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Home » Property insurance » Factors That Affect Your Homeowners Insurance Rate

Have you ever wondered why your homeowner’s insurance rate is that high? Or why do other homeowners have lower premiums than you?

There are several factors that affect your homeowner’s insurance rate, which we’ll outline below. Your insurance company takes these factors into account in order to protect itself and to ensure that you have enough coverage.

Main factors that affect your home insurance premiums

Your insurance premium is the price of your home insurance policy. When you ask your insurance agent for a quote, they will take into consideration certain factors that may affect your rate, such as:

#1 Replacement cost

Replacement cost

The replacement cost is the amount it would take to rebuild your home in case it is destroyed in a covered peril, such as a tornado or fire. It is calculated by taking into account the home’s square footage, current construction costs, number of rooms, features, etc. So, if you have a luxury estate, your rate will likely be higher, considering that it is larger than normal.

#2 Credit score

Credit score

Being a landlord maintaining a good credit score is crucial, as it significantly impacts various aspects of financial well-being, including insurance rates. Insurers consider homeowners with low credit scores (below 670) as high-risk since there’s a chance that they’ll miss a payment. In addition, homeowners with low credit scores are more likely to file small claims than homeowners with above-average credit.

#3 Condition of the home

Condition of the home

Newly built homes are more expensive to insure. This is because they’re usually outfitted with brand-new appliances, electrical systems, smart home devices, and more. Replacing these in the event of a fire, hurricane, or another disaster will cost your insurance company a lot of money. In some cases, you may even have to raise your coverage limit. However, it’s important to be aware of disasters homeowners insurance won’t cover, such as floods or earthquakes, which may require additional policies.

#4 Deductible


By raising your deductible, you can lower your premium rates. Just be sure that you have enough savings to pay for your deductible in case you file a claim. For instance, if you file a claim for $5,000 and your deductible is $2,000, you’re going to have to pay for the $2,000 out-of-pocket.

Other factors that affect your home insurance rate

You’d be surprised at how many factors affect your home insurance premium rates. To the average homebuyer, they may seem insignificant, but to your insurance company, they can’t be overlooked. Here are surprising factors that can raise or lower your insurance rate:

#1 Distance from bodies of water

Distance from bodies of water

Do you own a waterfront home? Are you living closer to the coast? If you answered yes to either of those questions, your home is likely in a flood-prone area. As a result, your premium rates will increase. Your standard home insurance policy will cover you in the event of a flood, however, you may have to get additional flood insurance if you’re in a high-risk flood zone.

#2 Number of small claims filed

Number of small claims filed

Insurance companies are on the lookout for “frequent filers”. This is because frequently filing claims indicates that you’ll likely file more claims in the future. That’s why there are certain considerations you should avoid filing a home insurance claim. For instance, if you lost electronics valued at $500, instead of filing a claim for losses, replace your items using your savings instead.

#3 Distance from a fire station

Distance from a fire station

The closer your home is to a fire station (or even a fire hydrant), the lower your premiums are likely to be. Living near a fire station means that there’s a greater chance that the fire will be put out before your home is destroyed. Your insurance company will likely use the Fire Suppression Rating Schedule (FSRS) to rate your home according to its distance from the nearest fire station.

#4 Neighborhood


If you live in a neighborhood with a high crime rate, your insurance premiums will be higher than average. Your insurance company doesn’t want to risk losing money from claims for lost items, vandalized property, and so on. Similarly, if your neighborhood is prone to sewer backups, your rate will also be higher.

#5 Heating system used

Heating system used

Oil and wood-burning heating systems are a fire hazard — that’s one of the things that insurance companies hate. To keep your rates low, switch to electric heating systems. Remember, the safer your home is, the lower your premium rates will be.

#6 Dog breed

Dog breed

Your dog’s breed may impact your premium rates. Insurance companies will raise your rate simply because of the “bite risk” of your dog. They may even exclude certain dog breeds from your policy, such as Pitbulls, Rottweilers, German Shepherds, Doberman Pinschers, and Akitas. Keep in mind, however, that even if your dog isn’t an “aggressive” breed, its bite history may impact your rate.

#7 Nuisances


Nuisances are everything that is potentially dangerous — especially to children. These include swimming pools, treehouses, trampolines, fountains, wells, and more. Insurance companies raise your rates due to these nuisances because they increase the risk of injuries and accidents.

#8 Size of the house

Size of the house

If you live in a big house, you likely have more stuff than someone who lives in a standard single-family home. This means that it would cost your insurer more money to replace, repair, or rebuild your property and possessions in the event of a fire, flood, or other covered peril.

How to lower your premium rates

How to lower your premium rates

Every homeowner wants to lower their premium rates. If your quoted premium is higher than what you expected, here’s how you can lower them:

  • Raise your deductibles
  • Make your home safer by installing burglar alarms, smoke detectors, security cameras, etc.
  • Build a fence around nuisances such as swimming pools and trampolines
  • Stay on top of regular maintenance and repairs

Consider hiring a property manager

If there’s one thing that insurers like, it’s a risk-free home. One of the best ways to lower your homeowner’s insurance rate is by making sure that your home is safe year-round. Hiring property management services means that you’ll have peace of mind, knowing that your property is well-maintained.

Plus, our connections with South Florida’s top insurance companies allow us to negotiate better deals on your behalf. We’ll make sure your insurance policy covers everything that could possibly happen to your property.

Call us today at (561) 944 – 2992 or fill out our contact form to learn more.

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