Home insurance rates are subjectively determined. They are not neatly listed in a book, each ready to be pulled out and applied to a home. That is the first rule that a homeowner must understand when he is looking for a suitable rate on a policy to protect his home: His rate might differ substantially from his neighbor’s.
Home insurance rates vary greatly from state to state. Straight across the country, North Carolina’s average 12-month home insurance rate is $654, Oklahoma’s is $1,730, and California’s is $803, according to homeinsurance.com. The average premium is $853. The variation is wide and based somewhat on regional factors, including weather hazards, fire protection standards, and construction material and costs. Identical homes in different parts of the country will not have identical rates, just as the homes won’t have identical selling prices.
However, one needn’t travel across the country to find $600 annual home insurance rates and $800 annual rates. The varying rates can be in as close proximity as literally next door. That’s because important distinctions can be made between two houses in a neighborhood. One might be older than the other, and the age of a home is a consideration for an insurer. One might have a new roof and another one a potentially leaky one; insurers are concerned about what that means for a house structure and its contents.
Other variables includes whether the occupants of a home smoke—discarded cigarettes have started many a home blaze—and whether the house is constructed of brick or wood. Obviously, brick is less flammable. How close is the nearest fire department station? A crucial few minutes in response time can mean the difference between a partial loss and a total one. Also in the mix of a rate evaluation are a homeowner’s claims history and credit score.
Home insurance rates are a composite of many factors, in other words, some of which are evident, some of which are not. A larger house is going to have a more expensive rate than a smaller one, it stands to reason, but a larger home constructed of brick on a street a block from a fire station might have a lower rate than a somewhat smaller house located in a more perilous part of town. Buying a house and wondering what home insurance rate it might carry? Look at the house as an insurer does, and the rate will become self-evident.