My Location

Home Insurance Rates: How Providers Determine How Much You Should Pay

How are homeowner’s insurance rates set? It’s complicated. On the surface, the two exact homes may seem as if their rates should be the same. Look a little deeper and you’ll probably find the rates differ, and the reasons are in the details.

Providers decide insurance rates for a home by looking at a lot of factors including:


  1. The home itself.

How old your home is, its size, the condition its in and what it’s made of all have an influence on rates. Older homes are generally require more coverage because the risks are higher and replacement is more expensive. A bigger home has more to insure. If the home has a wooden frame it probably won’t withstand adverse events such as earthquakes. Certain kinds of roofs are more likely to catch fire when the conditions are right.


  1. Where the home is located.

As with real estate values, insurance rates are affected by location. Some neighborhoods aren’t as safe as others. If there’s a history of crime the risk of damage is higher, for example. Or maybe the home is located in a heavily wooded area that is vulnerable to fire.


  1. Insurance history of you and the home.

Providers look at how many claims you have filed on a home in the past. Are you likely to file for little things, like replacing a window, or do you only claim when you absolutely have to because of the expense. Frequent small claims could indicate that you’re riskier to cover. They also look at how many and what kind of claims have been filed on the a house you’ve just bought.

How to Keep Rates Down

There are some actions you can take to help cut your insurance costs:

  • Install a security system. Show proof that you have a system and alarms that send notices to the police and you can save costs.
  • If you have an older home make it more secure. Install smoke alarms, in-house sprinklers, CO2 detectors and deadbolts.
  • Get a multiple policy discount. If your provider offers discounts for having more than one kind of insurance policy with them. You could save as much as ten percent.
  • Select a higher deductible. Higher deductibles mean lower premiums. This is a choice you should only make if you have the means to cover smaller repairs out of your own pocket.
  • Compare policy rates. Get a few quotes to see to find the best policy at the best rate. It’s helpful to do this annually just to see what your insurer’s competition would charge for the same coverage.

The moral of this story is do what you can to lower the risk to the insurer as much as possible. Also, see if better rates are available to you. See if you can find a better rate by comparing quotes. Get started using our homeowner’s insurance quote tool.

Leave a Reply

Insurance Reference Guides

Where you live may affect your coverage options. Our reference guide will assist you in findoing plans available in your state.

Insurance Terms Glossary

From "absolute liability" to "written premiums," we've done the work for you to define commonly used insurance terms.

© 2018 e-INSURE. Privacy Policy | Terms

EInsure Services, Inc., Insurance Services, Chicago, IL

contact info

company info

partnership details