What Determines Your Homeowners Insurance Premium?

With many millennials getting older, some are considering the jump to home ownership. However,  owning a home isn’t exactly getting cheaper, particularly when you factor in all of the extra costs, including homeowners insurance. The average homeowners insurance premium rose 3.6 percent in 2015, following a 3.3 percent increase in 2014, according to a 2018 study from the National Association of Insurance Commissioners. Considering it’s on a steady rise, it’s safe to say that it’s only going to get higher as the years go on.

But what determines your homeowners insurance premium? It comes down to multiple factors. Maybe you want minimal coverage; maybe you want sufficient and additional coverage for your home. Everyone is different and has separate wants and needs for their home. If you’re looking for extra information, then this blog is for you. Here are some key factors that determine your homeowners insurance premium.

What Controls Your Homeowners Insurance Premium

When it comes down to calculating costs, keep an eye on these general elements:

  • Rebuilding cost of your home. If your house is totally destroyed in some kind of accident, you’re going to have to rebuild it. That takes up a lot of money and it’s going to have a different cost than when you actually bought the home. If some kind of natural disaster happened, then more than likely you’re going to be dealing with some major damage mixed with debris. On top of that, you have to add in labor costs and property accessibility.
  • The materials that make up your home. What your house is made up of truly makes a difference. And if you’ve got an older home, you’re often at a disadvantage. Over the years, the materials used to create homes for people are often changed because of innovation. That’s why when something happens, it’s sometimes an issue to replace it. Costs can go up quickly when you’re searching for materials that are considered hard to find.
  • How old your home is. Older houses use materials that are more degraded or inferior. Since it’s usually an issue to replace them, it’ll often drive up homeowners insurance premium costs. In addition, older homes (particularly those that aren’t as well-maintained) are more likely to file claims, which in turn gives them higher general premium costs.
  • Fire protection in your area. There’s a few things that come into play with your premium and fire protection. How close your home is to a water source and fire department are going to be important factors. And don’t forget about your area’s fire protection rating.
  • Claims history in your area. If your neighborhood is known for getting regularly hit with tornadoes or fire, then you’re going to look at higher premiums.

Other things that are going to affect costs are if you have pets (like big dogs), if you’ve made personal claims before, the coverages that you need, or your history with the insurance company. But when it comes down to comprehensive, worthwhile coverage, Transparity does the most for homeowners insurance programs. If you have any other questions about your homeowners insurance coverage, don’t hesitate to reach out to an agent. We would be happy to answer your questions and help you find the right policy for your needs.


About Transparity Insurance Services

Transparity Insurance Services was founded for the purpose of helping clients to ensure their property and assets with no hassle. We are committed to providing a simple, easy, efficient, and positive experience to all of our clients, and prioritize open and transparent communication with our clients. Through our excellent customer service and technology, we can help you to find the right insurance program at a competitive price. Contact us today at (855) 889-2037 to learn more about what we can do for you.