Why do my insurance and my premiums cost so much?

You probably have been asking yourself these questions since you started the home-buying process. Your insurance costs factor in location, condition, construction, and certain features in your home, so you have to be aware of these since some enticing features can jack up your premium.

Let’s look at some factors that could affect your insurance costs:

1. How old your home is and how it is made.

Your insurer looks at the age and structure of the house in determining rates. If your house is older, it will cost more to insure even if it is well maintained. Wooden frames are more likely to catch fire compared to houses made of concrete or brick, so that will raise insurance costs. Historic homes are even more expensive to insure, as these homes can pose structural issues.

2. Where it is-

Your location also matters in insurance costs, since insurance will be more expensive in areas prone to natural disasters like hurricanes, earthquakes, and tornadoes. If you’re in an area where hurricanes happen, you might also need flood insurance.

Additionally, your premiums will be higher where there are more crimes, theft, and burglaries because of more claims or where emergency services are too far from you.

How to Save Money: You can save money on insurance costs by buying a house that can withstand natural disasters in your area. For example, concrete block structure (CBS) homes are more popular in Florida (a hurricane-prone area) because it reduces insurance premiums. Having a home security system and surveillance cameras can also reduce your premiums if you are in an area that has a lot of theft.

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3. Pools and hot tubs-

While swimming pools are relaxing and refreshing, especially during hot summers, they are also extremely dangerous because of drowning and other possible injuries. Insurance companies require pool owners to purchase additional liability insurance for these “attractive nuisances” to protect themselves against pool-related lawsuits, which can increase insurance costs. These costs go even higher with additional features like a slide or a diving board.

Insurance companies will also charge you for more coverage and give you higher premiums for hot tubs because of the lawsuits they attract.

How to Save Money: Protecting your pool with a door alarm system, locked gates, and perimeter fences can help reduce your liability costs.

4. Trampolines-

Trampolines are a mainstay in thousands of American backyards, but they also increase insurance premiums for homeowners because trampoline injuries are common, especially for children. Your homeowner’s insurance policy can cover trampoline-related claims if you have safety precautions like an enclosed safety net to prevent anyone from falling off. For the same reason, skate ramps, large play structures, and park equipment will also cost more to insure.

5. Expensive items like jewelry-

Your premiums will go up if you have a lot of expensive items like wine collections, musical instruments, and high-end watches.

6. Paintings and antiques–

Your most-prized collection of antiques and fine art (e.g. paintings and sculpture) can make getting an insurance company to cover it challenging because these items are so hard to replace.

7. Wood-burning stoves and fireplaces-

While having a wood-burning stove can save you money in heating your home, these stoves are highly likely to start fires, especially if not properly supervised. To make matters worse, you’ll be spending the money you save on heating on insurance since insurance companies will charge you more for the fire risk.

How to Save Money: By having safety measures like routine maintenance by a licensed technician, smoke alarms in the house, and fire extinguishers available, you can keep insurance costs lower.

8. Oil-based heating-

Having oil-based heating (more common in older houses) can skyrocket your premiums and complicate getting insurance because the oil tank is a major fire hazard that can cause extensive environmental damage. Not only are forced-air furnaces and electric heat pumps safer, they will also lower your premiums.

9. In-home business, especially if you have inventory-

Having people coming in and out of your home (like with an accounting form, bed and breakfast, daycare, or other home-based business) means higher insurance premiums because the exposure of more people increases the risk of someone being injured on your property. You’ll also have higher premiums with inventory in the home (as in with a craft or other business with online sales) because both personal and business property are at risk of damage or theft in the case of a break-in.

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10. Your roof –

Roofing can also affect your insurance premiums. While shingles and wood shakes make your home’s exterior stunning and unique, they are more prone to rot, mold, weather hazards, and fires, so your premiums will increase; having an older or damaged roof can make your premiums even higher. To reduce costs, have a roof that best fits your location, especially if you are in an area that experiences hurricanes.

11. Finished basement-

Even though having a finished basement can increase your square footage, it will also increase your insurance costs because it is more likely to be damaged if there is a flood, leak, or sewage backup.

Dogs- Your dog can also increase your insurance premiums since you will be liable if someone is attacked by your dog in or near your home, especially if you have an aggressive dog breed like a Pit bull or Rottweiler. You should get training classes for your dog to prevent aggressive behavior and save yourself the risk and worry of liability.