Homeowners insurance provides protection for your home and offers peace of mind. Purchasing a house is not only a significant financial commitment, it’s also a requirement by your mortgage lender to protect their asset.
However, the process of obtaining homeowners insurance can sometimes feel complex. To understand how to estimate homeowners insurance and what goes into a homeowners insurance quote, read on.
How Is a Homeowners Insurance Quote Calculated?
At its core, homeowners insurance covers the repair or rebuilding of your home if it is damaged or destroyed by a “covered peril.” These are events listed in your policy that would be covered by a claim, such as fire or smoke damage. Therefore, one of the primary considerations for an insurer when providing a quote is the cost of rebuilding.
Factors such as square footage, construction costs in the region, and specific details and materials used in the home contribute to the premium quote. Regional weather events, like severe weather in the Great Plains states or the increased risk of hurricanes and floods in coastal areas, also influence the quote.
What Information Is Needed for a Homeowners Insurance Quote?
When seeking a homeowners insurance quote, be prepared to answer several questions that contribute to the calculation. These may include:
- Age of your home and when it was built
- Age of the roof
- Location of the house
- Occupants of the house (including pets)
- Square footage of the home
- Claims history and prior insurance claims
- Estimated rebuilding cost of your home (not the purchase price)
- Home style (colonial, single-story ranch, etc.)
- Details about features like bathrooms, fireplace, and flooring
- Information on any changes, upgrades, or remodeling done to the home
- Presence of safety features like alarm systems or sprinklers, and smart home technology
As you can see, there are various questions to answer, so being prepared in advance will help speed up the process.
Are Renovations and Repairs Considered in a Homeowners Insurance Quote?
Yes, renovations and repairs do impact your home’s value and are included in the calculation of your homeowners insurance quote. Minor repairs generally fall under home maintenance and may not need to be specifically listed.
However, if you have made significant upgrades like roof replacement, installation of an electric heat pump, HVAC updates, or kitchen renovations, these improvements should be included in the calculation of your home’s replacement cost to ensure accurate homeowners insurance costs.
Is the Current Condition of My Home Considered in an Insurance Quote?
The condition of your home might be a factor, especially if it is more than 25 years old or has not been inspected recently. The level of care and maintenance given to a home can impact its resilience against storms and other weather events.
If your home is older or hasn’t had an inspection in a while, the prospective insurer may request a home inspection before issuing a homeowners insurance policy. This inspection assesses the condition of the home, major systems like furnace and plumbing, and the overall roof condition. It helps identify potential risks and liability issues.
What Other Factors Affect Homeowners Insurance?
Other factors that can influence homeowners insurance calculations include external structures such as detached garages or sheds, recreational items like pools and trampolines that may pose liability risks, and the type and amount of coverage selected, including the deductible.
Additionally, it’s worth mentioning the significance of pets, particularly dogs. Inform your insurer if you have one, as dog bites can be a liability concern. If you’re concerned about increased rates, inquire if there are discounts available if your dog successfully completes a Canine Good Citizen Course.
Where Can I Get a Homeowners Insurance Quote?
Getting insurance might feel like a complicated process- but it doesn’t have to be. Talk to the experts at Guaranteed Rate Insurance. They are here to help you estimate the cost of homeowners insurance and find the right policy that suits your needs.
Disclaimer:
*Savings, if any, vary based on the consumer’s profile and other factors. Contact your insurance agent for more information. Restrictions apply.
All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate Insurance does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Guaranteed Rate Insurance. Guaranteed Rate Insurance, its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.
