If you own a home, you have to pay for home insurance. It’s just one of those expenses that you cannot go without.
In this article, we’ll talk about some of the factors that affect the cost of your home insurance, so you can feel better prepared as you start shopping for it.
How Much Is Home Insurance?
Whenever you’re asking yourself how much something costs, you should first check if there is any sort of calculation required to determine the cost. If there isn’t, then there is probably a straight answer. If there is, then the answer is always going to be, “It depends.”
That’s true whether we’re talking about the cost of building a home or purchasing insurance for your car or home. All of these products or services require a sales representative or contractor performing a number of different calculations. These calculations can change the price of goods or services significantly.
So if you’re asking “How much is home insurance,” and you’re hoping to get a straight answer, we’re sorry to disappoint you. The fact is there is no straight answer we, or anyone else, can give you.
That being said, we can give you a list of factors that may affect the cost of your home insurance.
Factors You Should Consider
There are many factors that affect the final cost of your home insurance. If you want to get an idea of how much home insurance is going to cost, these factors are a great place to start.
1. Where are you located?
It should come as no surprise that insurance rates are going to change depending on where your house is located. If you live in tornado alley then you can expect that insurance is going to cost more to cover that. If you own a lakeside house, then it’s inherently worth more than your neighbor's house that’s further inland. This added value is going to increase the cost of insurance as well. Likewise, if you live in a high-crime neighborhood, the value of your house may be lower, but the likelihood that something may happen to it goes up.
Additionally, local insurance regulations and requirements will change the cost of insurance. If you live in California, where things are more regulated, you can expect insurance to cost more. But if you live in Utah, where markets aren’t as heavily regulated, you can expect your insurance to cost less.
The old saying, “Location, location, location,” applies to home insurance just as much as anything else.
2. What added expenses should you opt in for?
Sometimes insurance companies require that you opt into certain packages before they’ll cover you. This is normally a requirement by law. For example, people in Los Angeles to be covered for earthquakes. The more events you have to insure your home against, the more you’ll have to pay.
Whether these additional expenses are necessary or optional, they will affect your final total.
3. What realistically could happen to your house?
You may be tempted to pay for the bare minimum home insurance plan possible, but that’s not always the best idea. Insurance is entirely centered around cost and risks. If you don’t already know, you need to talk with your neighbors and get an idea for the real risks that come with living in your area. Weather, crime, home age, and possessions will all affect the cost of your insurance.
4. What else can you do to lower your insurance cost?
There are plenty of things you can do to lower the price of your home insurance, from security cameras to basic maintenance to heavier investments like renovations. Most insurance companies can help you understand what steps you can take to lower the cost of your insurance. All you have to do is ask.
5. Are you a financial risk?
When an insurance company is calculating insurance costs, you’re actually a factor in that. For example, they’ll look at your credit history to decide whether or not you are a safe investment. A poor credit score or risky financial behavior won’t necessarily prevent you from getting home insurance, but it will certainly affect how much they charge to insure you.
If you have bad credit, try to fix it as best as you can before applying for home insurance. Pay off your debts, make more of your payments on time, and don’t make any large, unnecessary purchases. All of this will help you improve your credit score and hopefully make you look less risky as a customer.
6. Have you shopped around?
It’s always surprising how few people actually shop around when they’re looking for home insurance. In a way, it’s kind of understandable. There’s a lot of paperwork and research that goes into home insurance. The idea of putting that much effort into multiple companies can be overwhelming.
But the fact is that the less you choose to shop around, the more you’re choosing to pay.
Nothing says you have to look at every possible insurance provider before making your decision, but check out a couple of them before you decide.
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No matter who you choose to insure your house, Vivint Solar is here to insure your wallet against your utility company. Vivint Solar’s solar energy systems can probably help you save money on your electricity bill. Our reps will happily work with you to see whether or not you’re a candidate for solar power.
Contact one of our solar reps today to see if you can save money with Vivint Solar!