Insurance Insights

4 Factors You Never Knew Affect Your Home Insurance

Learn how factors like replacement costs, construction types, and garage styles impact your rates. Explore the significance of location, including proximity to fire hydrants and stations.
June 15, 2024

Have you ever wondered why you pay what you do for home insurance? Your premium doesn’t only depend on your proximity to water and the size of your home.

In fact, insurance companies in Florida weigh a number of factors and details about your home in order to determine a rate. Hundreds of data points are used in assessing risk.  

But here are just a few of them:

Replacement cost

The replacement cost for your home is the amount of money you will need to rebuild your home from the ground up, should a disaster occur. This is not the same as the real estate value of your home. Replacement cost offers more protection because the cost of building a home often exceeds its market value.  

How can I find the replacement cost for my property?

The easiest way to find out your home’s replacement cost is by asking your insurance agent. Most agents have access to tools that can provide a very good estimate.  

If you would rather do it yourself, you could get another estimate by contacting local homebuilders to ask for the cost-per-square-foot in your area and then multiply it by your home’s square footage.

Be sure to take into consideration any external structures, such as a swimming pool or an outdoor shed.

How does the replacement cost affect my insurance premium?

When you purchase an insurance policy, you are asked to choose a dwelling coverage amount. This amount should be enough to cover the replacement cost of your home. Insurance companies use this coverage amount to calculate a premium.  

The higher the replacement cost, the higher your premium can be.  

How do carriers obtain the replacement cost of my house?

Insurance companies connect to data services to obtain the replacement cost of your home.  

Construction type

Where can I find my home's type of construction and exterior siding?

To determine your home's construction type, start by figuring out the building elements or the materials that were used in its construction. You can also look up this information on your local housing appraisal website. This typically holds all of the important details about a home's construction and siding types.

Why does my home’s construction impact my insurance premium?

The age of your home and how it was constructed plays a big role in how much you pay for home insurance. Sturdy homes built from long-lasting materials are more likely to obtain coverage for a lower premium than those that are built from weaker materials.  

Because Florida is susceptible to hurricane landfalls, strong and sturdy homes are of utmost importance for both homeowners and insurers.  

How does the exterior siding of my house affect my premium?

Your type of siding is important, and insurance companies calculate different premiums depending on this type.  

For instance, it’s more expensive to cover a wood frame home than a brick one, as wood is more susceptible to fire and wind damage. Masonry homes, on the other hand, are generally more durable.  

The common materials of masonry construction are brick, building stone such as marble, granite travertine, and limestone, cast stone, concrete block, glass block and adobe.  One of the easiest ways to check this is by looking up your home on your county’s property appraiser website.  


What are the different types of garages?

Florida homes typically have one of four types of garages: built-in, attached, detached, or carport. A built-in garage is as name states, built into the home. This is different from an attached garage, which has its own roof but shares a wall with the home. It appears as if it is tacked on to the exterior of the house.  

Meanwhile, a detached garage is typically placed a few feet away from the home. It is a separate structure. Lastly, a carport is a shelter for a car, consisting of a roof supported by posts. This is usually built on the side of a home.  

How does my garage impact my home insurance?

Your type of garage is important for insurers to how to cover it. For example, if you have a detached garage, it may fall under the external structures section of your policy and would therefore require more insurance. The standard homeowners policy commits up to 10 percent of the face value of the policy to cover detached buildings. If your policy limit is, say, $220,000 for your house, the most you can get if your detached garage burns down is $22,000.

Location and Fire Hydrant Proximity

How does my home’s location affect my premium?

Your address plays a big part in calculating a home insurance premium. For example, your proximity to a body of water is taken into consideration, as it increases your flood risk. Insurers also look at how close your home is to a fire station and a fire hydrant. This is because having a fire station close by could help protect your home during a fire.

How does my nearest fire hydrant affect my insurance premium?

One of the ways home insurance companies calculate a premium is by looking at a homeowner's proximity to the nearest fire hydrant. This is important in case your home ever suffers a fire and emergency help is required to minimize the damage.  

Insurance companies favor homes that are located within 1,000 ft of a fire hydrant. They also prefer homes that are located within five miles of a fire station. These homes can expect to pay a lower premium than those located further away from a fire hydrant.  

How can find where my nearest fire hydrant is?

The best way to find your nearest fire hydrant would be by exploring your own neighborhood. Go outside and keep your eyes peeled. You can also ask your neighbors for some information. Some Florida counties also provide online tools that let you search for a fire hydrant by typing in your address.

I live close to a fire department. Is that the same thing?

If you’re not sure whether you live within 1,000 ft of a fire hydrant but are sure you live within five miles of a fire station, you may still be able to enjoy a properly priced premium.

Homes that are located near professionally-staffed fire departments usually pay less for insurance. That’s why urban and suburban homes usually get better ratings for fire protection than rural areas. Having a fire department nearby will help to keep your home safe in case of fire. This, however, is different from being located close to a volunteer fire department.

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