Geography

• Your location makes a huge difference in your rates. People who live in areas with high losses generally pay more premiums per thousand dollars of coverage. If you live in a high crime rate or far away from a fire hydrant or fire department, your premium increases. Different parts of the country also pay more. In 2005, the average monthly cost for homeowner's insurance was as high as $111 in Texas and as low as $42 in Delaware, with the national average running about $65 a month, according to the U.S. Census Bureau.
  
  

Size

• The size of your house makes a difference. Companies sell homeowner's insurance based on the amount of money it takes to rebuild your house. Older homes in poor neighborhoods often require an HO8 policy because the cost of replacing the home far exceeds the value of the house. The HO8, an older home policy, doesn't penalize you for not insuring to replacement cost, but uses market value instead. This keeps premiums lower and more reasonable. Agents may use a dwelling policy for the same reason, but it doesn't have as broad of coverage as the HO8.
  
  

History

• The age of the house and the number of upgrades makes a difference. If you have a new home or you've recently had your roof replaced, wiring upgraded, plumbing replaced and keep the house in tiptop shape, you may be eligible for a preferred risk homeowner's policy. These cost less. The number of claims you've had in the past also makes a difference in your costs.
  
  

Coverage

• The amount of coverage on your house also determines the price of insurance. The higher the coverage, the more the policy costs. A house insured for $200,000 costs more than an $150,000 home. There are exceptions. Often there's a minimum amount of insurance. If your home value is less than the minimum, for example, $50,000, the policy costs more per thousand. This includes the liability section also. Higher limits of liability cost more.
  
  

Considerations

• Business use and special riders increase your coverage costs. A day care in your house, for example, requires a special rider to cover your increased liability. Family pets, like a pit bull may cost you additional sums. A swimming pool increases your liability risk and your premium. Additional riders to cover expensive items also cost additional money.
  
  A burglar alarm, smoke alarm or multiple policies give you discounts on your insurance policy. These lower the price often as much as 20 percent and need consideration when looking toward an average price.
  
  

Expert Insight

• Compare quotes for your homeowner's insurance before you purchase a policy. You can call several companies or seek quotes online. Don't simply take an agent's word or a television commercial at face value, shop for the best price.