Home buying process
Buying a home can be one of the biggest investments in your entire life.
The one thing that you shouldn’t worry about, is how much does home insurance cost to protect that investment.
It should be, do I have the right coverage to protect it in case something happens.
Since that tends to not be the case, let’s break down what goes into the cost of homeowner’s insurance.
Home insurance costs
Like most insurance policies many factors go into consideration when determining your homeowner’s insurance rates.
These include but are not limited to
- Where is the house located- is it near the coast or in the middle of the woods
- What protection class are you rated- this is determined by the type of fire department responds to your house, how many miles away, and the number of feet you are to a hydrant.
- When was the house built?- Newer houses are less expensive to insure
- How big is your home, 3,000 square feet, or 1,000 square feet?
- What style house is it. Is it a 1 story ranch or 2 story colonial?
These are just a few of the factors that go into consideration when determining the right coverage and calculating the cost.
Homeowner’s insurance policies are written to replacement cost. A house that is 3,000 square feet will need more coverage than a house that is 1,000 square feet. Increased coverage limits will increase the insurance premium.
Why is my insurance more than _____?
Not only will home insurance vary from house to house, but it will also vary from homeowner to homeowner.
You will usually not pay the same as the person who owned the house before you or how much your neighbor pays for a similar built house.
The main reason for this is credit.
Credit-based scoring is a major determining factor when calculating insurance rates, especially for your home and auto insurance policies.
Other factors, like how long you have owned a house or whether you are a first-time buyer and whether you are packaging your auto and home insurance policies together will all make a huge difference.
Ways you can lower your home insurance premium
As we just mentioned credit plays a roll in what your insurance premiums are, so improving your credit will help you in the long run to reduce your insurance premiums.
Here are a few other quicker ways to lower your premium
- Install a central station fire and burglar alarm
- Install a water detection device
- Package your auto and home insurance premiums together
- Stay claim free
It is important to remember that the insurance companies are a for-profit business. The more money they make the less likely your policy will increase.
Putting safety devices and security measures in place will help keep you and your home claim-free.
The bottom line is home insurance costs can vary, based on the specific insurance company you go with and the dozens of factors that go into their rating.
The best thing you can do is use an independent insurance agent who has access to many insurance companies and can shop your rates for you.
Getting actual quotes with the coverage specific for your property and your family will give you the peace of mind that you have the right coverage to cover your house and that investment.
If you want a review of your insurance or to talk to one of our trusted independent insurance agents, click the button below to get started.
for more information on homeowner’s insurance visit our frequently asked questions page: