7 Building Aspects That Impact Your Home Insurance Rates

If you are not very familiar with home insurance, it is useful to know the rebuilding value of your home and the value of its contents. The more expensive your home is to rebuild and the contents are to replace, the higher the premiums.

It is important to know that insurers do not look at the market value of the home, but at estimated rebuild costs. We compiled an overview of 7 building aspects that impact your home insurance rates. Knowing what drives the costs will allow you to address some of these issues in order to reduce the costs.

1. Wiring type

Worst alternative, highest insurance premiums: Knob and tube wiring

– Older wiring used prior to 1950

– Most dangerous wiring (no ground wire, old and worn out wires)

Best alternative, lowest insurance premiums: Cooper wiring

– Standard wiring

– Widely used today

2. Plumbing Type

Worst alternative, highest insurance rates: Galvanized or lead plumbing

– Installed before 1960s

– Steel pipes covered with zinc

– Buildup of corrosion with impact e.g. on water pressure and water quality (lead)

Best alternative, lowest insurance rates: Copper, PEX / PVC / PB or other plastics

– Used in modern homes

– Withstands high and low temperatures

– Resistant to chemicals in plumbing environment

3. Frame Type

Worst alternative, highest insurance premiums: Wood

– More likely to suffer from fire

– Often used for smaller houses

Best alternative, lowest insurance premiums: Concrete or brick

– Most stable house frames

– Always used for high-rise buildings

4. Alarm

Worst alternative, highest insurance rates: None

– Higher risk of accidents or crimes

Best alternative, lowest insurance rates: Security guard

– Live monitoring through an on-site guard

– Lowest risk through potential pre-warning and mitigation

5. Building Age and Upgrades

Worst alternative, highest insurance premiums: Old house, no renovations

– High chance of accidents

– E.g. roof not replaced in 25 years

– Potential pipe burst, leakage, fire, etc.

Best alternative, lowest insurance premiums: New house

– Lowest risk of any issues due to construction

– Use of the most modern construction standards

6. Stove Type

Worst alternative, highest insurance rates: Wood stoves

– Seen as potential source of fire

– Can lead to monoxide poisoning

– Requires a thorough inspection

Best alternative, lowest insurance rates: No Stoves / Electric stove

– No risk of fire originating from stove

7. Heating Type

Worst alternative, highest insurance premiums: Oil

– Can cause environmental hazards eg. via leakage

– Age and condition of a tank can impact premiums as well

Best alternative, lowest insurance premiums: Electric heat or forced-air gas furnace

– Widely used and considered safe

We hope this information will help you get lower home insurance rates and better understand the complex aspects of home insurance.

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