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Factors That Can Affect the Cost of Home Insurance

Below is an article distributed by Prospect Mortgage here in Boise. I thought this provided some good general information for a standard homeowner's insurance policy. For rentals, however, I highly recommend that you speak to your insurance agent about special Landlord riders that cover things such as lost rent. Typically the agents know to offer if not automatically add such additional coverage for Landlords for multi-family units, but maybe not so for a single family rental. If you have a single family rental unit, you might just want to check with your insurance carrier that they are aware that the property is not owner-occupied and in fact is a rental.

Tony Drost
Tony Drost, President
First Rate Property Management, Inc.
Boise, Idaho
Contact me for more information about the Investment Real Estate and Property Rental markets in Boise and Idaho.



Factors That Can Affect the Cost of Home Insurance
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Many factors can affect the cost of home insurance. Here are some of the most important.

Home Location
The average cost of a homeowner's insurance policy is approximately $900 a year. If the home is located in a high-risk area susceptible to wildfires, tornadoes or hurricanes, the cost of insurance could triple or quadruple. The crime rate in the neighborhood will also affect costs. Security systems can offer on average a 5% to 15% discount off an insurance policy.

Home Age
A new home can provide a discount up to 30%. If a home is over 25 years old, insurance rates will be higher. Older structures are more susceptible to electrical, plumbing, roofing and foundation problems that can be costly to repair. Plumbing is an acute problem because water can lead to mold and mold is expensive to remediate.

Home Materials
Fire-resistant materials, such as brick or concrete, can lower home insurance costs by as much as 20%. Alternatively, more flammable materials, such as wood shingles or wood siding, can increase the cost of home insurance.

Backyard Pool
Pools present additional liability for insurance companies and many require a solid fence with a locking gate surrounding the pool. Pools -- and items like trampolines -- can increase insurance costs by 10% or more.

Canine Companions
The average cost paid out for dog bite claims in 2012 was $29,752, according to the Insurance Information Institute. For this reason, dog owners -- particularly those with larger dogs -- will pay higher insurance rates.

Fire Station and Fire Hydrant Distance
Proximity to a fire hydrant and station can alter the cost of insurance, as well as whether the fire department is a professional or volunteer fire service.

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Douglas Nicolls
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Prospect Mortgage
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Boise, ID 83709
Office: (208) 377-7306
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Tony Drost
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