Central's Blog

How much does home insurance cost?

The amount you will pay to insure your home will vary depending on several different factors:

  1. Reconstruction cost. If your home were completely destroyed by a fire, storm, or other loss, how much would it cost to rebuild it using the same type of materials? This is called the Reconstruction Cost and it’s an important factor in determining the amount of coverage you need. Note: Reconstruction Cost shouldn’t be confused with Market Value. See our blog post for more information on the difference.
  2. Remodeling. You may not realize it but renovations or improvements you have made to your property can increase the value significantly, which in turn increases the premium.
  3. Age of home.
  4. Type of construction. Brick or masonry homes are considered sturdier, as opposed to wood frame homes, and do not burn as quickly as a wood frame home.
  5. Where you live. How close do you live to a fire department? Do you live in a high crime area? Is your area prone to severe weather or flooding? The answers to these questions determine how much insurance generally costs in your area.
  6. Your risk factors. Swimming pools, dogs, and trampolines are just a few of the items you may own that insurance companies consider liabilities, which will raise your rates.
  7. Your history. If you have a long history of filing claims, your insurance company will charge more to insure you. Why? In their eyes, you are a proven risk and it’s likely you’ll file a claim while you are insured with them. A good rule of thumb is to avoid filing smaller claims if you can afford to pay for them yourself. This will help you keep a clean claims record.
  8. Insurance score. Studies show that your insurance score is a good predictor of your likelihood of having future insurance losses. Learn more about how your insurance score affects your premium here.

With so many factors affecting the cost of insurance, it may seem like you have no control over what you pay. However, there are several things you can do to help control and even reduce your insurance premium.

  • Increase your deductible. Some companies provide significant cost savings on your premium if you are willing to take a higher deductible.
  • Package your home and auto policies. It is usually much easier and economical to place all your policies with one carrier. Most carriers offer significant discounts for bundling coverages.
  • Install protective devices in your home such as burglar alarms, fire alarms, sprinklers, and whole house generators.
  • Go green. Some companies will offer a premium credit if you enroll in their online or e-options.

Don't have a Central agent? Link to our convenient Agency Locator to find an agent in your area.

The policy coverages described above are in the most general terms and are subject to the actual policy exclusions and conditions. For specific coverage details and policy exclusions, refer to the policy itself or contact a Central Agent.