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6 Key Factors Which Impact Homeowners Insurance Rates

What Factors Impact Home Insurance Rates? 

To make sure that you are getting the most affordable rates for home insurance, you may need to shop around. Since insurance companies are assessing risks in a variety of ways, you need to know what factors impact your rates. Here are 6 key factors that influence the rates that you pay.

1. Location of Your Home to a Body of Water or a Coastline

The location of your home has a huge impact on the home insurance quotes that you will receive. Based on information from the Insurance Information Institute, home insurance rates are usually much higher than a home that is nearer to an inland.

2. Overall Condition of Your Home’s Roof

When you buy a home that has an old roof, the home insurance rates are generally much more expensive. This is because an old leaky roof normally costs more to repair. Also, unlike a new roofing system, it’s less effective in protecting the home’s structure from the elements.

3. Rates are Affected by the Deductible You Choose

You can lower your rate for home insurance by raising your deductible. Your deductible is the amount that you are expected to pay out of pocket before an insurance company pays on your claim. 

4. Type of Home Heating Systems Installed

The type of heating systems installed in your home has an impact on the home insurance rates that you pay. This is especially true for those of you who have a wood-burning stove installed inside of your home. Typically, based on the insurance company’s policies, your policy quote maybe 2% higher on average.

5. Age of Your Home and Previous Claim History

Your home insurance rates can greatly be affected by the age of your home and the claims that have been filed in the past. In fact, these are 2 big factors used in your quote’s calculation. To calculate these amounts appropriately, insurance companies use a variety of tools to provide you with these rates. 

Sample price increases based on the age of the home:

  •  1% increase – 30-year-old home
  •  2% increase – 35-year-old home
  •  3% increase – 45-year-old home
  •  3% increase – 50-year-old home

5. Marital Status

Marital status plays a significant role in the cost of home insurance quotes. Based on previous statistics, these financial advantages usually go to married couples since the claims filed are a lot lower.

6. Previous Claims in Your Personal History

 Even though you may move into a new home, the claims that you have made with your older home is also factored into the insurance rates that you pay. Therefore, your previous home insurance claim history can either be a financial advantage or disadvantage when you buy a new policy. 

Final Takeaway

There are many different factors that impact home insurance rates today. Therefore, you must understand how an insurance agent is calculating these amounts. This information that you find can make a massive difference in the rates that you pay.

Updated on May 3, 2020

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