The 11 Biggest Factors That Affect Your Home Insurance Rates

The 11 Biggest Factors That Affect Your Home Insurance Rates

September 29, 2020General

There are many different factors that are considered when determining your home insurance rates, and insurance companies have different formulas for coming up with their numbers. However, there are some factors that most insurance companies have in common and that you can expect to make a difference when it is time for quotes from home insurance providers.

Value of Your Home

Your insurance premiums are based in a large part on how much money it would cost to replace your home if it was damaged. To arrive at this number, insurance companies begin with the value of your home. Home values vary based on the size of the home, where it is located, and in some ways the materials that were used to build the home.

If you live in an area where home prices are high and have a large house, you can expect to pay high rates. If you live in an area where home costs are low and your home is small or modest, you will pay a lower rate.

Deductible You Choose

Part of how much you pay is determined by you. In most cases, you will be offered the choice of a deductible, or money that or pay out of pocket before the insurance company begins to cover your losses. If you choose a higher deductible, you will pay more money out of pocket but your premiums will be lower. If you choose a low deductible, you will not pay much out of pocket but you will pay higher premiums.

When considering your deductible, you should determine how much money you would be able to come up with as a lump sum if something went wrong on your property. Your deductible should be no higher than that amount.

Insurance Score

Your insurance score is a rating run by insurance companies. It is meant to determine how likely it is that you will be claiming a loss. Factors that go into the calculation include how many insurance claims you have filed in the past and your credit history. If you improve your credit score, you can improve your insurance score as well.

Wood Stove or Fireplace

The insurance company will want to know whether your home is heated all or in part by a wood stove or a fireplace and how many of these you will be using in your home. Your risk for having a fire in your home goes up if you are burning wood inside, especially if it is your main source of heat.

Age of Your Home

The age of your home makes a difference in your insurance costs because older homes tend to need repairs and may not have the newest, safest materials and technology a new home would have.

Additional Structures

If you have additional structures on your property like detached garages, workshops, or sheds, these structures will be assessed as part of your home insurance needs.

Fire Station Location

Your insurance company will want to know the location of your nearest fire station and possibly your nearest fire hydrant. Your risk of losing your home in the fire is higher if you are further away from your fire station.


It's important to know how much crime is in your city and neighborhood so your insurance company can calculate how likely it is that your home or property will be broken into and items will be stolen. You can help counteract the cost of living in a high-crime area with measures like a home security system and strong locks or bars on doors and windows.

Swimming Pool

A swimming pool is a cause for concern from an insurance perspective, and the insurance company will want to know if you have one and how it is secured. You will probably be required to have locked fencing around your home swimming pool.


The quality of your roof will play a part in deciding how much you are charged for insurance. Roofs that will need repairs right away cost more to insure that new roofs. You can expect to pay higher home insurance rates if your roof will need to be replaced soon.

Home Business

If you are using space in your home for a home-based business, you will require more insurance. This is especially true if you will have clients and customers visiting you at your home.

Shopping for insurance isn't always easy. You may become confused about what insurance companies are looking at when they decide how much you will be paying in home insurance rates. View the top 5 home insurance providers on The Comparison Company, where we help you save money and get the best home insurance possible by allowing you to see and compare several different quotes from insurance companies. We help you get the peace of mind that comes from knowing you have chosen the right insurance at the lowest possible rate.

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