Homeowners insurance can be baffling to new homeowners. When you receive quotes on potential premiums, you may be surprised by just how expensive they can be. Alternatively, you may well get premiums for far less than you expected. This is because there are a number of aspects impacting the cost that you may not have anticipated. To demystify the cost of your homeowner’s insurance, here are the factors that impact the price of your premium.
Your Hometown’s Climate
A location’s climate is one key contributor to the price of homeowner’s insurance. For example, homeowners insurance premiums tend to be higher in Texas because potential natural disasters could damage properties. Texas averages about 130 tornadoes a year, more than any other state in the U.S. Other common potential disasters in Texas include sinkholes, hurricanes, and wildfires. If you live in a state with few climate disasters, however, you are likely to get lower homeowners insurance premiums.
Your Hometown’s Crime Rate
Crime is one of the biggest causes of homeowners insurance claims. As such, you may face high premiums if you live in an area with a high crime rate, even if you have never been a victim of crime. Improving your home’s security by installing a high-tech security system, for instance, may decrease your premium.
Your Home’s Structure or Materials
Some houses are more susceptible to damage than others. If you live in an area vulnerable to wildfires and your home is made entirely of wood, you are at a much higher risk than you would be with a house made of stone. Of course, the situation is rarely that clear-cut. Nonetheless, by taking measures to secure your home against common natural disasters, you may be able to lower your premium. So, if you have a house with wooden features where wildfires are common, finding ways to prevent wildfires from reaching it can reduce your premium.
The Age of Your Home
Insurance companies consider older homes more of a risk, not just because they have been exposed to more wear and tear over the years, but also because some of the previous building practices were less secure than newer ones. As such, if you buy a home that was built decades ago, you’re likely to get a higher premium than if you buy a home that was recently built.
Your Claims History
Insurance companies consider a number of factors to calculate your premium but claims history is a relatively controversial one. After all, the fact that you have filed a claim for a house fire before is not necessarily indicative of the likelihood you will file a claim for it again in the future. In fact, your past experience may lead you to be more careful than other homeowners. Nonetheless, claims history is something most insurers take into account. You may be buying a new home in a new state, but your previous claims will follow you.
Your Home’s Proximity to a Fire Station
If you live close to a fire station, you may get lower premiums. The more quickly the fire department can get to your home, the less damage a house fire is likely to cause.
Marital Status
One of the strangest factors taken into account by insurers is your marital status. If you are married, you are considered a lower-risk client. This is based on research that indicates that married people file fewer claims. There is no clear reason why married people file fewer claims – it is merely another factor that is considered based on data alone.
