What Affects the Price of Home Insurance?

Although everyone needs home insurance, the rates for this coverage vary widely. Homeowners should regularly review their coverage in order to make sure that it's accurate. Coverage should always be adequate and cover the cost to do any repairs or even rebuild the home. Insurance also replaces the contents of a home. This may end up with higher premiums especially for homeowners that complete upgrades but also decreases the risk of vulnerability.

However, since costs are not the same for every home, there are some important factors which will affect the cost of home insurance. These basic areas are the primary factors when it comes to home insurance costs.

Home Remodeling

Many people move into a home and remodel it over time. A remodel to the kitchen, bathroom, or other major remodeling projects add value to the home. It's important that the homeowners insurance takes any improvements into account. Since these improvements were likely expensive to build, they're also most expensive to insure as the insurance company would pay to rebuild them in case of a loss. With any improvements made, insurance companies will assess the value of the remodel and price their insurance policies accordingly.

Pools and Trampolines

Both of these items are often enjoyed by homeowners. The backyard pool is fun in the summer months and kids love trampolines but they're also going to contribute to insurance costs. Even homeowners who use these items safely face increased costs of having them. Homes that have both of these items are usually going to have a higher insurance premium. Talk to an insurance agent as putting gates around pools or a net around the trampoline may help to lower the cost.

Age of the Roof and House

Insurance companies know that aging is going to increase the risk of damage. As a roof ages, for example, it's more susceptible to damage from storms and other events. Replacement costs for home repairs also tend to go up over time. An older house may be more costly to insure than a newly built house which likely won't have any major damages for some time.

Home Based Business

Many people have a home office. The person who works from home may need insurance coverage for their office equipment, business vehicle, and any inventory that's stored on site. Standard insurance may provide some insurance for basic computer and office equipment but this may not be enough depending on the type of business. Additionally, homeowners who have customers in their home increase risk. Having a home business typically will add additional costs to the premium.

Home Security Systems

Having a home security system is one of the few features that will actually decrease the cost of insurance. Not only does having this system in place give someone peace of mind, it also demonstrates to insurance companies that the house is protected from theft. Companies typically offer a discount for systems that are monitored so talk to an agent about this to lower the cost.

All of these factors can add or decrease the cost of a policy. For anyone who may want to lower their premiums, these are some factors to consider.