When you start pricing homeowners insurance, you may be surprised by how much the cost can vary depending on which company you're talking to and what kind of coverage you're getting. Having a basic understanding of what factors affect the cost of homeowners insurance can help you figure out what policy is a good deal for you.
What Your House Is Made Of
A house that's constructed of a nonflammable material like brick is likely to score a cheaper premium than a wooden frame house because it's less susceptible to fire, according to the New Jersey Department of Banking and Insurance.
Your Credit Score
If you have a good credit score, there's a good chance that you'll also get a better deal on your homeowners insurance, according to CNN Money. It's worth checking your credit report for errors and doing what you can to boost your credit if it's low before shopping for homeowners insurance to make sure you're getting the best deal.
How Old Your House Is
A new home may qualify for discounts that an older home doesn't, according to the South Carolina Department of Insurance. Home improvements like replacing heating systems, roofing and wiring systems can lower the price on insurance for older homes.
How Easy Your Home Is to Save From Fire
If your home is close to a fire hydrant and a good fire department, your homeowners insurance will probably cost less than that of someone who lives far from a hydrant and near a less reliable fire station.
Your Total Coverage
The higher your coverage, the more you'll pay each month in premiums for your homeowners insurance. Lowering your coverage can lower your monthly insurance costs, but remember that you'll be responsible for paying any costs that exceed your coverage amount out of your own pocket if you do have an emergency, such as a fire, storm damage or theft.
How Much Your Deductible Is
Your deductible is the amount of money you pay out of pocket before your insurance kicks in to cover the cost. A high deductible means a lower monthly cost but more out-of-pocket expense, while a low deductible requires higher monthly payments but less emergency cash.
If your insurance agent doesn't mention discounts, ask. Smoke alarms, home security systems, multiple policies with the same agency and other factors can all lower your insurance costs, but you won't know unless you ask. CNN Money says consumers may be spending $300 million a year more than they need to on homeowners insurance because they forget to ask about discounts.
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