What Will My Homeowners Insurance Cost

At Gilbert Insurance, we are strong believers in educating our clients about insurance. The more informed you are about your insurance coverages, exclusions, rates, and deductibles, the more peace of mind it will give you that you have the optimal protection, at the best price, for your specific property, possessions, and, most important, the people in your life.

For over 65 years, we’ve been sharing our knowledge with homebuyers and homeowners in Reading and throughout the Greater Boston area, and one of the most frequently asked questions we get is, “What will my home insurance cost?”

This is certainly a key question to ask before you make any insurance-buying decisions, not to mention home-buying decisions. It is also a question that your insurance professional should take their time to explain to you because the answer depends on a combination of factors, several of which you actually have some control over.

The Five Factors That Affect Your Home Insurance Rates

While the process insurers use to set your premium can be quite complicated and includes many steps and variables, we’ve managed to boil it down to the five most important factors that will affect your home insurance:

The Replacement Value of Your Home
The replacement value of your home is the actual cost that it would take to rebuild your home, to its pre-loss condition, if it were ever destroyed. Replacement value is not to be confused with either the market value of the home – the price you think you can sell it at in a reasonable period of time – or your home’s taxable value as deemed by your town’s assessor.

To determine your home’s replacement value, the Gilbert team does a thorough evaluation of your home and property, asking questions such as:

  • What is the square footage of the building and property?
  • Which construction materials, like wood, brick, or masonry, were used in your home?
  • Have you made any upgrades since moving in, like adding a pool, custom cabinetry, granite countertops or top-of-the-line appliances?
  • How many bathrooms are in your home?
  • What kind of appliances do you have?
  • What is the flooring material?
  • Do you have a garage and, if so, is it separate or attached?
  • Do you have a basement and, if so, is it finished?

We ask these questions, and many others like them, so that we can accurately calculate what it is going to cost to rebuild your home, with today’s materials and using local construction and labor, as well as to ensure that you have the proper home insurance coverage.

Your Credit Score
That your credit score can affect your home insurance premium is often a surprise to homeowners and potential homebuyers, but it is a fact that insurance companies will factor a lot of the information from your credit report into your rate. Insurers will consider your outstanding debt levels, the length of your credit history, whether you pay bills on time, and how many credit card accounts you’ve opened as well as any new applications for credit. As you might suspect, establishing a long credit history with an absence of late payments and collection accounts as well as low credit card balances and very few new credit accounts will be looked upon favorably. In fact, some insurance companies reserve their best rates for consumers with excellent credit. If you are so lucky to be designated to this “premium pricing” rate group, it can save you as much as 15% on your homeowners insurance premium versus another homeowner who has only an average credit score.

What’s the worst thing that can happen if your credit score is not up to snuff? Unfortunately, it can mean that many of the top-rated insurance companies could deny your home insurance coverage all together.

Your Home’s Security
The safety of your surrounding community and what steps you’ve taken to secure your home will be taken into consideration when determining your insurance premium. Insurers will evaluate:

  • The quality of the responding fire department including whether it is paid or volunteer
  • Adequacy of water pressure and water supply in your community
  • Distance from your home to the nearest fire station
  • Distance from your home to the nearest fire hydrant and the quality of the hydrant
  • Risk of loss posed by properties in the neighborhood and surrounding area, like an office building, a subdivision, or a manufacturing facility

While much of this is out of your personal control, you can influence your home insurance rates by taking measures that will better secure your home and protect your loved ones and the valuable possessions within it. Many insurance companies will offer homeowners insurance credits for installing the following safety features:

  • A security system
  • Smoke detectors
  • A sprinkler system
  • Deadbolts

Just having these devices in your home can help to lower your premium. However, any alarms that are professionally monitored 24 hours a day, seven days a week will garner the most savings. Why? Because insurers recognize that systems that are connected directly to your local police department, fire station, or some other central monitoring station, reduce the likelihood that your home will be burglarized or suffer costly water or fire damage, which ultimately can mean you will file less claims against your insurance. The discount for a central station alarm can be as much as 15% off of your homeowners insurance premium.

Age of Your Home
The older your home, the more vulnerable it is to damage. In addition, an older home is more likely to have systems and structural elements that are not updated to meet current building codes and regulations. Plus, some of the materials and features in old homes, like plaster walls, ornate moldings, stained-glass windows, and hardwood floors, while beautiful can be very costly to repair and replace. Thus, homeowners with aging houses are generally going to have higher insurance rates than owners of new construction. However, if you own an older property, you can positively affect your premium by making home improvements that will reduce the likelihood of a loss, including replacing an aging roof and updating the electrical, plumbing and heating systems.
What Home Insurance Discounts You Qualify For
There are numerous discounts, credits, and savings that you could be eligible for, but may not be taking advantage of, including:
  • Discounts of up to 20% for bundling auto and home insurance with the same carrier
  • Non-smoking household credit
  • Mature homeowners credits for those 65 and older
  • Loss-free credits for homeowners who have no claims history
  • New homebuyer credits

And that’s only a short list of what could be available to you through a local, independent insurance agent, like Gilbert. Most independent agents are free to shop multiple insurance carriers on your behalf in order to find the best home insurance options for you and to take advantage of all the savings that you are eligible for.

In addition to these five main factors, there are other special circumstances that can affect your home insurance premium. Individuals and families with high value homes or homes in coastal areas, people who have one or more investment properties, and/or homeowners who have many expensive items, like a diamond jewelry collection, a grand piano, or priceless heirlooms, typically require specialized insurance solutions like Coastal Home Insurance, High Value Home Insurance, Investment Property Insurance, or a Scheduled Property Personal Property endorsement , to ensure that their home(s) and belongings are properly protected. While this can often mean a higher insurance premium, when you work with an independent agent, like Gilbert Insurance, we can assist you with finding the right coverage options, at the most affordable prices, to meet your unique needs.

Now that you understand that there are a variety of factors that go into determining your home insurance premium, it hopefully will not come as a surprise that the cost of your insurance will probably fluctuate from year to year. However, even if you experience an increase in your premium, we recommend that you don’t immediately hop online and switch to a less expensive home insurance option. As we’ve shared with you, there is a ton of information about you, your property, and your belongings that should be collected to ensure the replacement value of your home and other important calculations are done accurately.

Whether you’re about to embark on homeownership for the first time and would like help budgeting for home insurance, or you have home insurance already but aren’t sure it’s competitively priced, or you simply want to make sure you have the appropriate home insurance coverage, please contact Gilbert Insurance. We are ready to assist you with our signature combination of great service, price and protection.