When building a new custom home or shopping for a new home, there are many things to consider and to factor in as you make your decisions. One of the questions you are considering may be: Will building a new home result in higher insurance rates?
Factors That Change Insurance Costs
First, let’s discuss a few of the factors that are known to routinely impact insurance rates:
- Age of the house – Older homes often face hikes in insurance costs due to losses and risks caused by natural wear and tear over time. In addition, outdated features such as electrical systems and plumbing systems can also be more expensive to insure, and may necessitate replacement.
- Pets/animals – Homeowners with animals, particularly potentially violent animals such as certain breeds of dogs, often pay higher insurance rates.
- Size of the house – Larger homes have more expensive insurance costs.
- Features of the house – If your home has certain features such as an expensive siding or roof material, it costs more money to insure it. In addition, some features that are linked to higher rates of injury—such as swimming pools and trampolines—raise insurance rates.
- Miles from emergency services – If you are close to a fire station and/or a fire hydrant, you could see a discount in your insurance rates.
- Security features – Certain security features can reduce the amount you pay in insurance, such as an alarm system. Increasing your home security is a good way to reduce your insurance rates!
- Valuable possessions – If you own valuable items such as jewelry and art, it’s more expensive to insure the contents of your home.
- Outbuildings – Additional buildings on your property such as a barn, shop, or shed increase your insurance costs.
These are all among the factors that CAN affect your insurance rates. Other factors include the number of insurance claims you have made recently, your credit score, the dollar value of the property you are covering, and the various policies and incentive programs unique to your insurance company.
Generally speaking, insurance on older homes is more expensive and more difficult. However, the above listed factors—among others—can impact the cost of the insurance you pay on your newly built home in Sonoma or Napa County. Every home is different and it’s important to do your homework and shop your options so you feel secure in your insurance company of choice, while also avoiding unnecessary costs.