Does the age of your home affect home insurance costs?Posted on Jul 10, 2015
Are you considering buying an older home? Perhaps it is the classic structure of a home built several years ago that attracts you. Maybe you are drawn to the charm of an eclectic neighborhood right in the middle of your city or town. However, when looking at these older homes, you should not expect older home living to be repair or renovation free.
You have probably already set aside room in your budget, or built renovation costs into your mortgage. If you’re the do-it-yourself type, maybe these renovations are an adventure, not a hassle to be dealt with. Or maybe knowing the demand for older homes continues to increase, while the availability decreases, is incentive enough for working with outdated electric and plumbing systems.
You’ve prepared yourself for the added upkeep associated with owning an older home, but have you taken into account that owning an older home can influence your home insurance premiums? In some cases the age and structural characteristics of an older home may be reason for a higher premium.
Why does the age of my home affect my home insurance costs?
There are certain aspects of owning an older home which may increase the cost of your monthly home insurance premium. Older homes often have more structural problems than newly built homes.
Additionally, an older home may have problems most newer homes don’t. Older homes are more likely to need plumbing repairs, to have issues with electrical wiring, and to have problems with the roof and foundation. Because insurance companies see older homes as greater risks for filing a claim, they raise the premiums to prepare for the cost of the potential claims.
Homes built with flame-resistant materials have the advantage on other homes when it comes to keeping insurance premiums low. Homes built with stone, concrete, or brick are much more resistant to fire than homes built with wood and siding.
Reducing Homeowners Insurance Premiums
There may be ways you can reduce the insurance premium of your older home. Here are a few things to keep in mind when you are looking for a house and shopping for insurance:
- Coverage: Choices you make concerning how much coverage you would like and how low your deductibles will be can affect the cost of your monthly premiums. Choosing a higher deductible plan with minimum coverage can really cut back on your monthly costs, but you may find yourself spending a lot if you have to file a claim.
- Location: When purchasing your home, it is important to keep location in mind. Higher premiums are common in flood and earthquake prone locations and high-crime neighborhoods. Some insurance companies may even take into account the number of claims filed for the homes surrounding you.
- History of Claims: If you have filed multiple claims on your home, chances are you will see your monthly premium cost go up. To avoid this, don’t file a claim unless absolutely necessary.
- Credit Score: Individuals with bad credit as well as smokers may notice they have higher premiums. Avoiding a high debt to income ratio and always pay your bills on time to keep your credit score healthy.
- Insurance Provider: By working with an independent insurance agency who can objectively compare different insurance carriers, you may find that insurance coverage of equal value may vary in monthly premium cost.
Whether you are looking into buying an older home, or you have owned an older home for years, spend time shopping around and comparing home insurance plans. Be sure you are choosing a plan that is not only affordable, but also takes into consideration the added insurance needs of an older home.