Homeowner’s insurance is one of those necessary evils of buying a home. On one hand, if you are getting a mortgage, your lender will require you to have homeowner’s insurance and on the other, it’s like wearing a seatbelt every time you drive. The reality is that most of us will likely not experience a house fire or catastrophic event; however, severe weather, storms, and unthinkable things still happen.
If you’ve ever shopped around for homeowner’s insurance, then you’re likely to see a spread of different premiums, but do you know what factors are driving up your homeowner’s insurance? Is there anything you can do to reduce your premiums? Let’s look at that today.
Age of Your Home
One thing you can’t particularly control is the age of your home, but unfortunately, it happens to be one of the things that affect your homeowner’s insurance premium. Older homes, especially those built on pier and beam foundations, are more susceptible to fire and severe storm damage than those built on concrete foundations with brick.
Additionally, older homes will likely have structural issues over time where newer ones may not. All said, if you’re looking to lower your insurance premium, you might want to consider a newer or updated home.
Location
Probably one of the biggest factors affecting homeowner’s insurance premiums is the location of your home. Needless to say, homes located in portions of the country that tend to experience severe weather events such as tornadoes, hurricanes, and floods will naturally see higher premiums.
Areas of high crime and break-ins will also likely see higher insurance premiums especially if these events occur regularly within a neighborhood. Adding surveillance cameras and working with your insurer may help lower that risk.
Finally, insurers are always interested in how quickly emergency responders can reach a dwelling in the event of a fire or other disaster. Therefore, the further away you are from police and fire stations, the higher you can expect your premium to be.
Swimming Pools, Hot Tubs, and Trampolines
Sometimes one of the biggest deterrents in purchasing a home is a built-in swimming pool or hot tub. Swimming pools and hot tubs are generally considered high-risk and high-liability by insurers and you can bet that having one will increase your insurance costs. As a matter of fact, for budget-minded homebuyers, having a permanent swimming pool can blow their budget quickly.
Another big insurance driver is trampolines. While trampolines can always be added after a buyer moves in, it’s best to disclose that you have one to your insurance company. In the event that an injury occurs from a trampoline and your insurer wasn’t aware that you had one, you could be looking at major premium hikes or a claim not being accepted.
In any of these cases, it’s best to be proactive with your insurer and see if there are ways you can lower your premium by adding safety features to any of the features mentioned above. In this case, it’s always better to ask for permission than ask for forgiveness.
Understand Your Morgage and Escrow
If you’re looking to buy a house, then it’s worth looking into exactly what you’re paying both in terms of your mortgage principal as well as the escrow that comes with your monthly payment. In short, escrow is the monthly bit of money your lender collects in order to pay your homeowner’s insurance and property taxes. Knowing what those premiums will likely be can help you budget your new home purchase.
Your lender should also be able to help as they have lots of experience working with buyers from all over–just like the loan experts at Tidewater Mortgage Services, Inc. Give Tidewater a call today!
