What should be the main deciding factors for homeowners in an insurance policy

Homeowners’ insurance has now become a necessity. It helps you throughout and protects your home not just against damage or theft but also in coverage for the full fair value of a property. Home is one of the most expensive investments one can do and that is the main reason you should do everything in your power to protect it. The best way you can do that is by getting it insured. Here are various factors that impact the insurance policy of your home. Some of such deciding factors are as follows.

Area the house is in

This is one of the first factors that affect the homeowner’s insurance policy. The location of your house plays a vital role in determining what type of policy will be best suitable for you. For instance, if your house is situated near the seashore, the policy must include the risk of flooding and so on. The area determines environmental risks which your house might be susceptible to including flood, earthquake, and so on. A neighborhood that has consistently a higher crime rate will have to include security measures along with a damage control clause in case of any theft, burglary, arson, and such factors.

Property Age and Characteristics

The age of your property also plays a significant role in the homeowners’ insurance policy. The older the property, the more damage it is prone to have. For instance, if your electrical wiring is old, there could be fire damage due to the short circuit and could cost expensive repairs for the house and in many cases will have to rebuild the house from scratch. In these cases, the insurance providers may charge high for the insurance as the older houses are at higher risk of damage. Similarly, other characteristics of the house also play a critical role in determining the insurance. These may include garages, swimming pools, clubhouses, and even internal heating and cooling systems. They are more likely to increase the overall rate of home insurance policies. But options are plenty and there are loads of companies which could offer you instant homeowners insurance quotes—and quite obviously, you can choose the option that is tailored to your unique needs.

Replacement value and Claim deduction

Replacement value factors to the insurer to make the payout which would be effective to replace damaged items which are new items. In some options, the insurer could make the payout after the deduction of the depreciation. You can also go for higher deductibles at the time of investing or renewing the insurance policy which will result in a lower rate for the homeowner’s insurance policy. While doing so, keep in mind the long-term financial planning to avoid further hassle. Make sure that the deductible is higher than you can pay on short notice.

Personal Factors

All the homeowners come with their financial history and situation that might affect their risk. The value of your personal belongings affects your homeowner’s insurance policy. Make sure you take necessary precautions to protect the items and belongings to lower the risks associated with the insurance, that way you can reduce the house insurance cost. Making sure that you have a CCTV camera installed in your home along with security alarms and motion detectors will be the best defense against theft and burglaries. This will also help you reduce the cost of the homeowners’ insurance policy regarding personal safety. Along with these make sure the house has smoke detectors, fire extinguishers, sprinklers, and such which will further play their role in deciding the best suitable insurance policy for you.

Construction Cost

The rate of construction as ‘per square feet’ regulates in deciding the insurance policy. The materials used in the construction of the house are the main deciding factor of the cost of construction which then decides the policy. For instance, if a low-cost material is used to build the house, then the rate of the homeowner’s insurance will be on the lower side but that material will also affect the property’s longevity.


Investing in a home is anyways a big investment, but you can’t just sit back after buying the property. There is a whole lot of effort and cost required to make your house a perfect place to live in which also includes the factor of homeowner’s insurance. Do not be thrifty while choosing the policy for your house. Keep in mind all the factors including the purchase which will work best for your house and then make the deal. Even though your heart goes towards the cheaper rate of the policy, make sure that the protection is your utmost priority otherwise you would be putting your property at risk.

Charles Bains

Charles Bains

Charles Bains started his insurance career as a marketing intern before pounding the pavement as a commercial lines agent in Orlando, FL. As an industry journalist, his articles have appeared in a variety of trade publications. His insurance television career, short-lived but glorious, once saw him serve as the expert adviser on an insurance-themed infomercial (yes, you read that correctly). Having recently worked for various organizations, coupled with his broader insurance knowledge, Charles is able to understand our client’s needs and guide them accordingly. He is a gem for Insurance Noon as his wide area of expertise and experience have been beneficial in conducting further researches to come up with solutions and writing them in a manner which is easy for everyone including beginners to comprehend.