When it comes to insuring a house, it is extremely common for home insurance companies to charge higher rates for insuring homes that are older. While it may seem that older homes should not cost as much due to their values being lower, there are several key reasons that the insurance for an older home will often cost more money than the insurance premiums for a newer house. Here are three things to know about this:
Older homes are riskier
Insurance costs are highly based on risk levels. Therefore, when one house is riskier to insure than another, it will cost more to insure. Older homes, in general, are considered high-risk to insurance companies, and this is the top reason it will cost more to insure an older house.
When it comes to age, there are different types of older homes, and each may have different rates. For example, insuring a house that is between 25 to 50 years old will often be in one category, while a house that is 100 years old or older, will be in another. The house that is 100 years old is likely to cost more to insure than a house that falls in the other category, but both homes will cost more to insure, on average, than a house is only a couple years old.
There are three main types of risks with older homes
The three main types of risks found with older homes are the roof, the plumbing system, and the electrical system. These are the main types of problems older homes can have that will often lead to claims on a homeowner's insurance policy.
The replacement cost of historic homes, which are homes that are really old, is extremely high due to the intricate nature of the way homes like this were built. This is also a contributing factor to the increased costs of insuring older houses.
There are ways to save money on insurance if you have an older home
One of the best ways to save money when insuring an older home is to keep up with all the maintenance, updates, and repairs the house needs. If you can keep the house in great shape and modernize it, it will cost less to insure.
If you are interested in learning more about insurance quotes and the factors that affect the premiums for policies, contact a homeowner's insurance service agent of your choice.
Share19 April 2019
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