Home Insurance Rates

Home insurance is not cookie cutter coverage that evaluates every house the same.  Instead, there are a number of factors that affect your rate.  The good news is that current homeowners can make improvements right now to lower their premium.  And those looking to buy can better understand why houses are rated differently to make an informed buying decision. 

For insurance evaluation, two factors remain constant for every home.  These are important aspects to consider when purchasing a new home: 

1.  Location:  This includes the town and the specific neighborhood.  Crime rates, natural disasters that may threaten the area, and proximity to a fire station or fire hydrant all affect insurance premiums.  In addition, the cost per square foot to build will vary from one area to the next. 

2.  Construction:  The building materials used in the home affects the safety (like the resistance to fire or wind) and the cost to rebuild.  As an example, brick is more fireproof than wood, but also more expensive to replace.  Other materials, including flooring and counter tops, will also be taken into consideration in this category. 

To lower your premium, homeowners can make changes in a variety of ways.  These areas can be updated or upgraded to lower premiums:

1.  Maintenance: How well the home is maintained is important.  Homes that have seen more neglect can suffer from large, potentially hazardous problems.  For instance, inspect your heating system regularly to keep it in tip-top shape and find issues before they become problems. 

2.  Upgrades:  Remodeling not only improves your home’s value, it also can increase the safety and integrity of the structure.  Applicable upgrades include the roof, electrical system, and heating system.  Also consider ways to strengthen your home against natural disasters pertinent to your area.

3.  Safety:  Making your home safer is good for both your home and your premium, and many changes are inexpensive.  Updating smoke alarms and carbon monoxide sensors, installing gates around the pool, and getting rid of the large trampoline are some ways to increase safety.

4.  Security:  How easy is it to break into your home?  Types of door locks, security systems, and exterior doors have an impact on home insurance.   

Some categories let the homeowner select the coverage and options they desire, resulting in changes in their premium:  

1.  Deductible:  This is the number one way that a homeowner can reduce their home insurance.  Increasing a low deductible to $500 or $1000 can save you as much as 25% on your premiums.

2. Discounts: Many insurance companies offer discounts for payment options, retired homeowners, or for combining auto and home insurance policies.  They also may reduce premiums over time as a reward for customer loyalty. 

3.  Personal possessions:  How much of your personal property is covered by your homeowner’s insurance?  Review this at least once a year to keep your policy updated.  Make sure you have enough coverage but aren’t keeping unnecessary riders.