Homeowners insurance rates are affected by multiple factors, many of which we may not be aware of. It isn’t uncommon, for example, to have very different homeowner’s insurance costs for two very similar homes.
The following factors that may influence the rates of your homeowner’s insurance policy:
- Age of the home - Older homes typically have higher homeowners insurance rates than newer homes, mainly due to the age of the home’s structure and its features, such as the plumbing, the electrical and the roof, for example. An insurer will usually raise the rates for an older home because it is simply assumed that more problems exist with an older home.
- Location of the home - Your home’s address will likely affect your homeowner’s insurance rates. From crime to location near public facilities and fire stations, the equation for determining the cost of your zip code varies greatly from one insurance company to the next.
- Building materials - The materials used to construct your home may change your homeowner’s insurance rates. For example, wood shingles may be more costly to insure than vinyl siding because they catch fire more easily. When constructing or remodeling your home, check with your insurance agent to see which building materials may lower the rates on your homeowner’s insurance policy.
- Home amenities - Some home amenities may lower the cost of your homeowners insurance policy (i.e. security system), while others may raise your rates (i.e. swimming pool, hot tub). Again, it is best to check with your insurance agent regarding amenities and how they affect your homeowner’s insurance rates.
- Animals - Some dog breeds are considered higher risk because they have been associated with aggressive behavior and dog bites. Some of the most common dog breeds to earn this distinction include: Pitt Bulls, Dobermans and Rottweilers.
- Personal possessions - If your home includes antiques and other valuable items, you may be paying more in homeowners insurance. Some of these valuable items may even need to be insured separately, thus raising your rates.
- Liability coverage - Higher liability coverage equals higher premiums. Check with your insurance agent and ask about average liability coverage.
- Deductible -Choose a low deductible and you’ll pay more in homeowners insurance; choose higher deductibles and pay lower rates.
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