Using the Average Cost of Home Insurance: Why Your Premium May Be Lower

Homeowners who ask about the average cost of home insurance are looking for a way to determine how much money they will have to budget to protect themselves and their family. To calculate an average figure the industry uses dozens of different factors, so at best what this figure can provide is a very flexible guideline.

Home insurance costs differ greatly because of the factors that the insurance industry uses to determine the insurance premium; geographical location, age of the homeowner and even the method and frequency of payment can change the cost of an insurance premium. How does the geographical area affect the average cost of home insurance? Home insurance in Georgia will be different than the average cost of the same types of homes in California. Why? Because Georgia does not have a history of earthquakes activity.

When you are looking at figures for the average cost of home insurance it's helpful to understand that the age of your home and its features play a big role in the rate you pay for your home insurance policy. The statistics that insurance companies have collected over the years show that the older the home is the more problems it will have with electrical work, plumbing and roofing, in addition to the fact that building codes have changed over the years. All of this spells more claims to the insurance company and means they will have to pay out money. Homeowners of older homes pay more for their insurance as a result.

If you own an extremely large home, to the insurance company this means there will be more material needed to rebuild it in the event of a disaster and more contents to be replaced as well, hence the home insurance policy will be more expensive. The materials are also important; if you live in an area that has a history of wildfires and your home is a wood frame or has wood siding or shingles, your home insurance premium will be more than the homeowner with the same size home built from masonry; brick is more fire resistant than wood.

The safety features of your home such as a burglar alarm, smoke detector or deadbolt lock on the doors will all count toward a lower home insurance policy. On the other hand if your home has an in ground swimming pool or hot tub your rate will be higher.