Jane Dotson
While homeowners insurance is not a legal requirement in Idaho, it is still highly recommended. Natural disasters such as severe winter storms, heavy snow, rain, and hail can cause significant damage to homes in the state. Homeowners insurance can provide financial protection in the event of weather-related damage, theft, fire, or other covered losses. Additionally, most lenders and mortgage companies require homeowners to obtain insurance as part of their lending agreement. When considering homeowners insurance in Idaho, it is important to shop around for the most comprehensive coverage at the best price, as rates can vary between providers.
| Characteristics | Values |
|---|---|
| Legally required | No, but mortgage lenders will likely require it |
| Average premium | $810 per year (2020 figure), $90.94 per month or $1,091.24 annually (2024 figure) |
| Cheapest insurer | Nationwide |
| Top-rated insurers | Amica, State Farm |
| Risks | Winter storms, flooding |
| Coverage types | Dwelling, other structures, personal property, personal liability, additional living expenses |
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What You'll Learn
Home insurance isn't legally required in Idaho
Home insurance is not legally required in Idaho. However, there are circumstances where you may be obligated to carry it. For example, if you have a mortgage, your lender will likely require you to obtain a certain level of home insurance as part of their lending agreement. This is to ensure that their investment is protected in the event of damage or destruction of the property.
Idaho homeowners face risks from severe winter storms, with heavy snow, rain, and hail that can down trees, cause power outages, and damage homes. Home insurance can provide peace of mind by covering the costs of repairing or rebuilding your home in the event of a covered loss. It can also protect your personal belongings, such as furniture, clothing, and electronics, and provide liability coverage if someone is injured on your property.
When shopping for home insurance in Idaho, it's important to consider the specific risks in your area. For example, flooding is a common risk in parts of Idaho, but it is not typically covered under standard homeowners insurance policies. If you're concerned about flooding, you may want to consider purchasing a separate flood insurance policy or adding flood coverage to your existing policy.
Another factor to consider when choosing a home insurance policy in Idaho is the age of your home. Older homes may be considered higher risk and may have higher insurance premiums. Additionally, if your home has unique features such as a swimming pool, your premiums may also be higher.
It's worth noting that Idaho does not have a Fair Access to Insurance Requirements (FAIR) Plan, which is an option available in most states for homeowners who cannot obtain private home insurance. This means that some high-risk homes in Idaho may be uninsurable through traditional means. However, there are still a variety of coverage options available to suit your needs and budget, and shopping around is essential to finding the best price and coverage for your situation.
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Mortgage lenders may require insurance for home loans
When taking out a mortgage loan, lenders usually require homeowners insurance as a prerequisite. This is because the lender has a financial stake in your home and wants to protect their investment. Homeowners insurance provides financial protection for both you and the lender in the event of damage to or destruction of the property. It covers the costs of repair or replacement due to fire, storms, theft, and other unforeseen events.
The amount of insurance required by lenders typically equals at least the mortgage loan amount or the replacement cost of the house, whichever is higher. This ensures that the cost of rebuilding the house in the event of a total loss is sufficiently covered. Some lenders only require enough coverage to pay off the outstanding loan amount. It is important to note that homeowners insurance does not cover all risks, and additional coverage may be necessary for floods and earthquakes, depending on the location of the property.
Mortgage lenders may also require borrowers to purchase mortgage insurance, also known as private mortgage insurance (PMI). This type of insurance benefits only the lender and protects them in case the homeowner ceases mortgage payments. It is typically required when the down payment is less than 20% of the home's purchase price or on Federal Housing Administration (FHA) and U.S. Department of Agriculture (USDA) loans. PMI costs between 0.5% and 1% of the loan amount and is included in the borrower's monthly payments.
Homeowners insurance requirements set by mortgage lenders depend on several factors, including the down payment amount, the loan amount, and the location of the property. It is important for homeowners to keep their insurance policies up to date and adjust their coverage as necessary, especially after making significant improvements to the home. While homeowners insurance is not legally required once the mortgage is paid off, it is highly recommended to maintain coverage to protect against potential financial losses.
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Types of coverage: dwelling, other structures, personal property
In Idaho, homeowners insurance is not mandatory, but it is highly recommended to protect your home and belongings. Severe winter storms can cause significant damage to homes, and Idaho does not have a Fair Access to Insurance Requirements (FAIR) Plan, which means high-risk homes may struggle to obtain insurance.
Now, let's delve into the types of coverage available:
Dwelling Coverage (Coverage A)
Dwelling coverage protects the structure of your home, including the roof, walls, and any attached structures like a porch or attached garage. It covers the costs of repairing or rebuilding your home if it is damaged by a covered peril, such as a fire or storm. The coverage limit is typically based on the average home value in your state.
Other Structures Coverage (Coverage B)
Other structures coverage protects structures on your property that are separate from your dwelling. This includes detached garages, sheds, fences, gazebos, and even items like swimming pools or playground equipment. The coverage limit is usually set at a percentage (commonly 10%) of your dwelling coverage limit. For example, if your home is insured for $250,000, you would typically have $25,000 in other structures coverage.
Personal Property Coverage (Coverage C)
Personal property coverage protects your personal belongings, including furniture, clothing, electronics, and valuables. It covers your possessions both at home and away, such as when you are on vacation. Personal property coverage is often provided on a named peril basis, meaning only the causes of loss listed in the policy are covered. Certain high-value items may require additional protection.
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Average premiums: $810 to $1,520 per year
While Idaho does not legally require homeowners to have insurance, lenders and mortgage companies usually stipulate that you must have it as part of their lending agreement. Therefore, it is essential to shop around for homeowners insurance to ensure you secure the most comprehensive coverage at the best price.
The average premiums for homeowners insurance in Idaho vary based on several factors, including the home's value, the amount of liability coverage, and the deductible. For example, the average annual premium for a home with $400,000 in dwelling coverage and $100,000 in liability coverage may differ from a home with $500,000 in dwelling coverage and the same liability coverage.
According to US News, Nationwide is Idaho's cheapest home insurer, with an average annual premium of $1,520.61. On the other hand, Progressive reported an average annual price of $1,091.24 in 2024, which is a significant difference.
It's important to note that your cost for homeowners insurance in Idaho will depend on various factors, including your claims history, the home's age and unique features, and the type of coverage you choose. Additionally, you may want to consider adding extra protection by purchasing coverage for floods, sump pumps, or umbrella policies, which will increase your overall insurance cost.
When shopping for homeowners insurance in Idaho, it's recommended to get quotes from multiple companies and compare their coverage options, discounts, and customer satisfaction ratings to find the best policy for your needs.
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Discounts for multiple policies, new homes, security features
When it comes to home insurance in Idaho, there are a few ways to save money on your policy. Firstly, most companies offer discounts for multiple policies. While bundling home and auto insurance is the most common, you can also combine life, pet, business, and other types of coverage, depending on the insurance company. Amica, for instance, offers a bundling discount of up to 30%, as well as discounts for loyalty, autopay, electronic billing, alarm systems, remodels, and more.
Secondly, new homes may also qualify for a discount. Some insurers may offer reduced rates for newly constructed homes. However, it's important to note that State Farm, Idaho's most expensive insurer, does not offer discounts for new homes.
Lastly, security features can also help lower your insurance premiums. Insurers appreciate when you have home security, but to earn a significant discount, you need to go beyond deadbolts and smoke alarms. Security systems with professional monitoring, fire sprinklers, and reinforced glass may help you save extra. Additionally, Nationwide mentions that installing a protective device may qualify you for a discount, which can be updated during their On Your Side® Review.
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Frequently asked questions
No, homeowners insurance is not required by law in Idaho. However, if you have a mortgage, your lender will likely require you to obtain a certain level of insurance coverage.
Home insurance policies in Idaho typically include dwelling coverage, which covers the cost of repairing or rebuilding your home if it is damaged. This includes the home's structure and attached structures like a porch. Policies also include coverage for other structures like a detached garage or tool shed, and personal property coverage for your belongings.
Flooding is not usually covered under a homeowners policy in Idaho, but you can purchase separate flood insurance through the National Flood Insurance Program (NFIP). Sewage backup or sump pump overflows are also not typically covered, but you can add this as an optional extra.
