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5 Coverage Factors That Affect Your Homeowners Rates


5 Coverage Factors That Affect Your Homeowners Rates

Shopping for homeowners insurance can make you aware of all the different coverage options, limits, and rates required for your home. Your coverage options and quoted rates may fluctuate between companies, but why? We’re going to break down 5 common factors that could affect your homeowners rates.

1. Replacement Cost of Your Home

We all want to be protected, but that can come at a premium. The replacement cost of your home is the amount to rebuild the exact same home at today’s cost. Keep in mind, it is not the same as the market value of the home which includes factors such as the land size and location. To make sure that you are properly insuring your home, have your agent provide an accurate replacement cost estimate.

2. Deductibles

A deductible is the amount you will be required to pay during a covered loss before your insurance kicks in. The deductible that you choose is important. The higher your deductible, the lower your premium will be, but keep in mind you’ll have to pay that amount if a loss occurs. According to the Insurance Information Institute, you can save 25% on your policy be raising your deductible from $500 to $1,000. Talk to your agent to see how much your savings would be by adjusting your deductible levels

3. Liability

The amount of personal liability that you select should be carefully considered. The most popular amount is typically $100,000. This amount of coverage can go quickly with medical expense and lawsuits if someone is seriously injured at your home. You will also need to increase your liability limits for certain circumstances such as having construction done at your home or owning a pool.

4. Age and construction of your home

Older homes have a special charm that newly constructed homes don’t, however, they also can develop more problems. Insurers may refuse coverage if your home is over a certain age. Before deciding to buy that quaint colonial, consider the cost of making repairs and the replacement cost of your home. Insurers also pay close attention to the style of roof and the construction of the home. The roof style can help protect the home from wind or water damage or aid in causing more damage. Look for homes with hip or gable roofs. Just as important as the roof, are the walls that support it. Fortified homes are built to stronger codes which help to protect your home from damage caused my Mother Nature. There are many ways to fortify your home. Check them out at These safety features can keep the cost of your coverage down.

5. Pool

These summer hot spots will increase your premium due to the need for additional liability coverage. Between swimming pools and your coverage, there are many factors that come into play. Ask your insurance agent what guidelines and rules need to be followed to ensure you are covered if someone is injured while visiting your pool. Pools can also increase your coverage A – Dwelling Amount which can affect how much you pay.

Being a homeowner is an exciting experience. Before you begin shopping for a new home or insurance policy, keep these factors in mind and how they could play a part in determining the amount and type of coverage you need. Contact a local Lighthouse agent to learn where you can save on your homeowners policy!