The Townsend Insurance Blog
Wondering how much you should be paying for homeowners’ insurance? In this article, we’ll explain what kind of prices you should expect in 2021 as well as some factors that can affect how much you should expect to pay for homeowners’ insurance.
Wisconsin Homeowners Insurance Prices to Expect in 2021
In 2020, Wisconsin homeowners paid an average of about $800 a year for their home insurance premiums compared to the national average of around $1450 per year. Just to give you an idea of how expensive home insurance can be, the most expensive states for homeowners in 2020 were Kansas, Oklahoma, Texas, and Nebraska where premiums were anywhere from $2,500 - $3500 per year. Home insurance rates will not only vary by state but by your city and zip code as well.
7 Factors That Can Affect How Much You Pay for Home Insurance
As just explained, your location plays a big part in how much your premium may cost you. In fact, did you know that insurance companies look at the ability to extinguish a fire when determining rates? This means your rates are determined by things like how far the house is from the nearest fire hydrant and the nearest fire station. Generally, the more rural you go, the higher you will you have to pay for home insurance because you will most likely be further away from a fire hydrant or fire station.
Generally, as a home gets older and older more considerations have to be made to determine a rate. Older homes built in the 1900s can be more expensive to rebuild, compared to a newer home, in the event of a catastrophic loss. Even if a home is considered new, poor maintenance by the previous homeowner can also cause the new buyer a host of issues. In addition, newer homes often get a new home discount that can help the rate quite a bit. There are many additional factors in relation to the age of the home that can come into play beyond just these few.
The larger and more square footage a house has the more expensive it will be to rebuild it. This means you will most likely have to pay more for home insurance.
It’s important to understand that how much you paid for your home shouldn’t be a concern in terms of determining how much coverage to buy. Rather than considering the price you paid, consider the features and details of the home to help determine what it would cost to rebuild it. A house on one side of the street with a panoramic ocean view will have a purchase price to reflect that. If that same house is put on the other side of the street with no view it will still cost the same amount to rebuild it.
What structure was your home built on? Do you have a wood stove in your home? What material is your roof? Obviously, brick and stone are materials that are more fire-resistant than wood which means if your home is primarily built on a wood framed structure or has a wood burning stove, you should expect to see a higher insurance premium. Some insurance carriers don’t consider wood stoves to be a risk. Others may even give you a better rate if you purchase a fire extinguisher, add smoke detectors to your kitchen, and have your stove routinely checked by a professional. Be aware that homes with wood, vinyl, and aluminum siding tend to be on the more expensive side when it comes to home insurance premiums.
If you’ve had a claim on a previous home or even renters’ insurance policy in the past 3 years, it might affect how much you pay for insurance. Buying a new home? Know that claims follow the homeowner, not the house. So, if the previous owner had a claim, it might show up in the claims history report, but it should not affect your insurance rate.
Almost all insurance policies are unique. While some are similar, there are lots of variables that can make them extremely different. For example, you might have certain collectible items, such as a wine, art or gun collection, or items you’d like additional protection on such as a wedding ring or other jewelry. The point is, there are different coverages that ensure these types of items and may be of interest to you depending on your needs. Just know that the amount of individual coverage limits you decide to select will pay a significant role in how much your homeowners’ insurance policy will cost.
Credit Based Insurance Scoring
You’ve probably asked this questions yourself before - Does your credit rating impact your insurance rates? The answer is yes, but your credit is just one of many factors that is part of what many insurance companies use called an “insurance score” system. While many are often surprised to learn this, the practice of credit-based insurance scoring actually dates way back to the early 90’s when studies conducted by FICO showed that there is a correlation between a person’s credit score and how likely it is that person will file an insurance claim. Another factor in this insurance score system is how long you’ve stayed with your insurance company over time. There are additional factors as well, but it isn’t data that is shared with too many people outside of the company and the insurance commissioner.
These factors are all very important things to consider and be aware of, but they are just a few of many other elements that can impact the price you pay for a home insurance policy. Have any additional questions or concerns? Give us a call or send us an email! We’re happy to help with all of your insurance needs.
How Much Should I Pay for Home Insurance?
Determining how much you should expect to pay for home insurance can be difficult and daunting. You’re also most likely wondering – What will happen if I need to file a claim? How fast is claim response? Do I have enough coverage? Do I even have the right coverage? These are all quite common worries that might flash in your mind.
As an independent insurance agency, Townsend Insurance is here to help guide you through the process of finding you the coverage that fits your needs at a fair and competitive price. If you’re looking to purchase home insurance right here in Wisconsin, we’d be happy to set up a home insurance policy for you. Our services will not only save you valuable time and energy, but we can answer all of your specific “what if” questions as well. Give us a call today!