Did you know two homes can have identical square footage but vastly different insurance costs? They might even be right next door to each other. How is this possible?
The cost of premiums is based on the risk factors of the homes. With vastly different features, the two properties don’t have the same likelihood of claims. What features influence this risk? Following are a few of the top factors.
Construction: Older homes often cost more to insure due to their construction. Features such as ornate moldings, stained glass windows, and plaster walls are typically more expensive to replace than are modern amenities, so insurance premiums reflect this. Other construction factors include the age of the electrical system and the type of exterior used.
Safety: If a home offers features that reduce the risk of fire, burglary, or other damage, the insurance costs go down. Smoke detectors, sprinkler systems, and security systems are examples of safety features that can reduce your homeowners insurance premiums.
Amenities: Certain features can not only add appeal and ambiance to a home but also increase the cost of insuring the property. A swimming pool or spa, for example, can add fun and relaxation appeal, but it also increases a homeowner’s liability and requires additional coverage. A wood-burning stove can be charming, but it can be seen as a fire risk and increase your premium.
Pets: While a hamster probably won’t affect insurance premiums, a pit bull might. Homeowners insurance includes liability, which protects the property owners if they are sued by a person who is injured by the homeowner’s dog. If you own a dog, especially one whose breed is considered dangerous, you might pay more for insurance.
Upgrades: Remodeling projects typically increase the value of the home. A new addition, a finished basement, or an updated kitchen may require additional insurance to adequately cover the upgraded property.
If you’re considering purchasing a house or altering the features of your current home, consult with your insurance provider. They can provide premium estimates and offer further insight into how your choices would affect your insurance costs.