When buying a home, insurance is one of the last items you think about. That’s understandable as it’s probably the least glamorous part of the home buying process. However, there are some things to keep in mind when buying your home that can help keep your insurance prices lower.
Recently we had a couple move to the central part of Phoenix. They bought a home about 50 years old made with block construction. They moved from an 18 year old home made of frame construction in East Mesa. Both homes were about the same size and cost but the premium for their insurance almost doubled. Of course they immediately asked, “Why?”
Here are four key items to keep in mind when buying a home that will influence your home insurance rates.
When building a home a block home is more expensive to replace than a frame stucco home. Their insurance policy had a slightly higher replacement cost because of this. This is obvious because it takes more time and materiel to piece together slump blocks than it would to hammer some nails into 2x4s and throw up some Styrofoam and stucco.
Newer is better. That’s a matter of opinion for many things but insurance companies give discounts for newer homes that are built into the policy. A newer home has newer wiring, heating & cooling, and other important safety features. It’s less likely to have a claims from an older feature built into the home and has been wearing down for 40 years.
Location, location, location. Yes, location plays a factor in pricing of your insurance. One of the big factors in pricing is the zip code you live in. If there was a microburst in your zip code last year which ripped the roof off 50% of the homes, chance are the insurance in that zip code will be much more expensive than in the zip code across the street. Also, does the area have higher crime and vandalism rates than other areas you’re looking at? Again, more claims possibilities.
How does your credit look? While it may not seem fair, your credit history has an enormous impact on insurance rates today. Insurance companies have been tracking this for years and have demonstrated credit scores relate to claim making. The better credit and more ‘financially stable’ you prove to be the more likely you’ll pay your insurance bill and the less likely you’ll file a claim. I’m not going to argue if it’s right or wrong however the longer I’m in the business the more I’m finding it to be true.
Ultimately, my couple was happy with their decision to move. The price on the insurance isn’t generally a deal killer. They’re closer to work and other family members. They have schools for their kids they’re excited about and they love the charm of the home because it’s, “just like where we grew up.” I think you would agree this is more important to buying a home than worrying about the price of the insurance policy.
I didn’t tell you their car insurance went up almost 50% because of the new zip code too. That’s another story.
If you have any questions or concerns and would like a competitive quote on your insurance policies, don’t hesitate to contact me direct at 480.699.7222 or visit my site at www.InsuranceRenegade.com