How the Location of a Home Can Affect Homeowners Insurance Rates

A man in his kitchen wonders how the location of his home impacts his homeowners insurance rates.

Does the location of your home impact what you’ll pay for homeowners insurance? Your home insurance rates are made up of a variety of factors, and one of those factors is indeed location. While at first glance this may seem strange, consider how a home’s value and risk might be assessed related to the weather types in the region, crime rates in the area, the population, or how far away the home is from first responders. These location-based factors can all impact your home insurance rates.

Three Reasons the Location of Your Home Can Impact Your Home Insurance Rates

Living in a highly populated city can have an impact on your homeowners insurance costs, but so can living somewhere natural disasters often occur. And while these are just two examples of how location plays a role in your home insurance price, rates can vary from neighborhood to neighborhood and even street to street. Insurance companies calculate risk and adjust accordingly. Here are three reasons geography affects insurance pricing.

1. Home Insurance Costs Vary by State

The city and state in which we live can play a direct role in your home insurance rates. For example, someone living by the beach can have different coverage requirements and risks vs. living in the mountains vs. living in the city. Even within the state, however, rates can vary from city to city. Rates can be determined by the likelihood of claims based on similar homes in your area or region.

2. Likelihood of Severe Weather or Natural Disaster

Whether it’s flooding, wildfires, tornadoes, earthquakes or hurricanes, the likelihood of a natural disaster taking place near your home will have a direct impact on your home insurance rates. If this is the case, finding the best homeowner insurance for you can seem intimidating and time-consuming, but at SelectQuote, we can compare coverage and rates for you in just minutes—even if you think your location will have an impact on your rates.

3. How Close Your Home is to a Fire Department

Did you know that your home’s proximity to a fire department and fire hydrant can have a direct effect on your home insurance rates? The department’s ability and timeliness in the case of a fire will be favorable to an insurance company. You can likely expect to pay higher rates if you’re far away from a fire station or live in a rural area primarily serviced by volunteer firefighters.

What other factors affect home insurance rates?

While the location of your home is crucial in determining your home insurance rates, other factors that affect homeowners insurance premiums include:

  • Your credit score. The higher your credit score, the less risky the insurance company views you. This can mean lower home insurance premiums. On the other hand, a lower credit score is viewed as riskier to insure, and therefore rates might be higher.
  • Previous home insurance claims. A history of filing a claim makes you seem risky to a homeowners insurance company because they view this as increasing the chance you’ll file another claim in the future. 
  • Your deductible amount. Higher deductible amounts typically mean lower premiums. As a reward for taking responsibility for a larger part of the claim, the insurance company offers a lower premium amount.
  • The age and quality of your home. Older homes and homes that are not well maintained are more likely to need significant upkeep, including new roofs, plumbing and electrical wiring. The insurance company views these homes as riskier to insure, therefore the premiums are usually higher.

How can I lower my homeowners insurance premium?

One of the easiest ways to save money on home insurance is by bundling. Not only can bundling save you money, but working with one carrier for all of your insurance needs can save you time. Additional opportunities for home insurance discounts can often include home improvements (improving plumbing, replacing your roof, adding additional smoke sensors, etc.), securing your home, how you pay for your policy, if you’re a non-smoker, or if your home was built within the last year.

SelectQuote Can Help You Find Affordable Home Insurance

Finding the right home insurance is easy with SelectQuote. We can compare coverage and rates from some of the most trusted insurance companies in just minutes to find you the home insurance quote that makes the most sense for your situation. Our licensed insurance agents have over 35 years of experience in the industry and are there with you every step of the way. You can ask questions, share any grievances, and we’ll make sure you find coverage that meets all of your needs—and all within your budget. At SelectQuote, we shop while you save!

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