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Wondering how much home insurance is going to cost you?
The team at HIG explains how your insurance premiums are calculated.

How Much Does Homeowners Insurance Cost?

The most important factors that influence the cost of your home insurance along the South Coast of MA & RI

Finding the right insurance professional to help you through the home buying process is critical for many reasons. However, one of the most notable may be providing you with a comprehensive homeowners insurance quote that not only protects the property you finally decide to purchase but also all the important belongings you plan to move inside. For over 100 years, the partners at Hadley Insurit Group (HIG) have been helping individuals and families in Massachusetts and Rhode Island with all of their home insurance needs. So, it’s safe to say that our team has the knowledge and expertise to assist you in figuring out how much homeowners insurance you need and how much it is going to cost you.

HIG shares three key factors that influence the cost of your home insurance

“Quick insurance quotes” and “binding coverage in 7 minutes or less” are enticing propositions offered up by many of today’s online insurance companies. But, at HIG, we believe that partnering with a local agent for all your home insurance needs is more important now than ever before.

We certainly agree that a computer-generated home insurance quote is quick and easy to get. However, this online process is typically not a very effective way to get the most accurate cost estimate or the proper coverage for your property and belongings. These rapid quotes, and the accompanying insurance recommendations, generally do not factor in extremely critical pieces of data, such as your home’s replacement value, age, construction/special features, and location, or essential personal information, like your current financial status, previous claims history, appetite for risk, and discount eligibility.

An experienced, local insurance professional, on the other hand, is more than equipped to weigh all the considerations listed above and then some. In fact, we would like to share some key insights about factors that may affect your homeowners insurance cost. Below are three major components that are likely to influence the quote you receive – Replacement Value, Deductible Amount, and Property Age.

Replacement ValueDeductible AmountProperty Age
The most critical piece of your home insurance solution, and the one that impacts your insurance cost the most, is the amount of dwelling coverage you choose. That’s because dwelling coverage is designed to safeguard the structure of your home and provide you with the money to rebuild and repair it in the event it is damaged or destroyed by a fire, lightning strike, wind, hail, or other covered peril. Dwelling coverage is also important because it determines the limits for most of the other types of coverage in your home insurance policy, such as personal property coverage.

Clearly, selecting the proper amount of dwelling coverage is essential. So, how does your insurance partner go about calculating it? A policy’s dwelling coverage is determined solely by your home’s replacement value, which is the cost to rebuild your home after a covered event. While you might think that the replacement value would be the same as the price you paid for your home, or its current market value today, determining your property’s replacement value is more complicated than that. In order to calculate your replacement value, you and your insurance agent should take into consideration the cost of construction materials, labor, and debris removal in your specific geographic area as well as any updates or renovations you’ve made since purchasing your home.

In the event your home or belongings are damaged or destroyed and you make a claim against your home insurance, the deductible is the amount you will be expected to pay before your insurance carrier starts to provide coverage. Therefore, the process of selecting a deductible amount that you’re comfortable with should not be taken lightly. If you select a higher deductible, say in the $2,500 range, you will definitely save on your monthly home insurance premium. However, if you ever have to file a claim, you will be expected to pay this amount before being able to tap into the financial benefits of your homeowners policy.

On the other hand, those homeowners with lower deductibles, in the $500 to $1,000 range, will pay a little more in premiums, but should have more financial protection in the event a common homeowner liability strikes, such as a small electrical fire, burst pipes, or theft. Your insurance professional should provide you with a range of deductible options and help you evaluate, in the wake of a loss, how much money you would feel comfortable spending out of your own pocket.

From beautiful waterfront properties to historic multi-family houses, our little slice of New England offers individuals and families a variety of home buying options. But before you decide to jump into a renovation project or invest in becoming a fully equipped smart home, it is important to know that the age and condition of your property might significantly impact your coverage needs and your home insurance premium. For example, insurance for an older home typically costs more because of the building materials used and its unique features and finishes. Plaster walls, ornate crown moldings, stained-glass windows, and wide plank hardwood floors are generally costlier to repair and replace when compared to the building materials used in newly constructed homes. However, you can often lower the homeowners premium on your older home by updating the roof, plumbing, electrical, and heating systems.

Additionally, many insurance carriers offer cost-saving discounts to homeowners who invest in smart home technologies, including leak detection sensors and Wi-Fi connected thermostat, home security and fire detection systems. Regardless of the age of your property, making improvements can have an impact on both your insurance costs and coverage needs. That’s why you’ll want to be sure to discuss any past renovations and upcoming home improvement projects with your insurance agent. They should not only make sure your replacement cost value reflects these changes, but also check to see if your insurance carrier offers any credits for the updates you’ve made or plan to make to your home.

We hope that you now have a better understanding of three primary factors that help to determine your home insurance premiums. However, we understand that there is still a lot to learn about home insurance coverage. As your insurance partner, HIG is committed to always providing straightforward answers to all your important home insurance questions and constantly monitoring the home insurance marketplace to ensure that we are getting you the most competitive rates from the quality carriers that we partner with. Contact us today to receive a complimentary quote on a new or existing home insurance policy.

Seven additional factors that might affect your home insurance premium:

  • Claims History – Homeowners with a clean claims history generally pay less in home insurance premiums than those with past claims, regardless of size or severity.
  • Credit History – Many insurance providers offer homeowners with a good credit history a lower home insurance premium.
  • Flood Risk – If you own property in a high-risk flood zone, you should expect to pay more for your home insurance and may be required to have a separate flood insurance policy.
  • Pets – The whole family loves Roscoe, but your insurance carrier may not be quite as charmed. Having a family pet often increases your coverage requirements and premiums.
  • Safety – Homes that are located in a town or city with a low crime rate, close to a fire hydrant, and near a permanently staffed fire department, are typically less to insure.
  • Special Features – Amenities like pools, hot tubs, and wood-burning stoves generally lead to higher insurance premiums because they increase the likelihood of injury or damage.
  • Working from Home – If you have a home office or business, it may require additional coverage on your homeowners policy, which will drive up the cost of your insurance.

Work with HIG to uncover home insurance discounts that may be available to you, including:

  • Bundling Auto & Home with the same insurance carrier
  • Having a Good Credit Score
  • Installing a Security System
  • Using Deadbolt Locks
  • Using Smoke Detectors

We are ready to help you find the best insurance policy.