According to a 2021 study by the Insurance Information Institute (III), the national average cost of a home insurance policy was $1,249 per year in 2018.
However, the cost of coverage varies based on these factors:
- Location: Because construction costs, weather-related risks and crime rates vary depending on where you live, your location can factor into home insurance rates. Living near a police station or fire department can reduce your rates.
- Replacement cost: Another major factor, replacement cost, is the amount of money required to replace your home with comparable materials and features. Insurers may ask about your home’s size, age and architectural style to set this cost. Local building costs may also factor into replacement cost and thus your cost of coverage.
- Age: Your home’s age can have a significant impact on premiums due to wear and tear and the difficulty of replacing older electric and plumbing systems and building materials.
- Roof: Roof damage can lead to costly and extensive claims. As such, your roof’s age and building material may come up in the quoting process. The newer your roof is, the more affordable premiums you can expect.
- Claims history: Home insurance premiums are based on the likelihood of you filing a claim. As such, AmFam will factor in your claims history. If you’ve filed a homeowners claim in recent years, it could equate to higher costs.
- Credit score: Similarly, the company will use your credit score to gauge your likelihood of filing a claim. Applicants with lower credit scores tend to pay higher rates, while homeowners with fair or good credit scores could unlock lower prices.
- Security: Having security features, such as deadbolts, burglar alarms and sprinklers, can lower your rates. If you have a fire- or impact-resistant roof, it could also help you save on coverage with some providers.
- Renovations: While a minor update like painting your bedroom won’t impact your home’s replacement cost, adding a guest room or getting new countertops and cabinets may. It’s essential to notify your home insurance agent of all upcoming renovations as it could increase your coverage needs and costs.
- Policy structure: The level of dwelling, additional living expenses, personal property and liability coverage you select will have a significant effect on your rates. You may be able to alter your rates with the deductible you choose. With a higher deductible, you’ll pay more out of pocket in the event of a claim but pay less monthly in premiums.
- Pools and trampolines: If you have a trampoline or pool, AmFam could determine that you are at an elevated risk of filing a liability claim due to an injury.
- Dog breed: Some dog breeds are considered high-risk by insurers and can lead to higher rates or be excluded from coverage. Your AmFam agent will look at your dog’s breed, biting history and training to help you determine whether or not your puppy is covered.
- Discounts: With AmFam’s array of discounts, ranging from bundling home or renters insurance with auto insurance to enrolling in paperless billing, you can lower your home insurance rates.
Because so many factors are involved in determining your homeowners insurance cost, we recommend getting a personalized insurance quote from AmFam and a few other providers before signing up for a policy.
