Most expensive states to insure your home

Costs leveling off
In general, homeowners' insurance costs are leveling off, says Loretta Worters, spokeswoman for the New York-based Insurance Information Institute.

One reason is that people are maintaining their homes better, she says. Mold damage claims haven't been as costly as insurers had predicted.

Bob Hunter, who is now director of insurance for Consumer Federation of America (CFA), points out that for years premiums had increased at around the annual inflation rate. According to CFA, in 2001 homeowners' insurance rates went up by a median 7 percent, and in 2002 by a median 13 percent. Reasons include dropping interest rates and a stock market slump, he says. Both mean it's harder for insurance companies to make money on their investments.

The increases dropped back down last year, to around 4 percent or 5 percent, says Hunter. "This year we're talking back around inflation."

Shop around
But if you live in Texas, Florida or any of the states with the expensive homeowners' premiums, don't start packing your bags for — the state with the least expensive premiums — just yet. Not every resident has to pay at the top rate. Plenty depends on how elaborate a policy you choose, and even where you live within a particular state. In Oregon, costs are similar whether you're in Portland or Coos Bay, Hunter says. In Maryland, State Farm charges nearly twice as much in Montgomery County, which butts against Washington, D.C., as in Frederick County, which is one county north. Other companies have different premium scales in the same area.

"Insurance companies do charge very significantly different prices," Hunter says. "You can easily pay 50 percent more if you go to the wrong company."

That's why it pays to shop around and do some background research. Most states have free insurance-buyers' guides, and the NAIC offers complaint ratios, as well as licensing and financial information for different companies on its Web site. Besides that, you don't necessarily get what you pay for.

"Our research shows that you don't have to pay more to get good service," Hunter says. "Some of the least-expensive companies have the best service."

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