Homeowners Insurance in Kentucky

Kentucky is home to the Kentucky Derby, one of the country's most prestigious horse races, and a hotbed of tumultuous weather, such as tornadoes, landslides, earthquakes, and hurricanes. Located in the Southeastern part of the country, Kentucky is no stranger to disasters. Since 1953, Kentucky has experienced 74 federally declared natural disasters, and the rate of disasters per 1 million residents is 16.3.

Weather is not the only reason Kentucky natives file homeowners insurance claims. They must also contend with water damage from broken pipes, snow and ice damage, other types of property damage, bodily injury (liability insurance and medical payments), and theft. The most common home insurance claim is hail damage.

No U.S. state requires homeowners to carry insurance, but experts suggest anyone owning property should purchase some coverage. However, if you borrow money to buy the property in Kentucky, your mortgagee will require that you purchase home insurance and keep it active until the loan is paid off. They will also dictate the levels of coverage you need.

The average rate for homeowners insurance in Kentucky is $3,033/year, a bit more than the national average of $2,511/year or $209/month. Kentucky is prone to nasty weather year-round, so homeowners need coverage.

Kentucky has a variety of raw weather events that can cause devastating property damage, and certain insurance providers operate within the state, offering different coverages. The types of coverage provided in Kentucky include:

You might also consider flood insurance or an umbrella policy to cover anything your primary policy does not.

FEMA (Federal Emergency Management Agency) manages the National Flood Insurance Program (NFIP) through a network of 50 providers across the U.S.

Since most homeowners insurance does not cover floods, this supplemental coverage can repair damage and replace items after a flood. Depending on the options you choose, it can cover the building and/or your personal belongings. This program is available to homeowners, renters, and businesses. Learn more about the program on FEMA's website.

Severe weather has become the norm across the United States. More than anything else, climate change impacts the homeowners insurance industry significantly. The more disasters, the more claims, and eventually, insurers incur losses, which can lead to them pulling out of certain areas or limiting coverage.

Overall, home insurance rates have spiked 34% in the past five years, and in some places, even as high as 60%. Almost half of U.S. homes will face a qualifying event, and most of them are underinsured. In Kentucky, rates have risen by 18.5% from 2018 to 2023. Wildfires and storms are some of the most damaging culprits, and the cost per wildfire incident is $77,340.

In 2023, 41 tornadoes devasted property in Kentucky. In 2022, the state experienced 1,280 wildfires, destroying 59,199 acres of property. From 1980 to 2024, Kentucky had 89 billion-dollar disasters, making it a very high-risk state for insurers. Average homeowner insurance losses in Kentucky from 2015 to 2019 totaled $577,635,400.

Home insurance can be expensive, but since certain things factor in, you can sometimes make changes to save on homeowners insurance. The most common things that affect your home insurance premiums are:

Some ways to save on your Kentucky home insurance premiums include:

• Reinforce Your Home: Kentucky experiences many tornadoes and hurricanes, and wind can destroy a home. Fortify your home with hurricane shutters, shatterproof windows, a stronger roof, storm ties, and straps, and you could save on your insurance.
• Bundle Policies: If you bundle multiple policies with the same vendor, they should cut you a deal.
• Beef Up Security: Install a professional security system, fire extinguishers, and sprinklers to make your home safer, and your insurer may give you a break on your rates.
• Raise Your Deductible: Increase your deductible to save money on your premiums.

Shop around for quotes and pick the best carrier in your area. Stay with them for loyalty discounts and try to stay claims-free for as long as possible.

Some common things covered by homeowners insurance are fire, smoke, lightning damage, explosions, falling tree damage, vandalism, theft, windstorms, hail, and ice or snow. Home insurance protects you against these types of damage by paying to repair or rebuild your home after a qualifying event. Most policies also cover personal belongings, detached structures, liability and medical payments, and ALE insurance.

You can get a home insurance policy easily in a few different ways. First, you can call the company's 800 number or apply online through their website. You can also contact a local insurance agent and have them help you pick coverages and sign up. Once you decide, you must pay the first year in advance, and then you can pay annually or through your mortgage escrow payments monthly.

The most common discounts offered by home insurance companies include:

• Early Quote Discount: Some carriers offer discounts if you get a quote long before you need it.
• Claims-Free Discount: Stay claims-free for as long as possible and earn discounts for your safe living.
• Loyalty Discount: If you have been with the same provider for years, they sometimes offer periodic discounts for loyalty.
• Bundling Discount: Bundle multiple policies with the same provider, and they usually give you money off.
• Safety Discounts: Install security or safety features and tell your provider they may cut your rates.

Some other available discounts are for vets, military personnel, teachers, firefighters, and new home buyers.

Common Rates Offer by Homeowners Insurance Firms

New homes cost less to insure because they are easier to rebuild and are constructed of better, more resilient, code-compliant materials. New home buyers can sometimes save up to 40% on home insurance. In Kentucky, new construction homeowners pay an average of $2,614/year. However, your actual price will depend on the area, credit score, claims history, and other factors.

Top 10 Home Insurance Firms in Kentucky and Average New Home Savings

Home upgrades and renovations transform your living space into something uniquely yours but can also positively and negatively impact your home insurance rates. Some renovations increase risk and your rates, while others decrease risk, making the house safer and lowering your rates. Some cancel each other out by increasing the value but also reducing risk.

Home Renovations that Increase Rates

Some home renovations that increase your rates include:

• Installing a Pool: Putting a pool may delight your family, but it will also increase your premiums. Pools, hot tubs, and trampolines are "attractive nuisances" that increase risk and rates.
• Remodeling Your Kitchen: Remodeling your kitchen will increase the value of your home and your insurance rates, especially if you install luxury fixtures and appliances.
• Adding a Home Office: There's nothing quite like working from home, but adding a dedicated space will increase your insurance costs. The office may not be covered under your regular policy, and you may need to add additional coverage to protect it.

Home Renovations that Decrease Rates

Some home renovations that decrease your rates include:

• Reinforce Roof/Windows/Siding: Reinforcing your roof, windows, and other structural elements makes your home a fortress that can withstand violent weather, and it can also lower your insurance premiums.
• Replace Plumbing/Electrical: Old wiring is a fire hazard, and defunct plumbing could cause water leaks and damage. Replacing these systems could lower your insurance expenses considerably.
• Install Sump Pump: Installing a sump pump, battery backup, and water alarms could protect your home from water damage and lower your insurance rates.

Installing new siding could lower your rates unless it is made of luxury materials, which could be costly.

Home insurance does not pay for any routine or voluntary upgrades or renovations. It only pays for damage or destruction due to a disaster. However, during renovations, you can purchase add-on policies to cover the work and any damage that contractors might cause.

Always discuss any renovations with your insurance agent before starting work. Find out how it will affect your premiums and if you require additional coverage to protect the newer furnishings.

Renters insurance is a unique policy for people who rent rather than own their homes. Unlike homeowners insurance, it does not include any dwelling coverage. The property owner must have their own insurance to cover replacing or repairing the dwelling after a covered peril. The main purpose of renters insurance is to protect the renter's personal belongings. Policies typically also include liability, medical payments coverage, and loss of use. These policies have limits; only those listed and covered will be replaced. Some policies use replacement value, and others use actual cash value. Actual cash value factors in depreciation and may not pay enough to replace the item.

A few factors impact renters insurance rates; they are as follows:

Kentucky renters pay an average of $10 per month or $125 per year, which is about $34 less than the national average of $159/year.

Condo insurance is similar to homeowners insurance but with a slight difference. Unlike home insurance, condo insurance's dwelling coverage only protects the home's interior. Condo developments have master policies that cover the structure of the building and will rebuild or repair the dwelling back to its original condition (when it was first built). However, most condo owners have upgraded things like flooring, appliances, baths, and kitchens.

Condo owners need condo insurance to restore those things back to their most current condition. Condo insurance also includes personal property, liability protection, medical payments, loss of use, and loss assessment coverage.

The difference between condo insurance and renters is that renters insurance has no dwelling coverage, and condo insurance does, but it's limited to "walls-in". Plus, the liability coverage with condo insurance only applies if someone gets hurt inside the condo. A condo policy protects against covered perils like fire, smoke, vandalism, theft, and windstorms. Some of the items it will replace include:

• Furniture
• Appliances
• Clothing
• Interior Walls
• Wiring
• Plumbing
• Personal Belongings
• Light Fixtures
• Flooring
• Countertops
• Cabinets

The average cost of condo insurance in Kentucky is $491 per year or $41 a month, which is affordable. However, condo owners still want to save money. Some tips for saving on condo insurance are:

• Increase Your Deductible
• Bundle Your Policies
• Make Security/Safety Upgrades
• Shop Around
• Stay Claims Free
• Ask for Discounts
• Opt-in for Auto Payments and Paperless Statements
• Improve Your Credit Score

Kentucky is seen as a high-risk state due to the numerous storms. Just last year, the state saw seven major storms that caused immense damage. Home insurance providers in Kentucky experienced more massive losses than any other state except for Hawaii. If this trend continues, insurers will leave the state, making it difficult for residents to find coverage and narrowing the competition.

Kentucky experiences many tornadoes, hurricanes, wildfires, earthquakes, and winter storms, which cause large claims and losses. These weather patterns paint a grim picture of what the future holds for the state's home insurance market.

Since no federal agency regulates insurance providers, it is left up to the states. Each state has its own agency in charge of monitoring providers and rates, investigating complaints, and sanctioning guilty firms. That agency in Kentucky is the Kentucky Department of Insurance, located at 215 West Main Street, Frankfort, KY 40601.