UPDATED: Mar 13, 2020
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Homeowners Insurance Premiums in Utah
Property values are surprisingly high – about $100k – $150k more expensive than similar states with sparse populations – but you’ll catch a break when it comes to your homeowners insurance premiums. Utah is actually #3 as far as states with the cheapest homeowners insurance premiums. Although the buying process can be a pain, paying your annual premiums won’t cost you an arm and a leg.
The standard home insurance policy that most residents end up buying is known as a “special form” or HO-3 policy. It’s pretty standard across the industry – not just in Utah. It provides coverage for almost every need, including the outer structure of your home, the contents inside, and many other things in between.
|Types of Coverage||Coverage Amount|
|Replacement Cost (Dwelling)||$200,000|
|Replacement Cost (Contents)||$100,000|
We’ll discuss the specific types of coverage mentioned in the chart above later in this guide. Suffice to say that you will need coverage on your home, your personal property, liability coverage for accidents, and medical payments for accidents that aren’t considered your fault. And just like with auto insurance, your deductible is adjustable. Lowering it will raise your annual premium, while raising it will lower your premium.
Why are Utah home insurance rates so low, despite property values being so high? Well, the climate of Utah is fairly calm and stable. Unlike coastal states and many parts of the Midwest, Utah residents have less to worry about when it comes to severe weather. And this infrequency of severe weather leads to fewer claims, which lets insurance companies relax their demands for higher premiums.
Even though premiums are delightfully low in Utah, it doesn’t hurt to shop around. As you can see in the chart below, you may have the chance to save $200-$300 each year on your premium payment. And although that may not sound like much, it will add up over the life of your home.
Laws and Requirements
Unlike certain types of insurance, such as automotive insurance, homeowners insurance isn’t a legal necessity. But the main reason for that is because nobody has to make it a legal mandate. Most of the time, even when people own their home outright, they choose to buy it anyway; after all, who wouldn’t want to protect such an expensive investment? Also, since most people pay for their homes with a mortgage, their bank will most likely make it a requirement.
Taking a Home Inventory
Home inventories are an essential part of the insurance buying process when it comes to this type of coverage. And yes, we are aware of how tedious the process is; but the hardest part about collecting your home inventory information will be the first one you do. From then on, you’ll only have to update it on a yearly basis. And having an accurate inventory can help you choose the right amount of coverage for the most affordable premium.
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Choosing What (and How Much) Coverage
The most obvious perils that Utah residents have to worry about are hurricane-related. But those aren’t the only disasters that can befall your home and/or property:
- Fires – Whenever there is a particularly dry season in Utah, wildfires become a real concern. The dried vegetation basically becomes kindling just waiting for a spark. There are some things you can do to protect your home and decrease the likelihood that your house catches on fire; but even if the worst happens, your homeowners insurance policy will likely cover it.
- Flood Damage – The dry weather that creates hazardous conditions for wildfires also increases the likelihood of flash floods whenever it finally does rain. Unlike wildfires, though, nearly all insurance companies refuse to cover flood damage. If your insurer won’t add an endorsement for flood coverage onto your policy, then you’ll likely have to contact FEMA to see if you can purchase coverage from the National Flood Insurance Program.
- Earthquakes – According to geologists, Utah is long overdue for a major earthquake. Scientists expect serious geological activity between a 5.0 – 7.5 on the Richter scale at some point within the next 50 years. While that might not sound like something worth worrying about, it can cause you some serious financial harm if you aren’t prepared. Some insurance companies will offer riders for earthquake coverage, but you have to explicitly ask for them. Otherwise, you may have to purchase earthquake coverage separately.
- Covering Your Property – One of the brighter spots on the HO-3 form is its personal property coverage (Part C). Most agents recommend purchasing at least 50% of your home’s total worth for coverage assigned to your personal belongings. Also, make sure you understand what the named perils list entials, as well as which perils apply to your part C coverage.
- Liability Coverage – If you know someone well enough to welcome them into your home, you probably assume that they won’t sue you if an accident happens which damages them or their property. But you might be wrong. And if you are, your liability coverage will help pay for damages and court costs associated with the suit.
- Umbrella Coverage – Your homeowners insurance company will only sell you so much coverage. But if your home and/or personal property is worth more than what your insurer will sell you, then you’ll need to look into an umbrella policy. Obviously, the premiums for this type of coverage will be higher than for a standard policy. But at least you know you won’t be left holding the bag if something terrible happens.
Replacement Cost vs. Actual Cash Value
Although these terms seem confusing, they are actually quite simple. Whenever you file a claim, the amount your insurance company will pay out to fix the damaged property starts out at 100% (minus your deductible). If the damaged property is covered at replacement cost, then your insurance company will pay for pretty much all of it. But if it’s covered at actual cash value, then your insurer’s 100% responsibility shrinks based on the depreciation (wear & tear) of the property in question.
How Your Credit Score May Influence Your Rate
You’re going to want to ask your prospective insurer how the evaluate credit before you request a quote. If they tell you that they use CLUE reports or insurance scores, then you’re good to go. Such credit evaluations only require a “soft” credit check, which won’t reduce your credit score (as opposed to a “hard” check). And these snapshots don’t necessarily reflect your entire credit history or all of the dark marks on your credit history, which may put you in a more favorable light with your insurer. This, in turn, could lead to better premiums.
For more information, feel free to click any of the links you see in this article. They all lead to more detailed information about homeowner’s insurance, specifics on purchasing a policy, and how to find the best deal. You should also contact local resources in your state, such as:
Or contact them directly through the following resources:
Utah Insurance Department
3110 State Office Building
Salt Lake City, UT 84114
Phone: (801) 538-3800 | 1-800-439-3805