Homeowners Insurance Policy Costs
If you are raising a family and your hard-earned cash is working towards your beautiful home, then homeowners insurance might be a wise decision for you. A common question is how much do home insurance policies cost, and the answer is always it depends.
How Much Do Home Insurance Policies Cost?
Here at Tatum, our goal is to understand your needs to provide you with the appropriate insurance coverage package. Here are some factors to consider when determining the type of coverage to select:
- What policy do you choose? Homeowner’s insurance policies often do not come as a package, so those who would like more broad coverage would pay accordingly.
- How much house do you want to cover? While your mortgage company may only require coverage of $100,000, you may decide that a $500,000 plan better meets your needs.
- How much is your deductible? If you have a lower deductible, then the amount out of pocket when a loss event occurs would be lower, but a higher premium would be paid each month.
- How big is your home? Is it a small town home or a large mansion? As the size of your home increases, the cost to insure the home would also increase.
Usually, the two primary factors are the home’s age and the average value of the home. The materials used to construct your house may also factor into determining the cost of your policy. For example, a home made of wood could potentially be destroyed easier than a home made of brick. If you are considering purchasing a home, take an in-depth look at the material used to construct the property as this may end up costing you more to insure your property.
The Impact Of Your Home’s Value On Your Insurance Cost
The value of your home is a determinant of your homeowner’s insurance rate. If you owned two identical house in Arizona and Oklahoma that were similar in every way, the home insurance rate could still vary based on the actual price. Usually, the cheaper your house, the less expensive your homeowner’s insurance policy will be. The reverse is also true; the more expensive your house, the higher your home insurance policy will remain.
The Impact Of Your Home’s Age On Your Insurance Cost
The reason age is a determinant of the cost of your home insurance is fairly straight forward. The older your house, the more faulty the columns and wood are, and the more susceptible your house is to damages. The way homeowners insurance works is the riskier a structure is, the higher the insurance will be. The reason for that is because the insurance company is more likely to have to pay out the person insured because they are more likely to file a claim.
There are a lot of ways to save on your home insurance policy. Here you can learn more.