Factors That Increase Oklahoma Home Insurance Costs

Homeownership is a dream for many, but it comes with a laundry list of responsibilities, not the least of which is obtaining homeowners insurance. Most never consider what lies beneath the surface of their insurance premiums until they receive their annual bill. In a world where safety and preparedness are paramount, understanding the variables that impact insurance costs is no luxury—it's a necessity.

From the shoreline of Florida to the earthquake-prone West Coast, the geography of your home plays a pivotal role in the insurance equation. Age, materials, size of your home, and your financial history weave together to stitch the tapestry of your premiums. With each component carrying its own weight, the complexities begin to unfold.

This article aims to unravel the threads that comprise the fabric of homeowners insurance costs. We'll explore the essence of homeowners insurance, the factors influencing rates, the different types of coverages available, strategies for cost savings, tips on selecting the right provider, and the importance of deciphering policy terms and conditions. Get ready to demystify the intricacies of insuring your abode.

​Understanding Homeowners Insurance

Homeowners insurance is a form of property insurance that provides coverage for a private residence. A standard homeowners insurance policy includes four key types of coverage: liability coverage, personal property coverage, additional living expenses, and dwelling coverage. It essentially functions as a safety net, financially protecting homeowners against loss due to theft, certain natural disasters, and other unforeseen circumstances affecting the home and possessions within it. Policies are underwritten by an insurance company, and the premium—the amount you pay for this coverage—is determined by various factors including location (ZIP code), the size of your home (square footage), the construction costs and building materials utilized, the presence of security systems, and your claims history.

Factors That Affect Homeowners Insurance Rates

Determining the cost of homeowners insurance is a complex process. Insurance providers consider a range of elements to calculate insurance premiums, which means that two seemingly similar homes could have markedly different insurance rates. When evaluating the average cost of homeowners insurance, several key factors play a role: geographical location (ZIP code), the construction materials used and the age of the home, the property's square footage, the area's risk of natural disasters or severe weather events, the homeowner's credit history and insurance score, and any previous insurance claims made on the property. These components are weighed by an insurance company to gauge the risk they're taking on, and set insurance premiums accordingly.

Location and ZIP code

Your home's location plays a significant role in determining your homeowners insurance premium. The ZIP code where your residence is located can signal the likelihood of claims associated with the area's crime rates, potential for natural disasters such as floods or earthquakes, and proximity to fire stations and hydrants. Furthermore, neighborhood characteristics can affect construction costs and local building regulations, influencing the insurance cost. Insurers examine all these aspects to anticipate the likelihood and severity of potential insurance claims, reflecting the risks inherent to your location in your homeowners insurance rates.

Construction Materials and Age of the Home

Building materials and the age of your home are critical determinants in the cost of homeowners insurance. Houses constructed with fire-resistant materials, like brick or stone, typically incur lower insurance premiums compared to those built with more flammable materials, such as wood. The age of the home also influences insurance costs—older homes might be more prone to issues like plumbing and electrical malfunctions, which could raise the risk of damage and subsequent insurance claims. Additionally, older homes may not meet modern building codes, potentially necessitating additional coverage to handle the higher risk and construction costs associated with these properties.

Square Footage of the Property

The size of your home—and by extension, the square footage of your property—is another essential factor in the insurance equation. A larger home generally means higher rebuilding costs in the event of serious damage or loss, leading to higher homeowners insurance premiums. Bigger homes can also often involve more contents or personal property that require coverage, adding to the cost of ensuring adequate insurance coverage.

Risk of Natural Disasters and Severe Weather Events

The propensity of your location to natural disasters like hurricanes, tornadoes, floods, earthquakes, or wildfires can significantly impact your homeowners insurance rates. Insurance providers typically evaluate historical weather patterns and natural disaster claims in a region to determine this risk. Homeowners in high-risk areas may need to purchase additional coverage, such as flood or earthquake insurance, or may see higher rates due to the increased likelihood of insurance claims from catastrophic events.

Credit History and Credit Score

Many people may not realize that their credit history and insurance score are also used by most insurance providers when calculating homeowners insurance rates. A higher credit score often correlates with more favorable homeowners insurance premiums, as it can indicate financial stability and responsible behavior. Conversely, a lower credit score could lead to increased insurance costs, as it suggests a higher risk to the insurance company of potential missed payments or an increased likelihood of filing insurance claims.

Previous Claims History

Lastly, your claims history, which includes past insurance claims on your property, affects your current homeowners insurance premium. A history with multiple insurance claims can serve as a warning to the insurance company that future claims are more likely, potentially driving up the cost of your homeowners insurance. Homeowners with a claims-free history, by contrast, are often eligible for discounts and may enjoy lower homeowners insurance premiums as a result. This history reflects part of your insurance score, which alongside other factors, helps insurers predict insurance claim likelihood and costs.

Tips to Save on Homeowners Insurance

Saving money on homeowners insurance doesn't mean you have to sacrifice coverage. By being strategic and informed, you can find ways to lower your premiums while maintaining the protection you need. Here are some tips to help you save on your homeowners insurance costs:

Shop Around for the Best Rates

Don't settle for the first insurance quote you receive. Shopping around and comparing offers from multiple insurance providers can lead to significant savings. Prices for the same coverage can vary widely between companies due to differing underwriting standards and pricing models. Take advantage of online comparison tools or work with an independent insurance agent who can gather quotes from a variety of insurance companies for you.

Increase Your Deductible

Raising your deductible—the amount you pay out of pocket before your insurance kicks in on a claim—can substantially lower your insurance premium. Just be sure to choose a deductible amount that you're comfortable with and financially prepared to cover in case of a loss. Remember, a higher deductible means more potential out-of-pocket costs, but it can be a worthwhile trade-off for lower insurance costs. Do this with caution, though. That high deductible can hurt come claim time. Seek advice from your trusted insurance professional. 

Bundle With Other Policies

Many insurance companies offer discounts if you bundle your homeowners insurance with other policies, such as auto insurance. This can simplify your finances by having a single insurer for multiple policies and can also result in lower premiums for each policy type. Ask your current insurance agent about bundling options or look for insurance companies that provide multi-policy discounts.

Install Safety Features

Insurance companies often provide discounts for homes equipped with safety features and systems that reduce the risk of theft, fire, or natural disasters. Installing security systems, smoke detectors, deadbolts, storm shutters, and fire-resistant materials can prevent costly damage and demonstrate to insurers that your home is a lower risk. Be sure to inform your insurance agent about any safety features you install to ensure you receive the applicable discounts.

Maintain a good credit score

Your credit score may affect your insurance cost, as many insurers use credit-based insurance scores to help predict the risk of insurance claims. A higher credit score can indicate to an insurance company that you're a lower risk, potentially leading to lower homeowners insurance rates. To maintain a good credit score, pay bills on time, reduce your debt levels, and check your credit report regularly for accuracy.
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By following these tips, you can better manage the cost of homeowners insurance and enjoy valuable savings over time. Remember that your insurance needs may change over the years, so it's important to review your coverage periodically with your insurance agent to ensure you have the right protection at the best possible rate.

Choosing the Right Insurance Provider

When selecting a homeowners insurance provider, it's crucial not only to look for low premiums but also to ensure that you are choosing a reliable company that will support you when you need to file a claim. Insurance is more than just a product; it's a commitment from the company to protect your home and finances in the case of unforeseen events. Here's how to approach choosing the right insurance provider for your needs:

Research and Compare Multiple Insurance Companies

Begin by collecting quotes and information from a variety of insurance providers. Compare the costs, but also weigh the differences in coverage options and exclusions. Each insurance company has unique underwriting standards that could impact the insurance cost and the level of protection you receive. For instance, some insurers might offer lower rates for homes with security systems or storm shutters or may specialize in coverage for areas prone to natural disasters.

Read Reviews and Customer Feedback

The experiences of current and past policyholders can offer valuable insight into how the insurance company operates. Look for reviews and feedback online, paying close attention to comments about customer service, claim handling, and overall satisfaction. Keep in mind that people are more likely to leave a review after a negative experience, so weigh feedback accordingly. For a balanced view, consider reviews from various independent sources.

Consult With a Licensed Insurance Agent or Producer

Licensed insurance agents have the expertise to guide you through the selection process. They can help you decipher the complexities of insurance policies, making it easier to make an informed decision. An independent agent (like those here at Oklahoma Insurance Pros) can also provide personalized advice based on your specific needs and help you understand how different factors, such as the age of your home, its square footage, or the ZIP code it’s in, can affect your homeowners insurance rates.

Remember, it's not just about finding the cheapest premium—it's about ensuring that when you pay your insurance premium, you're genuinely buying the peace of mind and financial protection your home requires. An informed decision will help you find a balance between affordable premiums and the assurance that your insurance coverage will be there for you when you most need it.

get proper home insurance!

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Scott Godwin
Founder

Oklahoma Insurance Professionals LLC serves Oklahoma City and the surrounding Oklahoma communities by protecting the people we work with just like we protect our own family members. Home insurance, auto insurance, business insurance, and more. We can help you find the coverage you need. ​