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 the cost of your homeowners insurance, so you know exactly what you’re paying for.
Age of the 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.
Location. 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, older trees and the likelihood of wildfire. 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, too. 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.
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. Being careful about getting just what you want will help you avoid getting more than you bargained for.
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 quit your day job. 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, collectibles, etc. 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.
Increase your deductible. 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