How Much Will Your Home Insurance Cost? 5 Things That Factor Into The Price

Are you looking to purchase a new home? If so, are you aware that there are many things pertaining to a new home that can substantially raise or lower the amount of your new homeowner’s insurance policy? Knowing about how much you will pay for your homeowners insurance is important because it can help you determine how much mortgage you can afford. Listed below are a few factors that can influence the cost of your insurance premium and should therefore be considered before purchasing a new home.

The Age and Structure of the Home

The style and age of the home can make a considerable difference in your insurance premium amount. A newer home of 10 years or less will often qualify for a discount, whereas, older homes may require an increase in the insurance premium. The materials that were used to construct the home can cause the premium to fluctuate up or down as well. For example, brick homes are the most wind resistant and wooden frame homes are more suitable in the event of an earthquake. A home that has these features can help to reduce the insurance premium if the home is located in a disaster prone area.

Other Structures on the Property

If the property contains an inground pool or has one or more buildings, such as a barn or utility building, the insurance premium may be drastically higher than a home without these additions.

If a Fire Hydrant or Fire Station is Located Near the Home

Depending on whether or not the home is accessible to a fire station or fire hydrant can significantly affect the insurance premium for the home. If the fire station is professional-based or volunteer-based, can also make a difference in the premium.

Size of the Home

The home’s size and value has a huge impact on your insurance premium. Obviously a larger home would be more expensive to replace, so if you live in an area with luxury homes, be sure that you buy the appropriate amount of insurance coverage that will cover the entire value of the home.

A Home Security System

Some insurance companies offer as much as 10 to 20 percent off insurance premiums for homes that are protected with dead bolts and a good security system. Impact-resistant windows and doors can also help to keep out intruders and offers disaster protection as well, which can also help to lower homeowner insurance costs considerably. If you purchase and install a security system, you may find that the discount on insurance is enough to cover your monthly security protection.

Disaster or Flood Prone Area

If the area where the home is located is prone to flood or experience earthquakes, the insurance company will most likely require mandatory flood or earthquake insurance. Since both of these types of coverage are typically not included in a regular homeowner’s policy, you would be required to purchase a separate policy, which can be expensive. A real estate expert can help you determine if your area is prone to any severe weather conditions and let you know if any additional coverage may be required.

Knowing this information can greatly aid you in deciding if a home you may be considering for purchase is right for you. Simply contact your insurance agent and let him or her know which of these factors are applicable. This will allow you to obtain a rough estimate of the new homeowner’s insurance premium. This figure, along with the new estimated mortgage amount, can then be used to determine if the new home is affordable for your family and fits comfortably within your current budget.

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