Things That Determine The Cost Of Homeowners Insurance

It is a very terrible experience working hard for a long time and finally building your dream home before tragedy comes and reduces it to nothing. Well, accidents such as fires and other natural havocs are inevitable and the best way of staying on the safe side is insuring your home. Insurance companies have different types of covers for you and you might wonder why they are not priced equally. The cost of homeowner’s insurance is determined by a couple of factors which you need to have an idea of for you to estimate the amount of money you will be required to pay for the cover beforehand. Here are some of them;

Things That Determine The Cost Of Homeowners Insurance

Frequency Of Risk

Most insurance companies will check your records before giving you a suitable homeowners insurance. If you have filed several claims in the past, be sure to receive a much higher quote. This is because the insurance provider uses the number of times you have filed the claims in the past as a way of determining the probability of you filing a claim in the near future. People who have filed very few claims or none at all in the past receive low-cost insurance covers.

Replacement Cost

The projected replacement cost is the amount of money required to build the exact home where it is located. It is somehow different from the market value of the house which may take into consideration things such as the price of the stretch of land onto which the house is located. If the replacement cost of your house is a bit high, it is expected for your insurance policy cost to be high as well. This is because the insurance company will have to give you the money required to build the home in case of an accident, something that calls for premiums that are proportional to the home’s replacement cost.

Risk Factors On Your Property

The kind of items you have on your property largely determine the cost of your homeowners’ insurance. Depending on what your insurance is covering your house against, insurers will determine the cost depending on the relationship of these things and how they affect the risk insured. If you have a security wall and a working alarm system, your anti-theft homeowners’ insurance policy will definitely lower since you have employed measures that help to reduce the probability of occurrence of the said risks. On the other hand, if you have a swimming pool and trampoline in your backyard, your cost of insurance will be higher since people are more likely to injure themselves when moving around these facilities.

Age and Condition of The Home

Insurers look into the age and condition of a home before determining the coverage cost. An old home with ageing systems is more expensive to insure than one with new electrical, plumbing and air conditioning systems. Houses that are in good condition and are renovated regularly are cheaper to insure. The building material that was used to build a house is also considered since things such as wood are flammable and might increase the chances of your house burning whenever a fire accident strikes.

Amount of Coverage

The amount of coverage you settle on has a big impact on the cost of insurance. If you possess some valuable items such as jewelry and decide to include them in the cover, be sure to see the price of the policy rise. The usual general homeowners’ insurance won’t probably cover such things and including them will cost you more. Nowadays, insurance providers have an option where people can customize their policies and decide on the specific things that should be covered. The nature and value of these items that you settle on determine the cost.


Your neighborhood is used as an important factor when determining how much your coverage will cost. People living in areas that are more susceptible to natural disasters pay higher premiums than those living in safe areas. On the other hand, if the area is not safe due to the high crime rates, expect to pay more for coverage.


This refers to the amount of money you have to pay to an insurer before they pay for a claim. Selecting the right deductible is an important decision as it affects the cost of the overall policy. This is so because the higher the deductible, the more money you save on the premiums. It is important to check with your insurer on their policy regarding these deductibles and see whether they are available for you or not. This is so because some policies may have separate deductibles for specific kinds of damages.

Proximity To Safety Amenities

Homes that are close to fire departments pay less in premiums compared to those that are far away. This is because the closer a home is to the fire department, the better the chances of the house being salvaged in the event of a fire accident. Related to the proximity, the distance from your home to a water body may be taken into consideration when determining the cost.

Credit History

While a bad credit score might not deny you a homeowner’s insurance policy, it plays a part in determining the amount you have to pay. Under this factor, a couple of things are looked into. Most insurance firms have their own credit formula, and most of them include the payment history, outstanding debt, credit history length, pursuit of new credit and credit mix.

Related to the credit history, is the insurance score.Some of the ways to improve this score are to avoid having any defaulting debt, carrying a modest amount of money on your credit cards and avoiding a tax lien at all costs.

The mentioned things are some of the few aspects that are used to determine the cost of any home insurance in Cincinnati Ohio. It is important to understand them before purchasing a suitable policy for you so that you are not caught off-guard by the premiums your insurer asks you to pay.