Five Major Factors That Impact Your Homeowners Insurance Premiums (And Three More That Might Surprise You!) [infographic]

HomeBlogFive Major Factors That Impact Your Homeowners Insurance Premiums (And Three More That Might Surprise You!) [infographic]

One of the most common questions we get asked at Morco Insurance Agency is what factors impact the cost of homeowners insurance. While there are a lot of nuances that impact your premium, there are a few stand-out factors that have a big influence on what you pay.

Five Major Factors That Impact Your Homeowners Insurance Premiums

First, let’s look at five of the most significant factors influencing your homeowners insurance premium:

  1. Location: This is often the biggest factor that determines your premium. Living in an area that is prone to disasters like fires, flooding, and major storms can raise your premium. Considerations like the local crime rates and even your proximity to a fire hydrant or fire station also play a role in your premiums.
  2. Home Replacement Costs: This refers to how much it would cost to completely rebuild your home if it were destroyed, not the current market value of your home. It’s based on things like the age, square footage, and local building costs.
  3. Your Claims History: You should file a claim when you need one, but filing for too many in a short span of time is a red flag for most insurance companies. Claims for things like theft and water damage are particularly impactful.
  4. Home Age: Newer homes generally have lower homeowners insurance rates because they’re less likely to experience issues that result in claims. Older homes are more likely to have outdated systems that may malfunction and result in a claim.
  5. Credit History: Homeowners insurance companies will run a credit check to help them determine how much of a risk you are to insure. A higher credit score indicates that you’re less of a risk for them.

While those are the main factors that impact your homeowners insurance premiums, here are three more that may surprise you:

  1. Pet Breeds: Dog bite liability payouts are extremely expensive for homeowners insurance providers, so if you have a dog from a breed that is considered “dangerous” you may see a higher premium.
  2. Attractive Nuisances: Features like a pool or trampoline are fun, but they also increase the risk of injury on your property and, therefore, increase your premium.
  3. Marital Status: Homes that are owned by a married couple are statistically less likely to file a claim, so homeowners insurance companies often charge less for couples than married individuals.