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Key Factors that Impact Home Insurance Cost and Rates
Purchasing home insurance is an integral step when buying a new home. In fact, it’s often required by a mortgage lender as a condition of your loan. To keep your new investment protected, it helps to be aware of the different factors that can influence your home insurance costs. Luckily, working with us can keep those costs affordable, as we save customers an average of $693 per year on auto and home insurance. See what working with SelectQuote could save you.
Five Reasons Why Home Insurance Rates Differ
Where You Live
Did you know that the city and state in which you live can play a role in your home insurance rates? For example, a person living at a high altitude may have different coverage requirements than someone who lives at sea level. Your home insurance rates can be determined by how common certain claims are made by similar homes in your area or region. Insurance carriers will even consider population, crime rates, weather patterns, and your proximity to public services such as fire or police departments.
Your Home
The materials used to build your home can make a difference in what you pay for home insurance. For example, a brick house might cost less to insure because it has a lower risk of fire damage. The age and quality of a home’s structure may also impact your home insurance rates—if your home doesn’t have updated safety features, you could be assigned higher premiums.
Your Credit Score
While you can’t be denied home insurance because of bad credit, you could potentially qualify for discounts based on your credit score. Individuals with a credit score of 700 and above are typically deemed a “good credit risk,” meaning you’ve demonstrated the ability to pay bills on time, are likely to repay borrowed money in a timely manner, and are less likely to need to file a claim. All of this will help the carrier view you as less risky to insure and therefore grant you favorable rates.
Your Previous Claims
Think of claims like dings in a car door. The first one is not very noticeable, but the more dings you accumulate, the more concerned others might get about your driving ability. It’s always a good idea to rely on insurance for larger, more serious claims and take care of the smaller issues to the best of your ability out-of-pocket. Keep in mind that prior claims may “follow” you to a new home or even another state.
Your Deductible Amount
Your deductible is the amount you pay before your insurance coverage kicks in. Insurance companies typically consider those who are willing to pay a higher deductible to be less risky to insure. Paying a higher deductible can also help to reduce the cost of your premiums. If you do choose a higher deductible, consider creating an emergency fund so you’re financially prepared when you need to pay it.
Shopping for Home Insurance
While an online price comparison tool can be helpful, they don’t often take all the details into account to get you the most accurate quotes. In just minutes, SelectQuote can use proprietary technology to search many policies ate once, helping you find the right home insurance for your needs and budget and saving you the guesswork of sorting out all the fine print.
Types of Home Coverage
Part of purchasing homeowners insurance is understanding the different types of coverage included in your policy. This will help you know what’s protected and what isn’t and can make it easier to file a claim when the time comes. Within a homeowners insurance policy, the following categories can help ensure your home and assets are adequately protected.
- Dwelling coverage
- Personal property coverage
- Liability coverage
- Coverage for other structures
- Deductibles
- Policy Sub-limits
Compare Rates and Save Money on Home Insurance
Finding the right homeowners insurance at a price that suits your budget is easier than ever with SelectQuote. We can streamline the shopping process, comparing rates of many of our most trusted insurance carriers in just minutes.
Common Insurance Rate Questions
Q: What level of liability protection do I need?
A: The level of liability protection you need will be different from person to person. Let us help you determine what coverage will be best for you and your home.
Q: Which losses aren’t covered by my homeowner’s policy?
A: The answer depends on many factors, but we can go through specific examples of losses not covered by a standard homeowners policy and help you determine the best coverage for you. Get started on your free quote today.
Q: How can I save on my monthly premium?
A: Home insurance rates and associated monthly premiums are unique to each policyholder. Examples of opportunities for discounts include having no claims, using an alarm system, completing your annual payment in full, increasing your deductible, and bundling your home insurance and auto insurance policies. Learn more about your opportunity for insurance discounts.
Q: How do I find the cheapest home insurance?
A: To find the most affordable home insurance available to you at the best price, you simply have to shop around. Comparing coverage and rates from multiple carriers can be time-consuming and, oftentimes, confusing, but SelectQuote can do it for you. We can compare coverage and rates from some of the most trusted insurance companies in just minutes.
