When an insurance company calculates the premium for your homeowner’s insurance policy, everything boils down to risk – the likelihood that the insurer will have to pay out on your policy at some point. Higher risks typically result in higher premiums, and there are a number of factors an insurance company will consider. The age and location of your house, for example, can influence what you'll end up paying in premiums. Another major factor is the materials a house is made of.
Durability Against Hazards
The three little pigs learned the hard way that straw and stick houses aren't as durable as those made of brick or stone. Although the home you buy isn't likely to be threatened by an evil lupine windbag, there are plenty of other hazards to be concerned about. Fire and high winds – and the debris they can propel – are less of a threat with brick houses than they are with wood houses.
Wood frame construction doesn't do as well against these sorts of hazards, and it is especially susceptible to fire and damage from pests like termites. Because of these factors, houses with brick or masonry construction are often less expensive to insure than wood-framed houses.
Exception for Earthquake-Prone Areas
While it’s true that – all else being equal – brick-built homes are often cheaper to insure, there are a few situations in which their advantages can become liabilities. In areas where earthquakes pose a threat, for example, the rigidity of brick construction can make it more susceptible to damage than a wood frame house. Because of this, if you’re considering buying a brick-built house near a fault line, expect to see that increased risk reflected in your premiums.
Other Insurance Factors
While construction materials can influence insurance costs, they are only one of several factors that insurance companies have to consider. Some of these other factors – including a house’s age and location, local crime rates and the home's proximity to a fire department – can also impact insurance rates and potentially trump any benefits from a particular construction material. If a house is in a coastal region where hurricanes or landslides are common, for example, its location may outweigh any savings from construction materials.
Risks and Prior Claims
One factor your insurance company will consider that might not be readily apparent to you is the house's claim history. If there has been a history of payouts on the house, you can expect a higher premium. If you're seriously considering a particular house, it's a good idea to commission a professional inspection. The inspector can identify risks that are likely to raise a red flag with your insurance company before you inherit them.