What Affects the Cost of Homeowners Insurance?

Understanding the factors and what affects the cost of homeowners insurance can help first time home-buyers as well as experienced homeowners.  Experienced homeowners may have experienced claims already, but this list should also help first time home-buyers understand some of the exposures insurance companies need to consider when insuring a home.


Like auto insurance, the cost of homeowners coverage depends largely on where you live. Crime rates vary from community to community and so does the access to your local fire department, police department, and water supply. These other factors help determine the protection class.

Home Value

Along with the value of your house, the following factors determine the rates you pay for homeowner’s coverage.

Type of Construction:

Frame houses usually cost more to insure than brick.

Age of House:

New homes may qualify for discounts. Older homes may not qualify for preferred programs. Insurers may require older homes to have updated heating, plumbing, wiring and roofing.

Local Fire Protection:

Your home’s distance from a fire hydrant and the quality of your local fire department determine your fire protection class.

Amount of Coverage:

The amount of coverage you buy for your house, contents and personal liability will affect the price you pay.

Deductible Amount:

Your choice of a higher deductible will reduce the price for homeowners insurance.  Affording a larger deductible is something each person should consider individually, based upon their personal financial situation.   See our article about Deductibles.


Insurers offer lower prices for such things as insuring your home and car with the same company and installing deadbolt locks or alarm systems.


The more info you have the better.  Understanding the pricing factors will help you better understand what is driving your insurance costs.

Work with your agent or broker to better understand, why they are asking questions regarding the factors above.

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Arnold Smith

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