What Impacts the Cost of Your Homeowners Insurance?
You know just the right temperature to set your thermostat at to keep your electric bill at a sensible price, but are you paying attention to what impacts the cost of your homeowners insurance? Knowing how your premium is influenced by housing amenities is important — you’ll likely find that certain lifestyle choices are worth paying a little extra for, and that the cheapest home insurance isn’t always the best route.
Check out how these home aspects can help you better understand what your homeowners insurance rates are based on and exactly what you’re paying for.
Age of Your Home and How It Was Built
New homes typically have the latest in safety features: wind protection, resilient materials, modern roofing and more. Insurers offer discount premiums for newer constructions based on this. Older homes might have construction materials that can’t be “built the way they used to” without exceeding reasonable costs. While older homes have added character, knowing what your home is made of before you purchase will help keep your premiums free of surprises.
Home Renovations and Remodeling
Another thing that can affect homeowners insurance rates is remodeling your home. Depending on the updates you make to your interior or exterior — especially if they make your home more energy efficient — you’ll want to consult your agent to learn more about additional coverages or available discounts that could impact your homeowners insurance rates.
How can the location of a home affect insurance costs? A home’s location can affect your premium price, since there are different ratings depending on the territory your house falls into. Two similar houses near each other could have different premiums if they fall in different rating territories. Orientation of the property and distance from fire protection services can also be factors, as can being located on a hillside or having older trees. Before buying a new home, you may want to speak with your agent to determine which territory it falls into.
Pools, Tree Houses, Hot Tubs and More
The fun things you’ve always wanted usually come with a higher insurance price tag. For example, a home with a pool may improve your status among neighbors, but it also increases the risk of injuries and accidents happening on your property. You’ll also want to inform your agent before you begin making any big changes to your home — if your policy doesn’t already cover what you’re adding, like a backyard shed, you’ll want to connect with them to get that coverage added to your homeowners insurance.
Décor Add-ons Can Add Up
Features like stand-alone wood-burning fireplaces, spiral staircases and glass-roofed sunrooms can raise your rates due to added risk. While these things may add value to your home, you’ll want to consult your agent before adding them to make sure you have the right coverage in place.
Working From Home Has Costs
The more people that come to your property, the more liability claims that could occur. Plus, any added business equipment needs to be insured as well. Knowing how home businesses can affect policies is good information to have before you start your entrepreneurial adventure. Your agent may also help you protect against any additional needed liability risks via one of our umbrella policies.
Luxe Items Require Extra Care
Expensive art, jewelry, and collectibles add to your homeowners insurance needs for obvious replacement cost reasons. In some cases, separate insurance may be more cost-effective and comprehensive, so talking to your agent about the best options could save you in the long run.
How to Lower Insurance Costs
There are a few steps you can take as a homeowner to reduce your insurance premium amounts. Things like increasing your deductible, getting married or bundling your insurance can help you save money on your premiums.
Getting Married May Mean Lower Premiums
Being married is often a factor that can impact the cost of homeowners insurance. With home insurance, you might get a lower rate altogether or an overall discount on premiums. And being married can affect other types of insurance rates, including car and health insurance.
Increase Your Deductible
Understanding how your deductible can affect your homeowners insurance is a great way to lower your premium. You may lower your monthly premium by choosing a higher deductible, but keep in mind, you’ll be paying more out of pocket if you have to file a claim.
Bundle Your Insurance
At American Family, we’re dedicated to protecting your dreams. That’s why we offer you a discount for bundling insurance policies, like home and auto insurance.
Related Topics: Home Insurance