What causes home insurance rates to be different?

Why is my homeowners insurance higher than my neighbor? You are speaking with your neighbor and he mentions that he just got his homeowners insurance in the mail. The neighbor lets you know what he is paying, you go home and check yours to find out you are paying a few hundred dollar more. First thing you do the next day is call up agent to find out more.

There are several reasons for the difference in what you pay to protect your home from loss.

  • Your deductible
  • The value of your home and belongings
  • Your claim history
  • Other variables, such as the age of your home, shape of roof.

There usually is a simple explanation even if you and your neighbor have the same insurance carrier. There are several factors that go into how much premium a homeowner’s insurance policy will be. Let’s take a look at the difference in the two homes. You home was built in 1980 while your neighbor’s home was built 2000. The age of a home does contribute to the cost of the premium (how much it costs to insure a home.) A newer home will have more credits towards the cost of the premium because there is less of a chance of something breaking.

frame construction homeYour home is a frame home (built out of wood) compared to the neighbor. Their home is a block home (concrete blocks.) The insurance companies will charge more for a frame home because they are not built as strong as a block home and are more of a fire hazard (wood burns easier than cement.) Your home has a different style roof. Your home has a gable style roof (it looks like an A frame.) The neighbors roof is a hip style (more 3 dimensional and looks like a pyramid). A hip style roof allows the wind to flow over easier ( more aerodynamic ) and is less prone to wind damage.

As you can see, even though the homes could be right across the street and be insured by the same insurance company the price will vary based on several factors besides proximity. The age of a home, what the home is made of along with the style of roof. Central Ridge Insurers has several years experience in writing homeowners insurance and can find the best fit for your situation. We make sure your are insured correctly, getting the best coverage at the best price to on the home’s structure and your needs.

Learn more about what drives home insurance costs from the Insurance Information Institute here.

Read more information from Central ridge Insurers about home insurance here.

If you don’t understand your insurance costs, contact us for help.