What Factors Affect Home Insurance Costs

Before you jump into buying a home, one thing you should know, at least to some degree, is how much does home insurance cost. There is no one right answer to this question because of the large number of variables used to compute the cost of homeowners insurance. However, take a few moments to read through the information below and you will have a better understanding of what is used to calculate the cost of home insurance and where you can go to get a specific price to cover a specific home.

 

Impacted by the Home Itself

What you are insuring is, of course, critical to the cost of the insurance policy. First, how much would the insurance company have to pay out to replace the home, the contents of the home and other structures on the property? Second, what risk factors come with the home itself? Is it an old home or a new home? What type of structure is the home? Newer homes are considered less of a fire risk in most cases. What is the security of the home like? Are there smoke detectors, deadbolt locks, burglar alarms or a sprinkler system?

 

Affected by the Policy Purchased

The next important consideration is the amount of coverage you purchase. How much liability coverage do you want or need. If you have a pool for instance, you may need additional liability coverage. Do you have expensive items in the home that will require a personal property rider? How much of a deductible are you considering? A $1,000 deductible is common, but you can go up or down and it will affect your rates. And the big one, do you need additional home insurance policies for natural disasters common to your area.

 

Depends Upon Location of Home

Where the home is located is very important because your home is stationary (in most instances) and must withstand the elements of that area. The main considerations with location are the cost of materials and labor to rebuild, crime rate, weather conditions and specific environmental factors. If you live in a flood prone area, you will need to add a flood insurance policy. If you live in an area where earthquakes are common, you will need special earthquake coverage. This will profoundly affect your home insurance rates.

 

You Affect the Cost

The next issue that homeowners insurance companies will consider is you. You, and those living in the home, are risk factors. Your age, occupation, marital status, credit history and whether or not you smoke will all be used to figure your rates. You will also be asked about previous homeowners insurance claims if you have had any.

 

Home Insurance Quotes to Measure Cost

With a little understanding of what affects your rates, you can look with a keener eye toward homes that will be less expensive to insure. Of course, to get an exact amount of what home insurance will cost you, you need to get homeowners insurance quotes. These quotes are now available online from most all home insurance companies. Input the requested information, much of which has already been discussed above, about a specific home and you will have multiple quotes in front of you to not only see how much home insurance will cost, but to find the most affordable option.

 

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