowners insurance also depends on a couple of other factors. Your insurance score, determined in part by your credit score, is used by carriers to gauge your level of responsibility, which again figures into the risk involved in insuring your home. Another factor used to estimate homeowners insurance is your claims history.

A homeowners insurance calculator can't do all that. It takes some human give-and-take to do the fine-tuning involved in determining the cost of homeowners insurance. That's because you'll also need to factor in any discounts you would be eligible to receive, which could lower your premiums.

Some of the most popular discounts to ask about when you calculate homeowners insurance include bundling your home and auto insurance with the same carrier, which can save you up to 20 percent on your premiums. You also could receive a discount if you have a security system or if your house was built in the past 10 years.

Discounts vary greatly by carrier and state, so you'll never be able to plug them into a homeowners insurance calculator to get an idea of how much you'll pay for coverage. You'll have to trust a licensed agent for that kind of information.