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Factors that Lower your Homeowners’ Insurance Cost – Part 1


A comprehensive guide to factors that lower your homeowners’ insurance premium

Buying a house and living the big dream doesn’t come easy. Since it is one of our biggest investments and an emotional one too, we do not buy a house in haste; it can certainly not be an impulsive decision. With the care and love that we buy our house, we also want to protect it by opting for a home insurance policy to insure our precious possession. Also it becomes compulsory for homeowners with a mortgage. Thus along comes buying homeowners insurance after the buying of house.

It is no secret that insurance planning and buying is a complicated procedure. At the time of choosing a plan, we often stop at premium comparison and settle with the best available options that we find suitable. Choosing and buying an insurance policy brings a feeling of accomplishment since a big item from our task list gets checked so we prefer not looking back or review what we have unless we have had a bad experience with our provider. The thought that we have our insurances in place to cover us if there is ever a situation, stops us from worrying about tracking if there can be ways to save in our insurance expenses. Thus, our engagement with insurance gets limited to paying the premiums routinely and proceeding with the timely renewals.

Here is a comprehensive list of factors that would serve as a great checklist to correct your homeowners’ insurance prices for your existing policies or to select the best price on your insurance if buying a new one:

This list is segregated into four parts. In this article, I will start with Part 1 “Factors related to home features to lower the insurance cost”.

For following through the entire list, check my upcoming blogs which will cover the other three factors:

  1. Part 1: Factors related to home features that affect home insurance cost
  2. Part 2: Factors related to home safety to lower the insurance cost
  3. Part 3: Factors related to personal profile to lower the insurance cost
  4. Part 4: Other important factors to lower your insurance cost

insurance cost, Factors that Lower your Homeowners’ Insurance Cost – Part 1

Roof Condition

Age of the roof, its resistance to heavy wind and layers of roof materials are some criteria that effect insurance pricing. Having a roof that is less than 10 years old or can withstand strong winds means reduced premium and chances of being covered in full. However, having a multiple layer of roof materials might increase your insurance cost. Before roof replacement, it is sensible to first discuss with your insurer how will you be covered and how you could reduce your premium with the roof modification. Impact resistant roofing receives insurance discounts. These upgrades could also include some tax discounts. Insurers classify roofs in grades 1 through 4, 4 being the best to avail better insurance discount. For more on this, see

Age, size and construction of the home

If the home is older, it could come with various issues like structural problems, plumbing problems, electrical wiring problems, or more. An old home would most likely require more repairs and renovations. The older the home the more susceptible it will be to leaks and damages. Insurers see higher risk with older homes, this can result in increased insurance premiums. Likewise, the construction materials used are also taken into account. Harder substances like wood and stone used in construction ensures lower insurance costs than softer substances like wood and siding, as they are more prone to inflammation hazards and destruction. In addition, using more expensive material and excessive upgrading of the house compared to your neighbors’ would attract more insurance charges. Insurance rate rises up with the increasing size of the house; the bigger the house, higher will be the insurance cost.

Owning a new home

Newer homes mean lesser maintenance and lower to no incidences of leaks, malfunctions, repairs and renovations. This reduces the risk for insurers, hence reduced insurance rates.

Contents and Valuables

There are valuables and assets at home like jewelry that are not covered by usual insurances.  To insure these items require additional coverages which come at additional cost. Before considering additional coverage expenses, it would be a smarter idea to look at alternatives provided by new insurtechs or insurance providers or using a bank locker to ensure the valuables’ safety.

Finished Basement

A finished basement requires a lot of money to get the renovation done. This investment increases the replacement cost value.  A finished basement also increases the chances of basement flooding. Due to increased risks, there is an insurance rate hike.

Multiple Buildings

If you have additional structures like a barn or shed, that adds to the insurance cost. If these are not in use, these could be removed to reduce insurance charges.

Swimming pool, hot tub, tennis court or trampoline

Any major upgrades like a swimming pool or trampoline increase the insurance cost due to its added risks. For entertainment, you can consider an addition that does not affect the insurance cost. As a swimming pool replacement, a club membership will prove to be more manageable avoiding the insurance burdens.

New wiring

Home wiring is a major cause of fire in households. Having properly installed new wiring also reduces incidences of outages and shortages.

Electrical system without a circuit breaker

If your electrical system is not up to current standards, the insurance rate is impacted. Circuit breakers in place of fuses are preferred in houses for avoiding adding up of insurance charges.  Even for an older home, upgraded electrical system could save on high Insurance rates.

Fireplace or wood burning stove

A Fireplace or a wood burning stove increases chances of fire hazards in the house. However modern it is, it cannot avoid incidences of sparks and spits. Moreover, if you combine one with younger children at home, the rate shoots even higher. If these meet code requirements, installing a smoke detector nearby and fire extinguishers within reach for quick access, some insurers may make concessions.

Fire station nearby or fire hydrants in the community

The closer your home is to a fire station the lower will be the insurance cost as it means lesser damage caused by fire due to faster rescue opportunity.  Similarly having fire hydrants closer to house also entitles for some discount for similar fire protection reasons.

Crime rate in the area and crime prevention services nearby

An area that has high crime rate will have increased insurance rates. Buying a home in a low crime rate area along with security gets lower insurance rates. A home with law enforcement or crime prevention services nearby is factored for lower insurance rates.

Water body nearby

Insurers see having any type of water body nearby as a possible risk of flooding. Even if it is not in the high-risk flooding zone, having flood insurance could be a good idea. Lower risk zones will have reduced flood insurance costs.

Flood Prone area

There are various zones to classify flood prone areas. The riskier area will cost more for insurance than a less risky one. In addition, if any area falls under multiple flood zones, the insurance cost will hike up much more. Flood insurance cost could be very expensive with NFIP and they come with lower deductibles. Private Flood insurers offer lower premium charges. How flood resistant your home is may also contribute to some insurance cost reductions.


Remodeling, upgrades your home and its value. If you are deciding on upgrading your home, 10 Upgrades to increase your home value would be a good read. Regularly updating your home replacement cost with the new add-ons might increase the insurance premiums but it will help providing the right coverage matching the new construction costs.

Neighborhood homeowners association

A homeowners association is a committee that enforces neighborhood laws and standards. It maintains security watch and maintenance for common areas. Homes that are part of such committees will be less risky due to their regulations and standards as well as the safety perception it creates. Therefore, insurance providers add a discount for the reduced risk it appears to be.

Home based business

Homeowners insurance does not cover your home based business. This means your business property and documents, if destroyed, would have very little to no coverage. This also means if there is a downtime in work due to the damages that will also not be covered by your home insurance. Other damages not included are bodily injury and property damage to others. Special endorsement and excess liability coverage could be added to safeguard your home business against some of these discussed risks.

The home that is the cause for insurance spending also becomes the cause for some savings with its features. Be your own advocate and check which ones among these apply to you, while the other parts of the series are made ready for your insurance saving attempt.

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