What Factors Influence How Much Homeowner’s Insurance Will Cost?

Posted in Home Insurance

Homeowner’s insurance is a smart idea if you own a home, and you’re looking to protect your investment. The purpose of coverage is to protect you financially in the event of a loss.

The good news is, there are many different factors that go into creating the perfect policy in Colorado—and just as many that help determine how much you will have to pay. Here are some of the top factors that can impact your homeowner’s insurance cost. 

Colorado Coverage Type and Limits

The type of coverage and specific limit amounts you choose influence the price of your policy in Colorado. In addition to the basics, you have the option of adding coverage to fit your needs, such as protection for structures besides your home, like a storage shed or boathouse.

If you add coverage for personal property and medical expenses, your premium will increase. Of course, with all coverage, policy coverage limits play a role in determining how much you pay. 

Location in Colorado

Where your home is located in Colorado can influence your premium too. Local considerations—how far you are from the nearest fire station, or if your neighborhood is prone to theft—can greatly increase or decrease your cost.

At the national level, if you live in an area where natural disaster is common, your insurance is likely to be more expensive. For instance, Florida homeowners face higher risk from hurricane damage than homeowners in New York. 

Condition of Your Home, Building Materials and Age

The age of your home, type of structure and how well it has been maintained impact your insurance premium. In general, older homes in Colorado cost more to insure, with prices varying based on materials used. For example, a brick home would likely cost less to insure than a home made from wood, or synthetic materials.

Protective Devices

Any protective devices in your home that are designed to decrease risk of loss or damage can reduce your monthly premium. Smoke detectors, burglar alarms, indoor sprinkler systems and deadbolt locking systems usually lower your premium rate. 

Lifestyle Factors

While it is illegal for insurance companies in Colorado to refuse to sell you a policy because of an unflattering credit score, they can use it to decide if you are worthy of receiving a discount. However, some lifestyle choices, like not smoking in your home can affect your premium too. 

Claims History

As is the case with many insurance premiums, if you have filed claims in the past, your premium will likely be higher.

Deductible Amount

Generally speaking, the higher your deductible, the lower your premium will cost. Simply raising your deductible can significantly lower your monthly amount.

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