Whether you've just moved out of state or are simply curious, you may be wondering why homeowners insurance premiums change
depending on where you live. From state to state, city to city, and even neighborhood to neighborhood, rates can fluctuate
for a number of reasons — let us explain some of the most common.
1. local construction costs
When purchasing homeowners insurance, you'll want to choose enough coverage to fully pay for the cost of rebuilding your
house from the ground up should catastrophe strike. So if local construction costs are higher or lower in the area you just
moved to, this will likely affect how much homeowners coverage you need to carry.
For example, if rebuilding costs are less expensive in your new area, you likely wouldn't need as much home insurance coverage
and you could see your premium go down. Construction costs are affected by things like the population density of your locale,
type of home you have, climate, availability of materials, and building regulations.
2. your home’s exposure to hazards
Whether you live in a coastal area, a location with higher burglary rates, or Tornado Alley, your home's exposure to perils
will typically affect how much your homeowners policy costs because of your increased likelihood of filing an insurance
claim. On the other hand, if you move to a city or state with a lower risk of theft, storm damage, or wildfires, for example,
you could see a significant decline in homeowners premiums.
3. building codes in your locality
Some state and local governments have enacted stricter building codes that can require the highest quality and most weather-resistant
materials — namely due to perils like hurricane winds, wildfires, or earthquakes and other land movement. If you live
in an older home and experience a catastrophe that levels your place, you could be forced to rebuild according to updated
building codes, which can be significantly more expensive.
4. your proximity to a fire station
When considering new locations, you may want to consider the neighborhood's proximity to a fire station. Not only does this
help keep you and your family safer, but it also reduces the fire department's response time, which can make a huge difference
in how much fire damage your home suffers. Generally, the closer you live to a fire station, the lower your homeowners insurance
premium will be since fire-related claims in your vicinity are typically not as costly.
5. state regulations
Your state insurance department regulates how insurers calculate homeowners premiums where you live. While some states allow
insurance companies to incorporate your credit score into your premium, for example, other states make it illegal. In addition,
the department of insurance does allow insurers to increase or decrease premiums, but controls the extent to which insurers
can do so (typically annually, at the most, and only by specific amounts based on actuarial information).
The truth is, though, many states don't need to increase insurance rates very often at all, unless there's a very specific
reason to do so — like a significant rise in the number of major storms affecting an area, or a spike in inflation
that would cause the cost of building materials and labor to go up.
other factors that can affect homeowners insurance premiums
Location, location, location — it's a big deal to both homeowners and home insurers alike, but it's certainly not the
only factor that matters. There are a number of other contributors that help determine your insurance premium, including:
- The type, age, and condition of your home
- Any attractive nuisances you have on your property, like a pool or trampoline
- Insurance history, including past claims
- Your insurance score, which, in some states, may include your credit score
- The breed of dog you have, if applicable
- Your home insurer's ability to take on risk
gain affordable, dependable protection for your home from esurance
No matter where you live, Esurance offers customizable homeowners policies that don't drain your bank account; so you can
tailor home coverage that feels right for you and your situation. Plus, we provide customer service, the financial strength
of an Allstate company, and cutting-edge online technology to help simplify the insurance process.
get your quick, free homeowners insurance quote online be sure to explore our selection of coverages that help financially
protect your abode, belongings, personal liability, and more. And while you're at it, check out our myriad discounts to
see how much you could start saving on reliable home insurance today. You can also give us a ring at
1-866-439-5633 where we're standing by to help you get a quote and answer any questions you may have.
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