What affects the costs of homeowners insurance?

Thursday, June 4th, 2009

What affects the costs of homeowners insurance?

Homeowners insurance costs

Homeowners insurance is a critical piece of a homeowner’s financial planning, and affordable options are available. So, what affects the costs of insuring a home?

One of the most important factors in the cost of homeowners insurance is the size of the home. This is followed closely by area the home is located in, the risks it is prone to – such as severe weather, earthquakes, or crime; and local building costs.

The overall economy also impacts the price an insurer can get for a product – if the economy is doing well, insurance policies are likely to be more expensive, because homeowners can afford it.

Homeowners can control some costs, though. A higher deductible can result in a lower monthly premium, but it’s important to find the balance between a reasonable deductible and a reasonable monthly premium.

Purchasing homeowners insurance as part of a bundle of other insurance coverage is another way to reduce costs. Loss prevention activities – such as installing smoke detectors or fire resistant roofing material – may reduce the risk of certain types of losses and home insurance providers reward homeowners for this with lower costs.

Finding the right insurance coverage at the right cost is a complex matter. It takes a bit of research to understand the general risks and costs. Working with an insurance professional is the best step to take to ensure that a homeowner purchases the correct type and amount of insurance, at the best cost.




Comment on this FAQ










Late winter water problems bring home insurance into spotlight

Insurance News

Late winter water problems bring home insurance into spotlight

The late winter months often bring with them the threat of water damage to homes from multiple angles, so being aware of what is covered by home insurance and what isn't can be critical to the financial well-being of home owners. Read more



Insurance Tips

Factor in longevity credits

Shopping around for a better insurance premium may save you money, but at some point it may hurt you to jump from carrier to carrier. Read more



you are here ›› homefaqhome insurance
Frequently Asked Questions - Home Insurance