Insurance companies look at all aspects of a home to assess risk and determine the premium that they will charge. For example, they look at the location to see how close you are to a fire hydrant and whether you live in a high-crime neighborhood. If you live in a hurricane-prone area of the country, that can affect your rates. One of the most obvious factors that will influence the amount of premium you pay is the type of building materials used to construct your house.
The following are 6 ways building materials can impact your policy rate.
- Replacement Cost – More expensive materials cost more to replace and can raise the premium you pay
- Custom Features – If you have crown molding, expensive wooden doors, custom kitchen cabinets or a fancy wood deck, you may pay more because the replacement cost to put your house back in the same condition it was in can be high.
- Wood Frame Houses – Although they can be just as sturdy as concrete or brick, in the event of a fire, wood is much more susceptible to destruction. This may or may not raise your rates.
- Roofing – Having an old roof makes it more likely to need repair or replacement. Newer roofing materials tend to last longer and perform better so insurance companies assess them with a lower risk score than an old shingle roof.
- Electrical Wiring – If you live in an old house and your wiring is not up to code, chances of an electrical fire increase. The need to replace a home’s wiring so that it is up to code can add to the price of your homeowners insurance policy.
- Plumbing – Just like wiring, old plumbing is more likely to fail and possible cause serious water damage. Insurance companies take note and adjust the premium to reflect the added risk.