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How homeowner's insurance costs vary wildly

Mudslide victims dealing with insurance issues

Do you need to shop for homeowner's insurance? That depends -- on where you live. If you reside in Missoula, Montana, shopping won't save you much, but homeowner's insurance doesn't cost much there, either. But if you live in Texas or Florida, the cost of homeowner's coverage is substantial, and the variation in premiums is massive.

An analysis by Gavop, a housing research service, found that in high-cost insurance markets, the price of comparable coverage varied by thousands of dollars, though the variations are far more dramatic in some counties than in others.

In Nueces, Texas, for instance, the difference between the highest- and lowest-cost policies amounted to a stunning $5,180 per year. Pricing on a sample policy ranged from an average of $1,478 annually to a whopping $6,658. 

For its study, Gavop pulled state insurance filings that compare rates for a sample insurance policy from company to company. These sample polices are standard in each state, allowing consumers to make apples-to-apples comparisons. However, each of the 50 U.S. states has it's own sample coverage, which is likely to reflect average home values in that state, so the cost of coverage isn't comparable from one state to the next.

The variation was similarly stark in Monroe County, Florida, where the lowest-cost carriers charged $2,211 for a sample policy, while the higher-cost carriers quoted $7,100 for the same coverage. The median cost of coverage in Monroe is $4,011, according to Gavop.

Both Monroe and Nueces are near the Gulf of Mexico, where hurricanes are a consistent risk. Many of the other highest-cost markets were also Gulf states that have been hit hard by summer storms. Here are some other areas where it's particularly important to shop around:

  • Cameron, Louisiana, where the median policy cost is $7,040, but the difference between highest- and lowest-cost carriers amounts to $4,884.
  • Galveston, Texas, where the median policy costs $2,882, but the difference between highest- and lowest-cost carriers amounts to $4,716.
  • Chambers, Texas, where the median policy costs $3,007, but the difference between highest- and lowest-cost policies amounts to $4,711.

On the other end of the spectrum, land-locked Montana delivers nine of the 10 markets where the raw cost of coverage varies the least -- possibly because policies are so cheap. Insuring your home in Missoula, for instance, will set you back roughly $194 annually. And the difference between the highest-cost policy ($277) and the lowest-cost ($180) amounts to less than a month's premium in Nueces. 

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