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What four main factors determine the cost of home insurance?
I’m shopping around for home insurance and, frankly, I feel a bit confused. I have no idea how it’s calculated! The numbers seem like random estimates, to me. What are the main factors that influence the price of home insurance?
Natalie Todoroff · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Fret not, insurance can get confusing—but that’s exactly why we’re here.
Many different factors determine the cost of your
home insurance
, as each insurance provider calculates it differently. Here are the four big ones: - Home location The location of your home plays an enormous role in determining the cost of your home insurance. If you live in an area where a higher number of claims are filed, your home will likely be more expensive to insure. This can include natural disaster areas, or neighborhoods with higher crime rates.
- Cost to rebuild The cost of a potential rebuild will also affect the cost of covering your home. The more expensive a home would be to rebuild, the most costly it is for your insurance to cover it.
- Credit history Your credit history and score are major players in determining your home insurance score. They’re not exactly the same thing, as your home insurance score takes many other factors into account, but a poor credit history will also make you a risky—and more expensive—candidate for home insurance.
- Bundling Whether or not youbundle your home and auto insurancecan also determine how much you end up spending. Bottom line? Bundling can help you save!
If you’re looking for a sweet deal on home insurance, download
Jerry
. Jerry is a one stop shop for all your insurance needs. It compares policies from many top insurance providers, and finds you the best quote. Jerry can also show you how to save even more when you bundle your home and auto policies. View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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