Since insurance companies base their rates on home valuation, wouldn't it make more sense to look at the cost of insurance as a percentage of home valuation or perhaps max. coverage limits as stated in the policy?

You can do whatever adjustments you want but I still fail to see how cost "per capita" turns into a particularly relevant measure since rates are not "per capita". If my in-laws move in, does my cost "per capita" decrease?

> wouldn't it make more sense to look at the cost of insurance as a percentage of home valuation or perhaps max

Maybe. This also introduces other confounders. More fundamentally, those data won’t be as broad nor as granular (particular home-value data, which get notoriously obscured e.g. in jurisdictions with high property tax or transfer rates).