How Your Home's Structure Affects Your Home Insurance Rates

Dwelling coverage forms the biggest portion of home insurance. Other forms of coverage are fractions of dwelling coverage. As such, your dwelling also has the biggest influence on your home insurance rates. Below is an overview of how different parts of your dwelling affect your home insurance rates. 

Size 

Your dwelling coverage should be enough to rebuild your home. Builders calculate home construction costs per square footage. Available data shows construction costs to be $100 to $200 per square foot. A bigger house will cost more to rebuild than a smaller house. Thus, big homes cost more to insure than in small homes. 

Materials 

The type of material also affects building cost, and by extension, insurance costs. For example, steel frames cost more than wood frames. If a fire outbreak damages your steel-framed house, you expect the insurance company to rebuild your house with steel. Thus, your insurance premiums must reflect steel rates. 

Age 

Old houses are more risk-prone than their newer counterparts are. Here are some risks that are more likely in old houses than new houses: 

• Leakages from plumbing systems 
• Fire or damage from electrical systems 
• Roof leakages 

Insurance companies are risk-averse since it costs them money. Thus, you can save money on insurance costs if your house is relatively new. 

Design 

The architecture or design of a house determines how easy it is to build. The ease of construction affects labor charges, which affect insurance rates. For example, a simple house with four corners is cheaper to build than a complicated house with multiple angles. 

Susceptibility to Natural Disasters 

Your house should have the ability to withstand natural disasters for you to enjoy reasonable insurance rates. For example, your house should: 

• Have fire-resistant or fireproof materials resistant materials 
• Have a wind-resistant roof 
• Have an impact-resistant roof 

Note that both material and design affect resistance to natural disasters. 

Number of Rooms 

The numbers of rooms affect both labor and material costs. The number of rooms also affects plumbing, electrical wiring, heating, and cooling installations. All those things affect rebuilding costs. Thus, even with comparable square footage, a five-bedroom house is likely to be costlier than a three-bedroom house. 

Attached Structures 

In case of a disaster, the insurance compensation will include the attached structures. Thus, if you have an attached garage or toolshed, your rates will likely be higher than they would without the attachments. 

Special Features 

Some houses come with special features that affect their reconstruction costs. Examples of such special features include: 

• Smart home technology 
• Indoor swimming pool 
• Green or living roofs 
• Wood stoves 

Again, you expect your dwelling coverage to replace or repair these special features in case of damage. Thus, your rates must reflect the protection. Some of these special features increase the risk of damages or accidents. For example, wood-burning stoves carry high risks of fire. 

Building Code 

Lastly, the insurance company also needs to know whether your home is up to code. The issue of code compliance is critical since you will have to update your building to the latest code in case a disaster strikes, and you have to rebuild the house. In such a case, you expect your insurance company to foot the bill for the code update – if you have the coverage (building code coverage is not automatic). 

Hopefully, your home's structure will allow you reasonable insurance rates. Talk to an experienced insurance agent for advice on how to maintain inexpensive coverage. Illinois Insurance Center Inc. has been active in the insurance industry for over 40 years. Contact us to discuss your insurance needs, and we will help you get the appropriate coverage at reasonable rates.