hoj. Home Insurance. January 04th , 2018.
Probably the last thing you are thinking of when you are in the market to buy a new house is the potential cost of homeowners insurance. But, it is something that you should keep in the back of your mind as you begin house hunting.
There are several aspects to your home that can affect the insurance rates. In general, your homeowners insurance will rise based on the risk of personal injury on the property by occupants or neighbors. Below are some of the major reasons that home insurance premiums to increase.
1. Swimming Pools
Swimming pools are a major reason why the cost of home insurance increases. Pools are considered a very high risk amenity because there is obviously the risk of drowning. Many insurers recommend or require that you install a fence to prevent children from going in the pool unattended. Additionally, since pools are an expensive addition in and of themselves, the insurers will increase the premiums to cover the value of the pool in case it is ever damaged in a storm.
Trampolines are the cause of almost 100,000 injuries every year. As a result, many insurers will increase premiums if they know that you have a trampoline on the property. You should note that it is important to notify your insurer if you install a trampoline, even if it is a temporary feature. Since it is an item that significantly increases the risk of personal injury to homeowners and visitors, insurers will likely increase premiums. Additionally, some carriers do not even include trampolines under the homeowners policy.
3. Waterfront Location
The old mantra for real estate is: Location, location, location. As such, many buyers look for beautiful views in their home search. Many love waterfront spaces or water views. But, these beautiful locations come at a price. Beyond the higher list price of the house, there are higher premiums for home insurance.
The waterfront location increases the risk of flooding, increasing the risk of loss. Notably, some insurers do not cover flood-related damage, instead, they only cover water damage from events not directly related to flooding. It is often advisable to establish a separate flood insurance policy to protect against flood-related damage.
4. Older Homes
Some people love the character and details of historic homes. However, the most expensive parts of a home are ones that can often break down over time. These key parts can be the HVAC system, plumbing, and even the electrical systems. All of these can be very expensive and can drive up insurance premiums as a result. According to the Insurance Information Institute, claims for big ticket items like these can range around $40,000 if major systems fail.
5. Simple Size of the House
Of course, the size of a house drives up both the list price and as a result, the premiums of home insurance. Many insurers use a sliding scale based on the total square footage of the home to determine the cost of the insurance.
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