Shopping for a House? These Features Can Make Home Insurance More Expensive
There are some well-loved home features that can make home insurance more expensive, like swimming pools, finished basements, and landscaping. Older homes will increase your rates as they often have outdated electrical systems and custom work. Before buying a home it's important to know the factors that increase home insurance rates. Read our guide below and compare home insurance quotes for free to save as much money as possible on your homeowners insurance.
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UPDATED: Nov 6, 2020
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When shopping for a new home, you may not consider the ways that the factors that most attract you to a particular home are also the ones that can drive your homeowners’ insurance premiums up. After all, most people aren’t thinking about how much insurance is going to cost when they make an offer on a home.
If you’re the type of person who wants a pool or wants a classical but older home, there may be little you can do to avoid these higher rates. But knowing all of the factors that increase home insurance rates could make some homes a little less attractive. It can also make you think twice about making any home improvements that could increase premiums.
Here are some of the most popular features that increase home insurance costs:
A finished basement adds more liveable square footage to the home, but it also stands a higher chance of getting damaged in the case of a flood. Even if the basement is not likely to flood from natural causes, a burst pipe or backed up sewage could damage this area.
Pools are a great way to relax and cool off in the summer sun, but they are also a big liability. Not only is there a higher chance that someone in your own family could become injured, but pools tend to attract a crowd, adding further liability. Fun extras like a diving board or slide could mean even higher insurance premiums, but safety fences and alarm systems might help keep costs down.
Similar to a pool, a hot tub can make you more vulnerable to lawsuits and are many times considered a liability by insurance companies. Additionally, the value of the hot tub can increase the coverage you need for your home which would lead to higher rates.
Many older homes were built with an oil heating system and some people prefer this to forced air heat. Insurance companies aren’t fans, though. If you’ve got an oil tank on your property, you have a large amount of a highly flammable substance. A leaking tank could also mean big environmental damage. Converting to a different style will lower premiums.
Certain homes are located in flood zones because they are near areas that could quickly become flooded. It’s a big risk. Some insurance companies will refuse to insure homes that are in a flood zone or may specifically exclude flood damage from the policy. Flood insurance is a costly add-on.
A sump pump can actaully help protect your home from flooding but it is typically advised that you should add a sump pump failure rider or endorsement to your homeowners coverage in the event that your sump pump fails.
Distance from Emergency Services
A house in the country may give you the peace and quiet you’re after, but it does have at least one negative factor & the distance from emergency services. If your home catches on fire and the fire department is several miles away, they could be too late by the time they get to your home. Insurance companies recognize this and charge you extra for the possibility that they may have to pay for more extensive damages.
Outdated Electrical Systems
Older homes have older electrical systems. Not only are these wires more likely to cause a fire, but they’re also not always able to handle the amount of electricity the average homeowner uses these days. If you’re looking at a home with an outdated electrical system, consider having it updated. It will reduce your insurance costs and make your home a lot safer.
Wooden Shake Roof
Wooden shakes give a home a unique look that many homeowners find attractive. If kept in good condition, they can last longer than other styles of roof. Unfortunately, they’re also more prone to damage from wood rot or mold and will not resist fire. Expect to pay more for your insurance if the home has this type of roof.
Intricately carved banisters or specially designed cabinets may be a big draw to a particular home. Unfortunately, the insurance company will see only things that are incredibly expensive to replace. If the fixtures in your home can’t be easily bought by a local contractor, expect to pay a bit more if you want things replaced as they are.
A beautifully landscaped property takes a lot of time and money to maintain. Insurance policies will generally cover some of the home’s landscaping, but it may not cover it all. For instance, old trees simply can’t be replaced. Be sure to ask the insurance agent about what types of landscaping elements the policy will cover.
Galvanized or Lead Piping
Found in older homes, galvanized or lead piping is more corrosive and more likely to leak. This higher potential for water damage means higher premiums. You could probably mitigate some this effect by replacing the pipes with more modern versions.
Older homes have a lot of character & and a lot of elements that are difficult to replace in modern society. From wider floor boards to period door knobs, the cost to re-create the look of an older home can be significantly more expensive. Some companies won’t even offer policies on this type of home.
Though it’s not always something that’s in your control, the material a home is made from can have an effect on the cost of insurance. Homes with wooden frames are more likely to burn if there’s a fire, so they will cost more to insure. A brick or concrete home could be less.
Fireplaces or Wood Burning Stoves
Even though you may intend to use your fireplace or wood burning stove correctly, simply having a fire means that there are more chances for damage. If the house has either of these features, you may be saving money on heating, but spending more on insurance.
A home that isn’t well-maintained can be at greater risk for damages. If the assessor notices an older roof with shingles curling at the edges or parts of the home that seem to have structural damage, you’ll find that your insurance rates start to go up. Making necessary repairs can easily fix this problem.
A bigger home isn’t always better, especially when it means higher insurance costs. When looking at a home, you want to be sure that it makes good use of the space it has. Sometimes, a home that’s 1,500 square feet can seem bigger than a 2,000 square foot home and it will be a lot less expensive to insure.
While you may not consider a deck as livable space, an insurance company will take it into account when determining the cost to rebuild, repair or replace your deck in the even of a claim. The additional coverage you need for a deck will add to your monthly premium.
Age of Home
Older homes often have more problems than newer ones, even if they’ve been well maintained. Things are just more likely to wear out. Insurance companies make up for this by charging those with older homes more.
Area of Country
If you live in an area of the country that has a greater chance of experiencing a natural disaster, expect to pay more money for insurance. This is true with you live along the San Andreas fault line or Tornado Alley. Harsh weather means more insurance claims.
Surprisingly, insurance companies share information about how many claims have been filed on a particular home through the Comprehensive Loss Underwriting Exchange (CLUE). Even if these claims were filed by the previous owner, it could mean that you end up paying more than you would for a different home.
Homes that are in neighborhoods that experience more claims, particularly due to theft, will face higher premiums. You might go into a home knowing that there’s a high theft rate in the area, but a good neighborhood could suddenly start to see a rash of break-ins. Home alarm systems can make a difference in insurance costs.
Other Items to Consider
Additionally, there may be some features that don’t come with the home, but you bring with you. These items may be more within your control, but can also increase what you pay for homeowners insurance.
If you do business on your property, you probably have more at stake. Whether you’re running an in-home daycare or an accounting business, having extra people coming in and out of your home means that there’s a greater chance someone could become injured. A separate policy for your business may be necessary.
Even if you’re not running a business that has customers coming to your home, you could still face higher premiums if you keep any of your business’ inventory on the property. For instance, if you have a craft business, you’ll want to be sure that all of your supplies could be replaced if they are stolen or damaged.
Trampolines and Fun Kid Stuff
Trampolines cause thousands of injuries each year, and if a neighborhood kid gets hurt on your trampoline, you could be facing increased premiums. Trampolines aren’t the only dangerous things, either. Large play structures, skate ramps, or other such things can also be expensive to insure.
Whether you have grandma’s jewelry collection stashed away or like to buy your wife a new piece of jewelry each anniversary, having a lot of expensive jewelry in the home can increase the homeowners’ insurance premiums.
Fine Art and Antiques
Your art or antique collection may be irreplaceable in your mind, but it’s difficult to replace in reality as well. This makes it hard for an insurance company to be willing to insure it. Look for even higher rates if you own original works of art or extremely rare antiques.
Unfortunately, man’s best friend isn’t always the insurance company’s best friend. You’re liable for damages if the dog attacks a visitor or a passerby. This is especially true if you have a dog that’s from a breed considered aggressive, such as pit bulls or Rottweilers.
None of these factors should necessarily discourage you from purchasing a particular home or making a change that you really want, but they’re definitely things to consider. Having an upfront discussion with your insurance agent can help you find the ways that you could potentially lower your payments.