Factors that impact home insurance rates
home-insurance tips-and-advice

Factors that impact home insurance rates

Factors that impact home insurance rates – Part One

There are several factors that impact home insurance rates, and insurance companies may use these factors to determine your risk level as a homeowner. If an insurer determines you live in an area where the chance of a claim is higher, then it will likely increase your home insurance rates. The following factors may impact your premium to some extent.


Your province and even your postal code may be included among other factors that impact home insurance rates. If your house is located in an area with a history of perils, such as vandalism, theft or weather-related events, you may see a higher premium. However, location could have a positive impact, too. If you are located near a staffed fire station, for example, your home insurance premium could be slightly lower. Location may also be used to determine the replacement cost of your home since construction costs, including labor and materials, may vary depending on region.

Dwelling coverageDwelling coverage is the portion of your homeowners insurance policy designed to cover your home’s structure. Insurance companies have valuation tools that help calculate dwelling costs. The insurance agent – or online quoting tool – will ask you questions about your home to determine how much it might cost to rebuild your house. Be prepared to answer questions about the age of the home and appliance systems (HVAC, plumbing, etc.), the roof age and materials, the type of building materials used, the square footage and even the unique features of your home, such as dormers or architectural characteristics.


Credit historyIn provinces where it is allowed, insurers can use a homeowner’s credit-based insurance score as a rating factor assessing the level of risk they are taking on. A higher credit-based insurance score could lead to being perceived as lower risk, and rates are often reduced accordingly. Statistically, homeowners with poor credit are more likely to file claims under their policy than homeowners who have good or excellent credit.

Claims history

Insurance companies often take previous claims filed within a certain time frame into consideration when calculating your rate. When a homeowner files a claim, their homeowners insurance company generally assumes they are more likely to file future claims. Having a history of filing insurance claims, even small ones, might indicate an even greater future claims risk for the insurance company.
Insurers may assess your personal claims history at current and prior properties. What that means is that even if you’re insuring a new home, your prior claims history from other homes will be visible to insurance companies for five to seven years.
Stay tuned for Part Two of Factors that Impact Home Insurance Rates! As always, we encourage you to talk with your insurance broker so you can be completely informed and make the best decisions. We insure homes AND seasonal and rental properties! If you are looking for a competitive quote, or you just need advice on property insurance, give us a call at 1-877-454-4476 or visit our quote page.