Homeowners insurance: A basic guide to factors affecting premium cost

by Gema Smith 03/05/2023

Towhomes with text about insurance premiums

Purchasing homeowners insurance protects your home and assets in case of emergency. As premiums increase, you may wonder what affects insurance costs. There are several factors determining the cost of your homeowners insurance, and understanding them will help you choose the best coverage.

Geographic location

Geographic location plays a huge role in homeowners insurance costs. Areas inclined to certain natural disasters can see a spike in insurance price. Some natural occurrences are not covered under standard insurances. 

For example, you may live in an area prone to wildfires. Yes, fires are covered under standard insurance. However, if you live in a place where they often occur, insurance costs may rise. 

Home structure & condition 

The premium cost of your insurance may be higher depending on the condition of your home. Living in an older hold may signal repairs may be needed more frequently. Due to this reason, the homeowners insurance premium would be higher. 

Roof condition 

In addition to the overall home condition, the state of your roof is a large factor on insurance premiums. If the roof is older, it will need to be replaced sooner, and the cost of this replacement can be significant. If the home you purchase needs this replacement sooner, insurance premiums may rise. 

Home safety by location 

Many factors in your very own neighborhood can have an effect on the cost of your insurance. For example, you may live in an area prone to tornadoes. Due to this occurrence happening frequently, it can increase your insurance cost. 

However, if you live in an area less likely to be hit by large storms or other natural perils, your insurance premium may be lower. 


About the Author

Gema Smith

Gema S. Smith has been an influential pioneer in the luxury real estate industry for over 30 years. With a reputation for providing first-class service and garnering impeccable results for her clients, Gema’s accomplishments have earned her mentions in San Jose Magazine as well as two State of California Senate Certificates of Recognition.