Top 7 Things that Affect the Cost of Homeownership
7 Things That Affect What You Pay for Homeowner’s Insurance
Homeowner’s insurance is a non-negotiable. Not only does it protect you in the event the home is damaged, but it also includes liability insurance in the event someone is injured at your home. When evaluating the policy, insurance companies consider multiple items to determine their risk—and your cost. Here are 7 things that affect the amount you pay for homeowner’s insurance—some that might make sense and some that might surprise you.
SquareFootage–Firstandforemost,thesizeofthehomeisconsidered. The larger the home, the more it would cost to replace if damage occurred. More space also means more furniture, fixtures, personal belongings, and other items which would be replaced in a claim.
Layout–Thestyleofthehomeisanotherfactorindetermining replacement costs. A single-story home, for example, might have higher foundation and grading costs, whereas a two-story home would need alternative construction methods.
ConstructionMaterials–Thetypeofmaterialusedtobuildthestructureis important. Wood roofs would cost more to insure against a fire claim, as would a home with expensive travertine floors. A simpler home of modest building materials would cost less to insure.
PropertyAge–Theassumptionisthatanolderhomemighthavemore deterioration than a newer home and this is considered in the replacement cost.
HomeFeatures–Homeswithextrabuildingsorpoolswillbeinsuredata higher cost than other properties without these amenities.
Neighborhood–Localcrimeratesarereviewedtodeterminetheriskto property and personal items.
CreditScore–Finally,theinsurancecompanywillconsiderthe homeowner’s credit score. Not only does this help them understand if they are at risk for non-payment, but serious credit issues might be a factor in how well a property is maintained.