Five Factors Influencing Home Insurance Rates

Taking the mystery out of homeowners’ insurance can start with understanding the factors that impact home insurance rates. If you’ve ever wondered why your cousin Bob pays less for home insurance than you do, it could have to do with one or more of these five factors.

Property Location

A major factor affecting home insurance rates is the location of the home. Not just the neighborhood, but the terrain and risks of natural disasters. Rates may also be impacted by the proximity of the nearest fire department and even fire hydrants.

Price, Value, Replacement Costs

The cost of your home and what it would cost to replace it in a total loss plays a large role in the rates one pays. This value can be impacted by square footage, building materials, features, and amenities as well as where it is located.

Coverage Limits

Generally speaking, the higher your coverage limits, the more home insurance will cost. This includes structures, contents, and liability coverage. An independent insurance agent can help you determine what a reasonable amount of coverage for your situation is.

Deductible

Your home insurance deductible amount is the amount of money you pay out of pocket for a covered loss before your insurance policy proceeds kick in. The larger the deductible, the lower the premiums may be.

Age and Condition

As construction techniques and building codes have improved, so has the general safety of homes. This is why it can be cheaper to insure a new home than a vintage one. Older homes can have older plumbing, out-of-date wiring, and roofs that may soon need replacement. Some properties may be uninsurable unless some basic improvements are made.

While insurance companies use similar factors in determining rates, the weight they place on each factor can be different. This is why it is important to compare when shopping for home insurance. Our independent insurance agents can assist you. They can reach out to a number of companies to find the coverage and premium you are comfortable with. Contact us today to get started.